Regulatory Sausage Making

The old adage comparing the unattractiveness of political decision-making with sausage making may apply to Food & Drug Administration drug approval decisions in the future.

If Iowa Senator Chuck Grassley has his way, every FDA drug advisory committee may soon replicate the Avandia debate from last summer -- when the head of the new drug review office in charge of the original Avandia approval debated the head of FDA's drug safety office in an open airing of differing opinions from within the agency. My colleague Ramsey Baghdadi wrote compelling about the drama at the Avandia meeting last summer. (Click here to read the story.)

In the most recent version of what has become an annual year-end epistle to FDA on the agency's handling of the approval of Sanofi-Aventis' antibiotic Ketek (telithromycin), Grassley demands that FDA start bringing the wide range of different staff opinions on new drug applications out in the open for the advisory committee and the public to hear.

Until recently, FDA has tried to present its advisory committees with consensus positions on drug applications and scientific issues in the applications. But after investigating Ketek, Grassley finds that approach too glossy and a way to avoid public oversight of tough scientific decisions.

The Avandia meeting should be the new model. Grassley prodded FDA to adopt the same format where “FDA reviewers were allowed to express their professional opinions and recommendations regarding those drugs.” In case FDA missed the gist of his message, the senator repeated: “It is important not only that advisory committees be provided with complete and accurate data but also any differing scientific opinions and/or assessments regarding the data from FDA reviewers.”

And NDA sponsors should watch how FDA responds to Grassley's pressure. If he succeeds in opening up the FDA advisory committees to more disputes between FDA staff, he could well bring the all the blood and guts of an Iowa sausage factory to the drug review process. (See TheRPMReport.com for more coverage of the prospects, implications and background on more open debates at FDA advisory committees.)

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ENHANCE Interrogation Technique

So what was our colleague Ramsey Baghdadi's "little birdie" talking about when s/he said to expect "something big" to get released this week?

Maybe it was yesterday's encore public throttling of Avandia in the Journal of the American Medical Association. That study concluded that older (age 66+) patients on Avandia had "an increased risk of congestive heart failure, acute myocardial infarction, and mortality when compared with other combination oral hypoglycemic agent treatments."

But we're not so sure--the sequel is rarely as good as the original, and why would anyone be whispering to a journalist about a study that was probably available on an embargoed basis anyway.

Perhaps instead our avian friend was referring to the latest chapter in the ENHANCE saga? Yesterday Schering-Plough's Fred Hassan and Merck's Dick Clark got some mail from the House Committee on Energy and Commerce, and it wasn't a Christmas card.

The letter, from committee chairman John Dingell (right) and subcommittee on oversight and investigations chair Bart Stupak, both Michigan Democrats, questions the companies' delay in releasing data from the ENHANCE study, which concluded in April 2006. ENHANCE was designed to compare the efficacy of Vytorin (ezetimibe [Zetia] plus simvastatin) and simvastatin alone.

Merck and Schering-Plough have five billion reasons to hope Vytorin does a better job of preventing plaque buildup in the arteries than now-generic simvastatin, and a combination of the significant and multiple delays in releasing data from the 720-patient trial, a delay in registering the trial with clinicaltrials.gov, and the apparent manipulation of the trial's primary endpoint drew the Congressional attention.

As the WSJ's Health Blog reports, both companies are still reviewing the letter and have yet to repond. For now, they say the data will be released at next March's American College of Cardiology meeting. Meanwhile, Dingell and Stupak contend the pharmas have some explaining to do.

But who knows, maybe that little birdie has something else up its sleeve.

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The Right Kind of FDA Defense

The FDA drug safety law finally made it through Congress yesterday, despite a last minute hold-up over the perennially thorny issue of pre-emption.

The broad outlines of the bill have been clear, and the final passage doesn’t change the big picture impact we’ve been telling you about. (You can read our take on the drug development impact here, and on the new rules for DTC here.)

Still, it is somehow appropriate that pre-emption was the final stumbling block to enactment of the new legislation, because at its heart the FDA Revitalization Act is about rebuilding the credibility of the agency as a drug safety regulatory.

The agency’s credibility is critical in product liability cases, and brand name companies are frustrated that it isn’t more formally recognized as a defense against lawsuits. Industry has long wanted more protection in liability cases, arguing that they should not face lawsuits that in effect second-guess FDA’s decisions about whether labeling appropriately warns of a product’s risks. They want an explicit “FDA defense,” and they hoped that Congress would spell that out as part of the sweeping drug safety changes included in the FDA Revitalization Act.

That didn’t happen. Instead, at the last minute the House inserted a clause stipulating that nothing about the new law can be interpreted as relieving the sponsor of the obligation to “maintain its label in accordance with existing requirements.” Former FDA Deputy Commissioner Scott Gottlieb outlined the issue in yesterday’s Wall Street Journal and makes the case for why industry should be upset.

There is no doubt that the technical-sounding change is a setback for manufacturers facing liability suits. But the glass is still more than half full. Even without new product liability protections, the law should help manufacturers immensely by letting FDA rebuild its credibility as a regulator.

The tradeoff is clear: a tougher and more formally regulatory system that will restrict the market size for many new products. The payoff should come in the form of fewer rejections of pending applications, fewer nasty setbacks like the Avandia debacle or the Zelnorm withdrawal—and ultimately in fewer punitive actions by policymakers or juries who have lost faith in the ability of FDA to assure the safety of medicines.

It is not just product liability cases where the loss of faith in FDA’s credibility is costing the industry dearly. It is in product decisions made or not made, and in policy actions by state governments designed to step into the void. (The RPM Report took an in depth look at the cost of FDA’s credibility problems in this story. If you are not a subscriber, click here to register for a free 10-day trial.)

During the Food & Drug Law Institute advertising and promotion conference September 17, one session focused on a whole host of state legislative initiatives designed to clamp down on professional promotion by manufacturers. Pharmaceutical Research & Manufacturers of America VP Jan Faiks suggested that all of the legislative initiatives can be traced back to the premise that “FDA is in the pocket of the drug manufacturers and therefore the states must become mini-FDAs and do their own compliance and regulation.”

The new legislation holds that promise of reversing the impression that FDA just does industry’s bidding. In that end, that kind of FDA Defense may be even more valuable that a pre-emption clause.

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Drug Safety...or Food Safety...or Tobacco Safety...or Pet Food Safety...or Dietary Supplement Safety?

So which is most important to you? Well, if you're in charge of FDA, they all are. That came through loud and clear during a health care reporters breakfast with commissioner Andrew von Eschenbach organized by the folks at Health Affairs.

But fortunately for us here at the IN VIVO Blog, we only have to worry about drugs and biologics. With Congress taking off for their August recess, it looks like the Prescription Drug User Fee Act reauthorization as part of the much grander FDARA drug bill will have to wait until September to get passed.

So wait, doesn't that mean droves of FDA employees will be out of a job come September 1st because there will be no money to pay them (FDA gets half of its drug review budget from user fees)? Not so much. Von Eschenbach said the agency has already dipped into "carry-over" funds to ensure the agency will run smoothly while they wait for lawmakers to act. He expects/hopes the bill will pass in the first few days when the House and Senate come back from recess. Von Eschenbach emphasized he was working very closely with specific players in Congress to make sure that happens. The "carry-over" money, which seems to have magically appeared, is enough to last a couple of months before FDA would have to send out lay-off notices.

The RPM Report will be hosting a webinar on August 14 in partnership with the law firm Ropes & Gray to explain the commercial impact of the new drug safety rules for pharma and biotech companies. This will be the first in a series of audioconferences on the pending drug safety reforms.

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Dissin' Steve Nissen?

The New York Times ran an interesting profile of the Cleveland Clinic's Steve Nissen on Sunday in light of his "controversial" meta-analysis finding over a 40% increased risk of heart attack for diabetes patients on GlaxoSmithKline's drug Avandia.

I interviewed Dr. Nissen a few months ago. Check out our July issue of The RPM Report called "Inside the Mind of a Serial Drug Killer" to find out what makes him go, what would make him stop and what he thinks is driving some members of Congress to criticize his efforts. Note, the Times may have higher circulation than The RPM Report , but we had the better headline.

But don't take our word for it. Here are a couple of excerpts:

The RPM Report: What would make you stop doing this type of work in the area of drug safety?

Nissen: It is all of our jobs, not just the FDA’s job to do this. Those of us in the physician community owe it to our patients to give equal balance and weight to positive and negative findings about drugs, and so should the FDA. Even if the FDA were doing an outstanding job, it’s still the responsibility of independent scientists to do these sorts of things, so it really isn’t about the FDA.

The RPM Report: So creating two drug centers—one for premarket review and one for postmarket surveillance—would not stop you from doing this kind of research. You feel this is a moral obligation.

Nissen: It is a moral and ethical obligation; it’s just about good science, it’s a scientific obligation. Science is about pursuing the truth and wherever that leads you. If we had very, very good regulatory agencies looking after this, there may be fewer opportunities to turn these things up.

How did we find out about fen-phen? There was an independent group of physicians that began seeing fen-phen patients with valve abnormalities. They said, “Oh my God, this is a potentially serious problem, let’s publish it,” and they did a great thing, they probably saved a lot of lives; they’re heroes.

The RPM Report: Why is there such a visceral reaction to you and the research you are doing? FDA’s meta-analysis of Avandia studies showed similar findings as your meta-analysis.

Nissen: Right. Part of the problem is this is not about me. One of the issues is sometimes when you don’t like the message; it’s easier to attack the messenger. It’s to be expected, but we’ve got to keep everyone focused on the science. I was very restrained in that [Avandia] hearing, I didn’t attack back. I simply said: this is what we did, this why we did it, this is why it’s important, and I’m going to stay on that message because it’s the right thing to do.

The RPM Report: Rep. Darrell Issa (R-Calif.) seemed particularly unnerved by your analysis and the process you took to get it published?

Nissen: He was wrong about the statistics, you cannot calculate an effect size if there are no events [studies with no heart attack events were excluded from Nissen’s meta-analysis]. He had been briefed by people giving him campaign contributions and that happens to be GSK. I looked it up. The three people on the attack at the hearing were very heavy recipients of GSK campaign money.

For the rest of the interview, subscribe to The RPM Report. Also, Nissen will be speaking at our annual FDA/CMS Summit in December in Washington, D.C. in case you want to hear him in person.

Speaking of Avandia, there is a July 30 fact-gathering meeting between FDA and Glaxo (Takeda, which markets Actos, is an invited guest) regarding the cardiovascular profile of the diabetes drug. While something conclusive could come out of that meeting, it's highly doubtful. So we'll just have to wait and see whether Nissen and his meta-analysis are vindicated for finding risks that hadn't been previously uncovered or his findings were rushed, sloppy and wrong. Stay tuned. It could be a while.

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Higher Tax, Fewer Deals?

The IN VIVO Blog has been somewhat mum on the carried interest debate. Frankly, this topic is being covered to death elsewhere (The link goes to PE Hub but there's no shortage of discussion.)

This topic is important, no doubt, crucial even, but Mom always told us if you don’t have something fresh and interesting to blog about than it’s better not to blog at all. (Well, she would have said that.)

So we’ve been asking around a bit, trying to get a sense from our VC community on the potential impact of these changes. To be honest, the change put forth by the Democrats didn’t really sound the alarm bells in our virtual hallways. But the same apparently isn’t true in the actual hallways of VC firms investing in life sciences. IN VIVO Blog expected VCs to answer queries with a “Congress will be Congress” attitude similar to the one put out when discussing changes at the FDA or CMS.

But there’s some genuine concern here. No question, much of that concern most likely has to do with a diminished paycheck. But there’s some fear surrounding the impact these changes could have on the availability of capital.

An email from one West Coast VC:

I really believe that these proposed new taxes will make it so that some new companies will not get funded. These taxes essentially raise the cost of capital and if the returns are not there to the GPs then they will not get funded eliminating many high risk or sometimes questionable deals. One has to remember that often deals look promising and then don’t make it while the opposite is true as well but maybe not to a greater extent. If the cost of capital is high then those marginal/high risk deals won’t get done.

It is the same concept as lower interest rates and lower borrowing hurdles allowed the housing market to boom. If the cost of capital rises then it eliminates those who are at the margin. The same is true in our business. Those on the margin lose—fewer jobs and lower growth.

The suggestion that this could eliminate “many high risk or sometimes questionable deals” rings true and does sound an alarm. After all, doesn’t that describe most biopharma deals and a good deal of device companies as well.

Could this change in taxation have a particularly detrimental impact on the life sciences industry, pushing VCs even further away from funding true start-ups? Even worse, would this aggravate the diversion of dollars away from smaller, venture capital firms looking to do these deals. Or perhaps, as A VC Blog suggests, the best VCs will just invest their own money, forget the institutional dollars.

A VC Blog also had what I thought to be a very thoughtful position later on.
Mom did teach us not to covet other people's stuff, so the "Tax the Rich" crowd won't get a sympathetic ear here. Still, the suggestion that the GP's carry on "other people's money" goes beyond that simplistic idea. The idea that this income should be taxed as salary isn't that far out (or far left) as some would like it to appear.

We’ll update with interesting points of view as we continue to talk to folks. But don't feel like you need to wait for a phone call. Consider this an open invitation to opine on what impact the suggested changes will have on the life sciences industry.

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