The biotech industry is beginning to assess what the impact of the new Obama administration is likely to mean for individual biotech companies.

A key concern for the industry is the likely financial implications of the Obama presidency on biotech companies, according to an article by SFGate. 

What financial concerns are at issue?

While biotech companies are definitely concerned about the bad economy and the credit crisis, they are also  concerned about an anticipated push for cheaper drug prices, which could potentially have a very detrimental impact on biotech companies, since any such increase could negatively affect the profits that biotech companies could potentially achieve on their drugs and would perhaps impact companies’ valuations as well.

Another concern for the industry is what will happen to the Food and Drug Administration under an Obama presidency, accoding to the SFGate.  During the Bush Administration, Congress criticized the Administration for how the Food and Rug Administration was run–in particular, they viewed it to be "underfunded" and "ineffective." As Adam Feuerstein of the Street.com reported: "The agency is in turmoil. Morale is low, resources are scarce and too many drug approvals have been delayed at best, or worst, have become politicized."  President-Elect Obama will presumably sink some money into the organization and try to take it in a new direction, which he may begin by choosing new leadership.  According to SFGate and  Feuerstein, a few of the names being considered include: Dr. Steven Nissen, a cardiologist for the Cleveland Clinic;  Dr. Scott Gottlieb, who worked directly under Mark McClellan when he was FDA commissioner; and Janet Woodcock, a veteran agency official who is the favored choice of drug manufacturers.

One highly anticipated change by the new administration is the likely adoption of a new view on stem cell research, reported Yahoo News, which reported that  Obama’s Transition Chief John Podesta indicated this weekend that Obama is currently reviewing President Bush’s executive order on stem cell research and may reverse that order fairly quickly.

As for other changes that might be in the works which would affect the industry, the Patent Baristas have provided an extended list of potential changes that we may see under the new administration, including but not limited to doubling federal funding for basic research over the next ten years, making the research and development tax credit permanent, and reforming the Patent and Trademark Office.

All in all, it seems clear that the new administration will bring "change" to the biotech industry; however, the jury is still out as to whether any such "change" will be for the better or for the worse.   The industry is hoping–like the majority of Americans that voted for Obama on election day–that the "change" Obama will bring will be for the better.

According to an Associated Press report, Harvard researchers have been reviewing the recent rash of problems with approved drugs and have come to a "disturbing" conclusion: drugs that were approved by the FDA in a rushed timetable have had more problems than drugs that were approved on a more leisurely timetable.  The results of this research have just been published in Thursday’s New England Journal of Medicine and provide support for the researchers’ conclusion.

The Associated Press explains as follows:

Deadlines were first imposed on FDA by a 1992 law that allowed drug makers to pay millions of dollars in fees directly to the cash-strapped agency so it could hire more reviewers and clear a backlog of pending drug applications. In return, FDA had to make a decision — either approve or reject — on 90 percent of all drug candidates within 12 months of their application, or lose money. The deadline was 6 months for drugs so novel or potentially lifesaving to be classified high-priority.  Congress tightened the deadline for most drugs to 10 months in 1997.

Amid concern about risky drugs, Harvard professor Daniel Carpenter took a closer look at the impact. First, he found approval is 3.4 times as likely in the two months leading up to the user-fee deadline as at any other time.  Drugs approved in that just-before-deadline period had a four-to five-fold higher rate of later being withdrawn or requiring serious safety warnings, compared with drugs approved faster — presumably slam-dunks — or those that miss the deadline, Carpenter concluded.

While the FDA is denying that an accelerated review timetable is responsible for the recent wave of problems with approved drugs, the New England Journal of Medicine report certainly suggests that the contrary may in fact be true. 

In light of this evidence, what should be done to protect the public? 

Two possibilities quickly come to mind: first, there is the option of bulking up the FDA staff to more effectively deal with accelerated review timetables, and second, there is the option of lobbying Congress to loosen the tight deadlines, so that the FDA has more time to do a more thorough review of new drugs.  Given the current budget deficit, the second option is likely more realistic.

Perhaps patients who are pursuing class action suits against Merck and other companies who have sold these problem drugs should redirect their efforts towards lobbying for new legislation in Congress to relax the current FDA approval deadlines.  Taking this action–rather than pursuing class actions suits–may very well be the step most likely to produce real change in order to best protect the public. 

Following up on our blog posting last week about the indictment of the former Intermune CEO on fraud charges related to allegedly marketing off-label uses of a drug, an unrelated class action suit has been filed in the state of Pennyslvania against Pfizer and Warner-Lambert alleging neglience and negligent and intentional misrepresentation for allegedly conducting a marketing campaign to promote off-label uses of its Neurontin drug and its generic equivalent, gabapentin, reported Amaris Elliott-Engel for Law.com.  These claims have survived a partial summary judgment ruling by Philadelphia Common Pleas Judge Mark I. Bernstein.

This case is reported to be the first case to hold that a brand name manufacturer can be held liable for money spent to promote a drug manufactured by a third party.

Elliot-Engel reported on the case as follows:

During the class certification hearing, the plaintiffs produced evidence that the defendants unlawfully promoted Neurontin to physicians for off-label use, despite the lack of scientific proof that the drug was effective in treating those conditions. . . . A $40 million promotional budget was devoted to those efforts, including the insertion of anecdotal articles in medical journals, paying physicians considered to be opinion leaders and sponsoring continuing medical education conferences that actually were paid promotional events, Bernstein said. At least 200,000 prescriptions for Neurontin were written in Pennsylvania, and the defendants earned between $53 million and $64 million on the drug per quarter in the state, Bernstein said. . . .

Neurontin was approved to treat epilepsy in 1993 and neuralgia in 2002. . . .Bernstein granted class certification last June. The class involves all people who purchased Neurontin and gabapentin between 1995 and the present for medical conditions other than adjunctive therapy for epilepsy and management of pain associated with herpes zoster rash outbreaks.

Each class member has damages worth less than $75,000; the class action members seek a refund for the amount they spent on Neurontin/gabapentin prescriptions given to treat off-label medical conditions not approved by the FDA, according to court papers.

This case and the recent indictment of Dr. W. Scott Harkonen raise some interesting public policy questions about off-label uses of medications and the promotion of such uses.  Have drug companies and the medical community been too quick to embrace off-label uses of drugs that are approved for other medical conditions?   Should there be greater regulation of off-label uses of drugs than what currently exists?   Do patients really understand when they take an approved drug for an off-label medical condition the full ramifications of what "off-label" really means? 

I am interested in hearing what the blog community thinks about this issue, so I welcome any comments on the topic.  We will continue to follow these two cases here at the California Biotech Law Blog as they unfold.

Bioworld Today is reporting that the FDA and Congress will be joining forces to develop follow-on biologics legislation.

According to Bioworld Today, the Bush Administration indicated in the 2009 federal budget package released last week that “it would seek regulatory authority for the FDA to approve follow-on biologics, also called biosimilars or biogenerics, which would be financed through user fees. Currently, no such approval pathway exists for follow-on biologics.” Both the House and Senate had introduced follow-on biologics legislation last year, and planned to move the legislation forward in 2008.

What is the FDA’s current vision for the legislation?

Bioworld Today reported:

In a document titled “Other Legislative Items” that is part of the White House fiscal year 2009 budget, the administration said the follow-on biologic legislative proposal would include a “predictable and public guidance process for licensing follow-on protein products” under the Public Health Service Act.

“The proposal will prescribe the type of data required for FDA to review applications for follow-on protein products and will require labeling for the safety concerns related to the interchangeability of these products,” the Bush administration said.

The proposal also will include “adequate intellectual property protections to preserve continued robust research into new and innovative life-saving medications,” the document stated.

The news was viewed as a promising development  by both Sen. Charles Shumer (D-N.Y.) and Department of Health and Human Services Secretary Michael O. Leavitt, both of which were interviewed by Bioworld Today.  Similarly, Jim Greenwood, CEO of the BIO industry organization indicated his support for the FDA approach, as well as Kathleen Jaeger, CEO of the Generic Pharmaceutical Association (GPhA), who also expressed her approval for the development.  Having said this, the Bio Job Blog took issue with the FDA’s decision, stating:

I don’t think that Congress’s involvement is a good idea given the political wrangling, deal-making and concessions that must be made in order to get legislation passed.

Is the Bio Job Blog right to express concern about how this new joint effort will pan out?

Well, there is no doubt that the legislative process is time-consuming and is inevitably intertwined with politics and political compromises.  However, it is also true that a collaborative effort can greatly speed up the process, and having the administration on board means that any agreed-upon legislation is unlikely to end up with the words “vetoed” stamped on its front.  I would have to say that on the whole the development is a positive one, and suggests that we are one step closer to voting into law follow-on biologics legislation, which even Bio Job Blog concedes is likely, stating:

It looks as though follow-on biologics may become a reality in the US. . .  . I don’t think Americans will see follow-on biologics on the market before 2010 or 2011. That said, it gives us Americans something to look forward to!

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 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 House has passed legislation that will overhaul the Food and Drug Administration, but has declined to address the provisions of the legislation dealing with generics, which previously passed in the Senate.

The Wall Street Journal reported:

The House FDA bill, approved 403-16, mostly parallels a bill that passed the Senate in May. Both versions would devote more money to monitoring the safety of marketed drugs and increase the agency’s authority over medications that raise safety concerns. The agency would have the clear ability to order follow-up studies, restrict distribution and enforce changes to the medications’ labels. The bills don’t grant the FDA the power to force a moratorium on direct-to-consumer advertising, a tough restriction that was discussed earlier, though the agency would be able to levy fines for false and misleading promotions.

The conflict between the House and Senate legislation means that we can expect more debate over generics in the coming months.

According to The Wall Street Journal’s Health Blog, house leaders appear to be “cooler on biogenerics than their counterparts in the Senate.”

Does the House’s action signal the death knell for generics legislation this year?  It may be too soon to say for certain, but it is clear that the legislation still has a rocky road ahead.

Of course, even if the House ends up passing the legislation ultimately, it’s unclear whether it will be supported by President Bush.

The Los Angeles Times reported:

It’s unclear how the White House will react to the finished product. Before the Senate voted in May, the administration said it agreed with the goals of the legislation but had serious concerns about aspects of the risk plans.

So, if the generics provisions of this legislation were not passed by the House, what did make it through?  The Los Angeles Times explained as follows:

The House bill follows the same basic approach to safety as the Senate version, but consumer groups said it would give the FDA stronger regulatory powers in some areas.

Both bills would set up a computerized network to scan medical insurance and pharmacy records for patterns that could signal problems with new drugs. The FDA now relies on anecdotal reports submitted by doctors and drug companies, which are believed to capture only a small fraction of bad drug reactions.

A computerized system could take several years to deploy. The Senate bill sets some benchmarks for the FDA; the House version does not. . . . .

The House bill also includes stiffer fines for drug companies that violate FDA requirements and tighter rules to reduce conflicts of interest among outside scientists who advise the agency.

There is little doubt that we are in for a long battle ahead on the generics issue.  The biotech world will be following this issue closely over the next few months to see how it unfolds.