The Food and Drug Administration ("FDA") is exercising new caution in approving drugs in the wake of the Merck Vioxx scandal, according to an Associated Press Report published on MSNBC.com.

The Associated Press Report stated as follows: 

The agency has approved 61 percent of drug applications through mid-August, down from 73 percent in the same period last year, according to BioMedTracker, a biotech and pharmaceutical research service. . . .

James Kumpel at Friedman, Billings, Ramsey & Co. just published a report showing FDA approvals of "new molecular entities" — drugs made from new chemical compounds rather then just twists on existing drugs — so far this year are at their lowest level in at least a decade. Only seven were approved through the end of July, versus an average of 12 over the first seven months of each year since 1998.

What are some of the specific examples cited by the article of the FDA’s caution?

• Rejection of Merck’s Arcoxia, a successor to Vioxx;
• Asking for more time to review its approved migraine drug Frova for a new use, preventing menstrual migraines;
• Rejecting or delaying for approval Novartis’ diabetes drug Galvus, Sanofi-Aventis’ weight-loss drug Zimulti, and a higher dose of GlaxoSmithKline’s Advair Diskus for bronchitis and emphysema symptoms; and
• Rejecting Wyeth’s experimental schizophrenia drug bifeprunox and Wyeth’s Pristiq, which would have been the first nonhormonal drug for menopause symptoms.

It was almost inevitable that the FDA would tighten up its practices and exercise more caution in approving drugs following all the bad publicity over the Vioxx scandal.  In some ways, this was perhaps warranted.  However, the question now is: are they taking caution too far?  Are they delaying good medicines from going to market that could be saving lives, in the exercise of extreme caution?  Only time will tell, and I am sure many in the biotech industry will be closely watching.

The San Francisco Chronicle ran an interesting article last week on the steps that the biotech industry is taking to protect itself against the threat of generic copies, as patents run out and the threat of biogenerics legislation looms ahead.

The Chronicle reported on the issue as follows:

Whether many biotech companies will be able to beat the generic threat through innovation is an open question. But many will try. . . .

Traditional pharmaceutical companies, whose pills and tablets have been vulnerable to generic competition since 1984, have struggled to roll out significantly improved medicines before patents expired. Revenues for drugs such as the antidepressant Zoloft and the sleeping pill Ambien are plunging as generic sales rise.

“It remains to be seen if the same thing will happen in biotech,” Citigroup analyst Yaron Werber said. Some of the signs for biotech are favorable. “The industry continues to be a leader in innovation,” he said. That capacity for innovation is a significant added business risk for generic manufacturers who venture into the biotech realm, Werber said.

So what is the industry doing to prepare?

According to the Chronicle, Genentech is putting brand-names of its drugs on the market to compete with the drugs that are about to lose protection, and is also putting next-generation versions of its own drugs on the market.

In contrast, the Chronicle reported that other companies are racing to develop improved generic versions of the brand name drug.  The Chronicle stated as follows:

Two Bay Area companies, Affymax Inc. of Palo Alto and FibroGen Inc. of South San Francisco, are among the manufacturers working on next-generation drugs they hope will capture market share from Epogen and similar branded drugs. Affymax’s experimental compound Hematide requires less-frequent dosing. Theoretically, it could help patients avoid a very rare side effect associated with Epogen-like drugs.

All in all, the Chronicle put a positive spin on the issue, emphasizing that the industry was not concerned, arguing that the threat of biogenerics and the impending loss of patent protection just encouraged the industry to move forward with the development of more innovations.

Is this media spin or an accurate reflection of the mood of the industry?  My guess is that it is a little of both.  Smart industry players have to think ahead on how they will survive if biogenerics legislation becomes a reality, but one cannot help but question whether they are really as unconcerned as the Chronicle suggests.

Rebecca Zacks in XConomy provided an excellent overview of a blogosphere controversy that erupted last week over biogenerics legislation, in response to an article run by the Wall Street Journal on Genzyme’s recent difficulties in manufacturing the drug Myozyme at a second plant.

Zacks provided some background to the issue:

Myozyme, approved by the FDA last year for the treatment of an inherited muscle disorder called Pompe disease, could be a big source of revenue for Genzyme—the drug can cost more than $300,000 per year for an adult patient, according to the Journal article. But Genzyme has been unable to scale up production of the drug because the FDA has so far declined to approve a Boston plant meant to be its main source. While the company waits for that approval, it is providing some U.S. patients with free doses from a different plant in Framingham, MA—the one that produced the drug for the clinical trials—on an experimental basis. (The Framingham product is already approved for sale in other countries, but not the U.S.)

What’s stalling approval of the new factory, according the article, is a chemical difference between the Myozyme produced in Framingham and that produced in Boston.

Zack cited Wall Street Journal’s David Armstrong, who followed up on the Journal’s article with the following explanation:

Genzyme is having trouble persuading the FDA to sign off on Myozyme made in big batches. The agency wants to be sure the drug produced in large tanks is the same as the stuff Genzyme made successfully on a smaller scale.

Making biologics is complicated work, and that’s one reason the biotech industry has voiced caution about legislation to allow generic versions of the medicines.

In the case of Myozyme, billions of cells from hamster ovaries growing in large stainless steel tanks produce the enzyme Pompe patients lack. The fact that Genzyme, which has loads of biotech experience, is having such difficulty ramping up production of its own drug heightens worries about the ability of generic manufacturers to accurately copy brand-name biotech drugs.

Even small differences in these drugs could affect patients. Myozyme made in the big tanks contains less of a key carbohydrate that is believed to help certain muscle cells absorb the drug. Less absorption could reduce the drug’s effectiveness.

However, Zacks acknowledged that not all the bloggers give any real credence to the biotech’s industry’s position or to the argument that Myozeme should be a case study for why biogenerics legislation is a bad idea, citing Venture Beat’s David Hamilton, who had his own take on the controversy, arguing that the Wall Street Journal “missed a much more important point about biogenerics: [t]he double standard that the biotech industry holds” on determining the equivalence of different batches of drugs.  Hamilton wrote as follows:

The first issue here is that there’s nothing new about biotechs finding that new production batches of a complicated protein differ in certain ways from older batches. . . . Sometimes these differences are serious; more often, they’re not. . . .

The second issue — and those of you who’ve followed these debates can probably see where I’m going — is that the biotech industry wants to have it both ways when it comes to the “complicated work” of making biologics. Where biogenerics are concerned, the industry insists that copycat versions of biotech drugs must undergo those expensive and lengthy clinical trials in the interests of “patient safety.” When it comes to their own drugs, however, biotech companies are perfectly willing to rely on a battery of simpler tests to ensure that a new production batch is equivalent to an old one, and only run clinical trials as a last resort (and when forced to by the FDA).

All of which suggests that it would probably suffice to subject any would-be copycat drug to the same set of tests that biotech manufacturers themselves must meet for a new production facility. If it passes, it’s approved. If not, then it’s time to consider clinical trials. In fact, this is pretty much the “case-by-case” strategy adopted by the House and Senate biogenerics bills — ones that I’m pretty sure the Biotechnology Industry Organization opposed. In any event, it doesn’t seem too much to ask that journalists covering these debates realize that the case against biogenerics is a lot weaker than the industry would like us to think.

All in all, Zacks effectively captured a very interesting blogosphere debate on yet another aspect of the biogenerics controversy.  As you know if you follow this blog, I have indicated repeatedly in prior blogposts my view that biogenerics legislation is going to have a negative impact on the biotech industry.  I think I would agree with Venture Beat that this is the principal problem with biogenerics legislation, and that the argument that biogenerics legislation will somehow lead to dangerous copies of drugs being on the market is a fairly weak attempt at scaring the public and/or legislators into voting against such legislation.  There is already a mechanism in place to regulate drugs on the market–the FDA regulatory powers.  The much larger issue is what biogenerics legislation will do to discourage biotech innovations that should be a concern to all of us out there.  We all want to be able to afford to buy the drugs we need, but at the same time, we also want access to medications that will make us well when we come down with a horrible illness.  We should not lose sight that without a profit incentive to developing those medications, they won’t be available when we need them.

In his blog Secondhand Smoke, J. Wesley Smith makes an interesting argument that California’s stem cell priorities have been misplaced.  Wesley points to an article in today’s San Francisco Chronicle as evidence for his argument.  The Chronicle article is a human  interest story on State Senator Carole Migden’s push for a state system to collect and store umbilical cord blood.

J. Wesley Smith writes as follows:

This story illustrates how politics has twisted the proper pursuit of regenerative medicine in California. During the last six years or so, the legislature went GA-GA over ESCR and human cloning. It passed a state law explicitly permitting human cloning research. And then, under a $35 million propaganda barrage, state voters agreed to an initiative (Proposition 71) that created a constitutional amendment to permit human cloning research and to fund SCNT and ESCR to the tune of $3 billion over ten years using borrowed money–meaning the actual cost will be about $7 billion. And all to pursue utterly unproven and ethically contentious approaches to regenerative medicine–and to supposedly “defy Bush,” even though Bush has done nothing to prevent state jurisdictions from funding whatever they want.

And yet, the legislature is only now getting around to creating an umbilical cord blood banking policy

Smith certainly makes a strong argument that California’s priorities have been misplaced.  The question for those of us in California: is he right?

Certainly, there is evidence that State taxpayers’ decision to fund stem cell research was a purely political one.  It is no secret that President Bush will not go down in the record books as the most adored President in this state.  One can absolutely make the argument that the decision to fund stem cell research was in part a reaction to the President’s repeated opposition for stem cell legislation, particularly since stem cell research is such a popular issue in this state.

Of course, a counter-argument could also be made that this State’s economy will be supported by the investment into stem cell research, since the investment will go largely toward hiring people to conduct the studies.  Many jobs will likely be created by the investment, which will trickle down to the economy at large.

However, one cannot help but wonder if the money couldn’t have been better spent elsewhere, even if you are a supporter of the biotech industry and of the concept of the research generally.  Our schools, health care, keeping drugs off the street, illegal immigration, crime, overcrowded prisons, and terrorism are just some of the many issues facing this state that could have also been better funded with the same money.  Did we as taxpayers make a good decision when we voted to use the funds instead on stem cell research?

It’s a thought-provoking question that all Californians should  consider.

The U.S. Appeals Court in D.C. has ruled in an 8-2 decision that the terminally ill have no right to take unapproved drugs, even when their doctor says it is their best hope for survival.

The Mercury News reported on the decision as follows:

[T]he court said federal drug regulators are entrusted by law with deciding when new drugs are safe for wide use.

The families of terminally ill patients, several of whom died after they were denied promising drugs that were still in tests, filed the lawsuit. They said that dying patients were far more willing to take risks and argued that they should not be forced to wait for new treatments to win final approval from the Food and Drug Administration.

The judges said the families should take their pleas to Congress, not the courts.

However, the two dissenters said the ruling ignored the Constitution’s protection for individuals and their “right to life” and instead bowed to “a dangerous brand of paternalism” that put the government’s interests first.

According the The Mercury News, the next step is going to be to take this case to the Supreme Court.  It goes without saying that this is not likely to be the last we are hearing on this issue.

I have not seen a copy of the decision yet, so I’m interested to see how the majority reached the decision that they did.  My best guess without reading the decision is that the Court felt that this is a policy issue that should be decided by Congress, which seems to be what was reported above.

Clearly, from a pure policy perspective, the denial of access to potentially life-saving drugs to the terminally ill does not seem to be sound policy.   While the guinea pig argument (i.e. we want to protect the dying from being guinea pigs to be experimented on in their last days) may sound compelling to some, the reality is that most doctors are not going to do that to their patients.  They are only going to recommend possible treatments that hold some hope of working.  And why shouldn’t a patient who chooses to take a chance on an unapproved drug have that opportunity?  What is likelihood that any patient will really face a fate worse than what they are already going to face?

DrugWonks voiced a similar opinion today on the outcome of this case:

I believe the Abigail Alliance and others can make the case that they are not asking for wide use but targeted, tailored and scientifically responsible use that is consistent with their constitutional rights under the Fifth Amendment. This notion that somehow such rights are trumped by Padzur’s effort [to] take a wrecking ball to accelerated approval is a joke. The FDA is inconsistent on who gets what and when with respect to access to medicines and I don’t think the Supreme Court is going to let this “wide use” nonsense pass particularly since the Alliance is not asking for patients to determine when a product is safe but only to have the FDA create a regulatory pathway for allowing dying patients access.

It will be interesting to see what the Supreme Court says on this case, if it is indeed heard by the Court.  As those of us who have studied Constitution Law know, the concept of “rights” has been liberally interpreted on occasion, according to Constitutional scholars, to reach a particular result that seems “just” from a policy perspective.  Could the current Court do the same?

I somehow doubt it.  We have a “conservative” Court in place right now, so I doubt this Court will be reading new rights into the Constitution.  Granted, I am not a Constitutional Scholar, but that is my take on the current Court.

So, it’s quite possible that this will ultimately be placed in the lap of Congress, which will hopefully do the right thing and change the current policy.  There should be some way to legally access unapproved drugs in this country that might save your life when you are dying.  If someone wants to continue to fight to live until the bitter end and not throw in the towel, even if that person is grasping at straws, why should the FDA have the right to deny him or her that chance?  Who is the FDA really protecting in such a case?

The Silicon Valley Chapter of Licensing Executives Society ("LES") recently sponsored an event in whch representatives from Stanford and the University of California ("UC") offered tips on licensing with the Stanford and UC systems.  Katharine Ku of Stanford University and Viviana Wolinsky of Lawrence Berkeley National Laboratory each gave an excellent presentation, outlining their respective university’s policies and procedures, as well as some of the issues of concern currently facing each organization.  Nader Mousavi of Wilmer Hale, which hosted the event, also participated.

What were some of the insights on their employers’ respective licensing programs that the two speakers shared?

Regarding the issue of exclusive licensing terms, Ku indicated that Stanford prefers fixed terms of exclusivity.  In contrast, Wolinsky indicated that UC is generally more willing than Stanford to agree to exclusive licenses that run for the full term of the patent.

On the issue of royalty rates, the speakers agreed that the range often runs from 3 to 6 % of net sales.  Wolinsky shared that the UC system is willing to consider royalty stacking, if this is brought up in the negotiations, and that UC may be willing to reduce the royalty rate on each license to half of what would otherwise be agreed to. 

On the issue of sublicensing, the speakers agreed that a royalty based on net sales from sublicensees is the current standard for UC and Stanford license agreements, replacing the once-common standard of a royalty based on sublicense income (which, in all honesty, I have never seen used in the licensing negotations I have been involved with).  The panel advised that in cases where sublicense income is used as the standard for the sublicensing royalty rate that the following should be excluded: research and development payments, equity, patent reimbursements, other research and development materials and equipment, and the fair market value of cross-licenses. 

The speakers highlighted an important distinction in how UC and Stanford prefer to handle patent prosecution in exclusive licenses.  The UC position is that the university controls all patent prosecution, whereas the preferred Stanford position is that the licensee controls all patent prosecution.  In both cases, the universities require that the exclusive licensee pays for the costs; however, UC prefers that the licensee reimburse UC for the patent prosecution costs, whereas Stanford prefers that the licensee pay the costs directly.

How do the universities deal with patent enforcement?

Ku indicated that Stanford’s default position is that Stanford has the right to enforce the patents, and that the licensee can step in if Stanford declines to enforce the patents.  Ku further stated that if the licensee enforces the patents, any damages recovered should cover costs first and then the balance should be treated as net sales/sublicense income. 

In contrast, Wolinsky stated that UC’s default position is the same as Stanford’s position, except that any damages recovered should go to the party bringing suit. 

Both Stanford and UC require university consent prior to any settlement, and provide the right to name the university as a party for standing.

How are Stanford and UC dealing with the recent MedImmune v. Genentech decision?

UC is taking the most unforgiving position on this issue.  According to Wolinsky, the position is that UC is drafting language into the license to state that if a licensee disputes the validity of a patent, the patent terminates.

In contrast, the Stanford position is a little more tolerant: Stanford is drafting language into the license to state that if a licensee disputes the validity of a patent, the licensee has to pay all costs.

Regarding other issues in the news, both Ku and Wolinsky indicated that the universities were very concerned about the prospect of patent reform, particularly with respect to the proposed changes to the "First to File" Rule.  Ku and Wolinsky also stated that both systems were now adding export control language to their NDAs as well as licenses.  Finally, with respect to sponsored research, Ku indicated that the Stanford policy is that the university is declining to set a royalty rate for inventions arising out of sponsored research, whereas Wolinsky indicated that UC continues to agree to a royalty rate range.

All in all, Ku and Wolinsky gave a very informative presentation on current licensing policies at their respective institutions.  After attending this presentation, however, I now find myself wanting to hear more from other universities on their current policies and procedures on licensing.  So, I am formally issuing an invitation into the blogosphere to any other universities who would like to share information to prospective licensees on their current licensing policies, procedures, and negotiating strategies: please share with us any insights on licensing at your schools, and this blog will gladly provide you a platform to publish that information to the biotech and licensing community.   I welcome your commentary.