Magazine Article | February 1, 2009

A Challenging Year For BioPharma

Source: Life Science Leader

By Ann Roberts Brice

PhRMA’s head of regulatory affairs indicates some issues  and trends industry  executives should be  watching in 2009.

2009 promises to be a challenging regulatory year for the biopharmaceutical industry, with new leadership at the FDA and the continued implementation of the FDA Amendments Act (FDAAA) of 2007 — landmark legislation that ushers in a new era with renewed emphasis on product safety. The appointment of former Senate majority leader Tom Daschle as Secretary of Health and Human Services (HHS) signals that healthcare reform is near the top of President Barack Obama’s agenda. Daschle is committed to extending affordable healthcare to everyone in the United States. More insured people will translate to sales of more medicines, but whether government-negotiated pricing will follow remains to be seen.

Against this backdrop, Alan Goldhammer, Ph.D., of the Pharmaceutical Research & Manufacturers of America (PhRMA), shared his views in an interview with Life Science Leader about what biopharmaceutical executives and managers can expect going forward. As VP of Scientific & Regulatory Affairs, Dr. Goldhammer sees the appointment of a new FDA Commissioner as a key step.

“We hope a commissioner is identified and confirmed early,” Goldhammer said. “The agency needs someone with strong leadership and management capabilities to run it in the 21st century.” During four of the eight past years, the FDA has been headed by an acting commissioner. Prior administrations have similar track records.

Some pundits speculate that the new appointee might reorganize the agency. “The FDA’s Commissioner has some powers to shape what the agency ought to look like,” noted Goldhammer. The Commissioner oversees the safety of food, drugs, and medical devices and will face challenges related to import safety, ongoing implementation of its new FDAAA authorities, and ensuring the agency is capable of making sound regulatory decisions.

The basic challenge, Goldhammer continued, is to make sure the agency has sufficient budget and personnel to do its job. According to the FDA, its Center for Drug Evaluation & Research (CDER) hired 780 new staff members last year, some of whom will become frontline reviewers. Nevertheless, CDER said it is currently still understaffed.

According to the FDA, “It has traditionally taken two to three years for a new reviewer to become fully trained and proficient in the review process.” CDER has a set of standard training courses for reviewers. Goldhammer believes they need to be trained and mentored sooner rather than later.

The Effects Of The FDAAA
The implementation of the FDAAA will be the Commissioner’s next most important job. Congress’ intent with that statute was to clarify the FDA’s powers related to premarket and postmarket drug safety. It contains new authorities allowing the agency to require postmarket studies and clinical trials, safety labeling changes, and Risk Evaluation and Mitigation Strategies (REMS).

Since FDAAA’s passage, the FDA may require a study at any point, Goldhammer explained. If a drug is on the market and the agency sees a need to better understand an issue, it can go back to the company and require that study. In the past, the FDA could only require a postmarketing study as a condition of a drug approval.

With REMS, the agency can tell sponsors to build risk management plans into an approval to ensure that a drug’s benefits outweigh its risks. The goal is to better understand safety issues and, if they exist, to develop a strategy for addressing them once the drugs are on the market.

The expectation is that companies will look at risk management themselves. “Companies are trying to anticipate, as they go through development, what the regulatory agencies might require,” said Goldhammer, although the data is insufficient on how REMS will be applied.

The FDA said in a progress report last September, one year after FDAAA’s enactment, that although it has approved 13 REMS for medications, 11 of the 13 approved REMS included only medication guides for patients and a timetable for safety assessment. This has ‘minimal’ impact from a regulatory perspective, noted Goldhammer.

Goldhammer estimated that probably a year from now the industry should be in a better position to assess the overall impact. Too few drugs have been reviewed (using REMS) to draw any ‘permanent’ conclusion. “But one thing is clear,” he added, “REMS will cause companies to conduct more and more tests so they can better understand the product during drug development.”

Supply Chain Safety Issues
Goldhammer conceded that the drug development process has lengthened in recent years, but due to factors that predate the onset of REMS. “A number of safety issues came up, some in relation to classes of drugs and others affecting a drug here and there.”

Alarms were raised over heart-related side effects of Merck & Co.’s Vioxx (rofecoxib) for treatment of pain and GlaxoSmithKline’s Avandia (rosiglitazone) for diabetes, which set off Congress’ drug safety hearings and, in part, pushed passage of the FDAAA. Goldhammer could not predict the impact of increased safety scrutiny on drug development costs or approval delays, as important drug safety portions of the FDAAA took effect only last March. As to the impact on industry growth, he said, “We don’t want to jump the gun [with projections] until there is more data.”

Some industry experts contend that closer scrutiny of safety issues has already resulted in more modest levels of U.S. sales growth of prescription drugs. It brings “added caution to the market,” stated IMS Health consultants in a report. In its annual sales forecast, IMS said that fewer product launches would be a contributing factor to expected low single-digit sales growth in 2008 and 2009.

Despite this prediction, some industry experts are now speculating that the tighter REMS safety regulations may give the FDA more confidence to approve new drugs. They are encouraged by FDA’s 2008 tally of new drug approvals compared with the previous year.

Last November, the FDA confirmed that 21 new molecular entities (NMEs) had been approved in the first 11 months of 2008. Even excluding approvals during December, the total to date was higher than the previous year when only 16 NMEs and 2 BLAs (biologic license applications) were approved for the entire 12 months.

This year, as a result of the FDAAA, doctors and patients will be able to view online the beginnings of a trial results database to be added to the National Institutes of Health’s (NIH) clinical trials registry. The effort will consume extra staff time at companies “to read what the trials were and to link them [the results] directly to the registry, so there’s transparency,” noted Goldhammer.

Separately, the FDA has tackled the import safety issue with a Beyond Our Borders program under which it has opened, or plans to open this year, inspection offices in China, India, Europe, and Latin America with a total of 43 employees. The action followed the doubling of the volume of food and drug imports over the past five years as a result of the increasingly global economy.

Goldhammer maintains that the added oversight will not have any effect on overseas manufacturing by U.S. drug companies as their plants are already in compliance with all the appropriate regulations. The contaminated heparin, which was seized by the government last year after being linked to multiple adverse events and deaths, was an unusual case, he said.

The supply chain for the raw material for heparin, a blood-thinning drug, he continued, was very complicated. It relied on numerous small businesses that really could be called kitchen businesses, which is “a different issue than the overwhelming majority of drug imports.”

Nonetheless, these overseas FDA offices will be working with government officials and private manufacturers to ensure U.S. import standards are met. The FDA employees will inspect facilities, provide technical assistance in developing economies, and help create third-party inspection certification programs.

In the year ahead, such measures will lay the groundwork for building safety into products from the beginning, intervening through targeted risk-based inspections, and responding rapidly when dangers emerge, says the FDA. Typically, the FDA has performed only a couple of hundred foreign drug manufacturing inspections per year.

Will Healthcare Reform Boost Drug Sales?
On the domestic front, the new administration has committed itself, through healthcare reform, to broadening the insured population base, which is likely to boost drug sales at least in terms of units. For sure, generic drugs should benefit from increased focus on cost containment. However, Goldman Sachs financial analysts predict that expanded coverage will raise the prospect of government involvement in negotiating drug prices; Charles Schwab analysts agree. PhRMA argues that such a move could do more harm than good as it could limit access to patients in need.

Healthcare experts disagree as to whether any nationalized alternative to private insurance could be enacted as early as 2009 because of the cost and complexity of doing so. They argue that incremental changes instead may be pushed through, such as an expansion of the State Children’s Health Insurance Program (SCHIP).

Whatever shape healthcare reform takes, complex negotiations will undoubtedly extend well into 2010. In the year ahead, while the degree of change in the life sciences industry has yet to play out, it is a given that regulatory changes will definitely be at the forefront.