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Senate Finalizes Drug Compounding, Tracking Legislation

Congress gave final approval this week to new legislation to strengthen FDA authority to oversee large pharmacy compounders of sterile injectables and to require more comprehensive tracking of prescription drugs moving through the global supply chain. The House passed the the Drug Quality and Security Act in late September, but Senate action was delayed, first by the federal government shut-down in October and then by individual efforts to force a vote related to Obamacare.

But continued public outrage over deaths from contaminated injectables produced by large compounding pharmacies, along with rising concerns about counterfeit and unauthorized drugs entering the US market, managed to overcome the partisan stalemate on Capitol Hill to win strong approval for the measure. No one gets all they wanted from the legislation, but it provides more clarity and predictability to drug oversight programs and moves forward initiatives designed to enhance the safety and quality of medicines in the United States.

Alan Coukell, senior director of drugs and medical devices at The Pew Charitable Trusts, praised the bill as “meaningful” and said that efforts to block counterfeit and contaminated drugs will “help protect lives and alleviate these costs by ensuring that prescription drugs are safe, effective and of the highest quality.”  President Obama is expected to sign the bill fairly quickly

Voluntary system
As previously noted here, the first section of the bill clarifies FDA’s authority over drug compounding, which resolves questions raised by diverse federal court rulings on the issue. Pharmaceutical manufacturers gained legislative language specifying that compounders cannot produce drugs that are “essentially a copy of a marketed drug.” But the bill is not as strong as FDA and patient advocates had hoped, as it fails to set specific criteria to differentiate large commercial operations from local compounding pharmacies. The legislation instead relies on a voluntary registration system for large-scale compounders, which will have an impact only if large purchasers of compounded drugs insist that their suppliers meet FDA standards.

Pre-empting states
The main gain for manufacturers from the drug supply chain security section of the act is to pre-empt state pedigree laws, including the comprehensive California statute slated to go into effect in 2015. The new bill generally follows the Senate’s 10-year time-line for establishing an electronic, interoperable, unit-level drug tracking system. All drug packages will have to carry serial numbers in four years, and FDA will establish verification and traceability standards and provisions for data exchange.

The tracking system will include manufacturers, wholesaler/distributors and pharmacies, with some exceptions for small firms. In addition, third-party logistics providers such as Federal Express and UPS get a pass on keeping records and participating in investigations, which could create serious gaps in the tracking process.

Some critics blasted the bill for giving industry so much time to establish unit-level tracking and for imposing fairly weak oversight of compounders. But FDA, manufacturers, and policy makers seem pleased to gain enactment of any legislation at all. The long-term impact remains to be seen.

Liability Looms for Generic-Drug Safety Labeling Changes

FDA is proposing to revise its rules to permit generic-drug manufacturers to initiate safety-labeling changes instead of waiting until the brand company takes action. The aim of the new policy is to inform consumers more quickly of emerging safety concerns, but it also could create confusion by allowing prescribing information to differ among generic and brand products.

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Health Reform May Boost Illicit Drug Sales

Health plans that limit drug converge may encourage consumers to obtain medicines illegally, according to pharmacy experts. Marv Shepherd, director of the Center for Pharmacoeconomic Studies at the University of Texas College of Pharmacy and others noted at the Partnership for Safe Medicines Interchange in October in Washington that an increase in narrow health plan formularies that carry only one or two drugs per class or category will boost purchases of substandard, counterfeit and diverted prescription medicines through illicit operators. Patients accustomed to treatment with a certain drug may seek out other sources of supply if a streamlined plan fails to provide coverage for that medicine, explained Bryan Liang, anesthesiologist and law professor at the University of California San Diego.

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Woodcock Committed to New Drug Quality Office

Establishing a new Office of Product Quality in the Center for Drug Evaluation and Research (CDER) is a top priority for CDER director Janet Woodcock, and she plans to take charge of the operation personally when it is established next year. Her much-discussed reorganization effort is not just an exercise in moving around boxes, but aims to ensure the delivery of quality medications to patients, she explained at the Generic Pharmaceutical Association’s Fall Technical Conference in October.

Woodcock expects OPQ to become operational in 2014, and is moving forward with completion of a concept of operations for the new office, along with an organizational structure. But it is “not a done deal,” Woodcock observed at the ISPE annual meeting last month. She expects it will take at least six months for the new organization “to become real.”

One aim is to establish “one voice for how FDA regulations drug quality”––within CDER and in its relationships with other FDA of offices and other regulatory authorities. This will apply to new drugs, generics, over-the-counter products––biotech therapies and small molecules alike.

OPQ will form specialized staffs for product review and for inspections, with specific units to handle active pharmaceutical ingredients, new drugs, biotech products, and “life cycle drugs” (i.e., generics). OPQ also will bring together microbiologists for all products to provide a unified approach to microbiology.

A new Office of Surveillance in OPQ will oversee quality performance at facilities through pre-approval and routine inspections, with an eye to evaluating if an operation meets performance metrics that indicate a quality operation. And a Policy Office will issue guidance and regulations, while ensuring consistency in CDER actions. Surveillance will be enhanced by CDER gaining more complete information on its inventory of establishments, an undertaking that ideally will lead to less frequent field inspections.

Another theme is to “mitigate risks” by applying appropriate measures and analytical methods to different products. Woodcock expects risk assessment for every product to evaluate critical issues and employ statistically valid sampling.

The main aim of this reorganization is to achieve a “culture of quality in industry,” Woodcock said at the ISPE meeting. These plans will require considerable change within FDA and in industry, and manufacturers, she added, have to recognize that there is a “cost to poor quality.”

Shutdown Forces FDA, HHS No-Shows

Officials from FDA and the National Institutes of Health (NIH) were scheduled to explain developments in clinical trial registration and transparency at the Drug Information Association’s conference on Clinical Trial Disclosure in Bethesda, Md. this week. They sent in slides, and one HHS official even pre-recorded his presentation. But the government shutdown kept them from showing up in person.

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Congress Clarifies Drug Compounding, Tracking Policies

Public outrage over deaths from contaminated injectibles produced by large compounding pharmacies, along with rising concerns about counterfeit and unauthorized drugs entering the U.S. market, managed to lift the stalemate on Capitol Hill long enough to generate agreement on reform legislation. After months of public hearings and negotiations, Democrat and Republican leaders of the House Energy & Commerce Committee and the Senate Health, Education, Labor and Pensions Committee unveiled a compromise bill last week. No one gets all they wanted from the Drug Quality and Security Act, but it provides more clarity and predictability to drug oversight programs and moves forward initiatives designed to enhance the safety and quality of medicines in the U.S.

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Pharma Revenues, Health Expenditures Set to Increase

Healthcare spending will rise modestly in the US over the next decade, as economic growth picks up, health reform provides expanded coverage, and the population continues to age, according to an annual analysis from the Centers for Medicare and Medicaid Services (CMS). These trends similarly will boost expenditures for prescription drugs, but not as quickly as in previous decades.

Outlays for healthcare in the US have grown much more slowly over the past three years, largely due to an economic decline that deterred individuals from seeing doctors and to increased cost-sharing requirements for the privately insured. Minimal growth is continuing this year, but expenditures will begin to rise in 2014, boosting the average growth rate for national health spending to 5.8% through 2022, according to the National Health Expenditure Projections from the CMS Office of the Actuary and published by Health Affairs. Much of the spending will come from public agencies, as healthcare financed by federal, state, and local governments reaches $2.4 trillion in 2022, nearly half of all national health outlays.

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FDA, CDER Weigh Organizational Changes

FDA commissioner Margaret Hamburg has formed a top-level working group to propose strategies for enhancing agency functions and processes, starting with the relationship between FDA Centers and its field force. The Program Alignment Group (PAG), announced Sept. 6, 2013, will seek to clarify the roles and responsibilities of product centers and the Office of Regulatory Affairs (ORA) to more effectively align practices, processes, and resources. The panel includes the deputy commissioners for food and veterinary medicine, for global regulatory operations and policy, plus the heads of ORA and all Centers to better coordinate inspection and oversight policies and programs throughout the agency.

Key issues are whether more specialization in FDA inspection and compliance functions would be beneficial, and how risk-based models and performance metrics may improve oversight and compliance outcomes. The agency also is looking for ways to achieve more efficient laboratory operations and to coordinate training for ORA and Center staffs.

Hamburg further explained at a conference on biomedical research the next week that her reorganization effort reflects the impact of a more globalized world for medical product development and production. Historically, ORA has fielded generalists able to inspect and evaluate a broad range of regulated products, but the modern era may require a more specialized regulatory staff. And while these issues have been addressed periodically by FDA Centers, including the Center for Drug Evaluation and Research (CDER), the PAG will seek a more cohesive approach that considers the differences and needs of all regulated product areas.

CDER director Janet Woodcock, who is on the PAG, sees its mission paralleling her initiative to modernize how CDER regulates pharmaceutical quality. Woodcock seeks to establish an Office of Pharmaceutical Quality (OPQ), which similarly would coordinate drug compliance activities with ORA and take steps to clarify roles and responsibilities of CDER offices and to establish metrics and accountability.

At the PDA/FDA joint regulatory conference Sept. 16, Woodcock emphasized that CDER has to change the way it regulates industry to ensure an agile manufacturing sector that can reliably produce quality medicines, with less extensive agency oversight. One innovation would be to reorganize the review of the manufacturing portion of drug applications according to dosage forms and their predictable “failure modes.” Most product recalls, she noted, involve formulation design problems, such as particulates in parenterals and dissolution failures with solid oral products. This approach will involve setting clinically relative specifications and identifying what changes raise risks for drug safety and efficacy – and what do not.

The PAG is slated to give Hamburg an initial plan for operational changes by early December. And CDER hopes that OPQ will become a reality early next year, said Keith Webber, acting director of CDER’s Office of Pharmaceutical Science, at the PDA conference. The reorganization process is slow, as CDER’s OPQ proposal requires approval by HHS officials and has to be vetted by the Office of Management and Budget; some members of Congress also may want to review how the changes could affect drug shortages and patient access to medicines.

True Pharma Innovation Lies in Quality, not Quantity, of Approvals, say FDA Analysts

We’re already embroiled in the annual speculation game about whether FDA approvals this year will keep pace with last year’s near-record of 39 new molecular entities (NMEs) brought to market. The tally is closely watched as a sign of the state of biopharmaceutical innovation and the health of the pharmaceutical industry and biomedical research enterprise.

But this focus on the quantity of new drug approvals is misleading, according to FDA analysts, because it fails to distinguish between truly innovative new therapies and those that are similar to medicines already on the market, explains Mike Lanthier, operations research analyst on the economics staff of FDA’s Office of Planning. While all NMEs offer some therapeutic advantage, those that are “first-in-class” and “advance-in-class” medicines represent important advances, he explains. Alternatively, “addition-to-class” therapies may provide useful options for patients, but not substantial advances over existing products. And it is this last category that has experienced the much-hyped decline in approvals in recent years, while more vital therapies are holding steady or increasing in number, Lanthier points out in an FDA Voice blog posted Aug. 6, 2013. This “more nuanced and informative” assessment of NME categories thus refutes fears of an “innovation gap” that threatens drug discovery.

One factor may be a rise in small biopharma companies developing more innovative drugs, while large drug companies have focused on refining blockbuster drugs for large patient populations. NMEs from small companies have increased notably since 1996 and now account for 50% of approvals, compared to roughly one-third in the past, Lanthier and colleagues explain more fully in an article in the August 2013 issue of Health Affairs.

FDA initiatives also may support these developments. Most innovative NMEs have benefited from priority review treatment, and the new breakthrough drug program and added incentives for new antibiotics and pediatric treatments promise to expedite the development of innovative therapies. It’s also possible, the authors say, that the increased influence of large pharmacy benefit management firms reduces reimbursement for pricey drugs that lack proven benefits.

Another measure of biopharma innovation may be the number of new drug applications filed with FDA, although the quantity-over-quality measure also may apply here.

Court Ruling Threatens Drug Shortage Remedy

The Food and Drug Administration may no longer be able to alleviate shortages in vital drugs by permitting the import of unapproved medicines following a decision by the US Court of Appeals for the District of Columbia. The ruling of July 23, 2013 also raises broader questions about when and how FDA can “exercise regulatory discretion” in deciding certain policy and enforcement issues.

According to a unanimous decision by a three-judge panel, FDA’s action to permit import of thiopental from an unregistered foreign establishment was “not in accordance with law,” even though the aim was to address the shortage of a needed medicine. The ruling in Cook et al v. FDA (case No. 12-5176), which upholds a previous decision by a federal district court, involves a shortage of thiopental sodium, which created serious problems for state law enforcement officials seeking to use it in delivering lethal injections. A group of death row inmates from three states filed suit, claiming that FDA violated the law by improperly allowing shipments of a misbranded and unapproved new drug to enter the United States..

The Appeals Court specifically rejected FDA’s argument that it can legally address drug shortages by permitting the import of drugs approved by other regulatory authorities. Among its various tools for combating serious short supply situations, FDA also cites authority to allow distribution of a product suffering from quality problems, but found by the agency to “not cause undue risk to patients.” Other FDA relief strategies are to work with sponsors to resolve manufacturing issues, expedite inspections and reviews of short supply products, identify additional manufacturers willing to initiate or increase production, extend product expiration dates, and help firms qualify new sources of raw materials.

FDA has permitted unapproved imports 17 times in recent years, according to its announcement in May on authorizing the import of injectable total parenteral nutrition (TPN) solutions. These products are desperately needed by hospitals to treat premature infants who are unable to eat or drink, as well as cancer patients undergoing gastrointestinal surgeries. In this case, FDA authorized Fresenius Kabi USA to import TPN products from its Norway plant. The agency took this step after American Regent/Luitpold shut down operations at the end of 2012 to address quality issues that left particulate matter in injectable products. In this and other cases, FDA says that it evaluates the overseas drug to ensure that it is of adequate quality and informs doctors of the status of the imported product.

The July Appeals court ruling is regarded as a victory for death penalty opponents, who had pressured other manufacturers to discontinue production of thiopental and other “death drugs.” Yet state officials had urged FDA to appeal last year’s district court ruling in order to obtain needed supplies to carry out executions according to law. In that earlier lower decision, the judge accused FDA of hypocrisy, pointing out that the agency prevents consumers from purchasing medicines over the Internet because it deems the products misbranded and unapproved. The Appeals Court agreed, noting that FDA can address specific shortages through other strategies, such as designating an unapproved foreign drug as investigational to allow its importation.

This legal challenge to FDA use of enforcement discretion also could provide support for K-V Pharmaceuticals, which is challenging FDA’s failure to block competitors from producing the pre-term birth drug Makena (hydroxyprogesterone caproate injection). In this case, explains attorney Kurt Karst of Hyman, Phelps & McNamara, the D.C. District Court has sided with FDA, stating that the agency has the right to refuse to take action to stop pharmacy compounding of the drug. Kurt speculates in the FDA Law Blog that the recent Cook case will have a “huge effect” on how it deals with drug shortages [see www.fdalawblog.net July 23, 2013].

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