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FDA Gets More Funding

After two years in budget limbo, Congress finally enacted federal spending legislation for fiscal year 2014. In this period of ever-tighter government outlays, the Food and Drug Administration did fairly well in

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gaining additional funds, along with user fee revenues that had been put on hold.

The legislation appropriates $2.552 billion to FDA, an increase of $217 million over actual 2013 funding levels, which were reduced by last year’s budget sequester. Total funding for FDA, including user fees, is $4.4 billion for the current year. In addition, the legislation restores $80 million to the agency, that portion of user fees set aside under sequestration.

The actual appropriations bill is brief and largely authorizes collection of numerous user fees: $760 million in prescription drug

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fees, $306 million for generic drugs, $115 million for medical devices, and $20 million for biosimilars. The latter is important because up until now, the agency did not have access to that portion of fees due up front from sponsors to support the extensive advisory activities involved in helping manufacturers navigate the complex biosimilar development and application process.

Under the new budget, the Center for Drug Evaluation and Research will receive nearly $1.3 billion for its operations and for field force activities related to drugs. The Center

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$338 million. Some of the agency’s added funds will support FDA consolidation at its White Oak campus and help maintain current buildings and facilities.

The Centers for Disease Controls and Prevention (CDC) similarly benefits from a budget increase of about 8 percent. CDC gains added funds to support biodefense programs that combat infectious disease and build national stockpiles of critical medicines.

But the National Institutes of Health (NIH) continues to suffer on the funding front. Congress set the NIH budget at nearly $30 billion, an increase of about $1 billion over its previous level. But the new amount is below the agency’s peak 2010 funding level that exceeded $31 billion. The Senate summary notes that added funding will support NIH’s new BRAIN initiative and research related to Alzheimer’s disease. But with inflation, NIH will be hard-pressed to fund much new research, let alone continue many of the discovery programs underway.

Under pressure to stop the funding logjam, Republicans stepped back from using the budget bill to take major whacks at Obamacare. The legislators pulled $1 billion from a new prevention fund established by the Affordable Care Act to support various health programs, and they cut funding by $10 million to the much criticized Independent Payment Advisory Board (IPAB), which may never become operational. The legislation also retains provisions that ban federal funding of abortions and of creating embryos for research purposes.

The higher budget level for FDA puts the agency in a good position to negotiate the appropriations process for fiscal year 2015, notes

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the Alliance for a Stronger FDA, which has led the fight to bolster FDA’s resources so it can meet its ever-growing mandates and assignments. The late action on the 2014 budget, though, may delay the administration’s 2015 budget roll-out for a month or so.

Most-Read News Stories of 2013

While the Affordable Care Act, Pope Francis, and the government shutdown were top general news stories in 2013, the bio/pharmaceutical industry had its own headlines. Pharmaceutical Technology analyzed the hundreds of news stories published in 2013, and found the top 10 most-read articles, based on reader clicks. To no surprise, the most-read articles reflect major bio/pharmaceutical business announcements and regulatory activity.

Merck Cuts 8,500 Positions, Moves Headquarters

Scientist Jailed for Falsifying Research Data

FDA Lists Guidance Documents Planned for 2013

Ben Venue Laboratories Enters Consent Decree

FDA Releases SUPAC Guidance

AstraZeneca Announces an Additional 2300 Layoffs

Hameln Pharmaceuticals Receives FDA Warning Letter

Novartis Receives FDA Warning Letter for cGMP Violations at Austrian Plant

Pfizer Voluntarily Recalls Levoxyl

AstraZeneca to Cut 1600 Positions in R&D Reorganization

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Where Is the Vaccine for Meningitis B?

The bacterial meningitis outbreak at Princeton University in recent weeks has raised questions about why there is no vaccine in the United States to prevent this deadly disease, when such a therapy is approved in Europe and Australia. The current Princeton health danger prompted the Centers for Disease Control and Prevention (CDC) to request emergency import of the vaccine, and the Food and Drug Administration approved that move, authorizing an investigational new drug application (IND) for Novartis’ Bexsero vaccine. New reports of additional meningitis B cases in California may spark further discussion about ensuring US access to protection against this dangerous infection.

The situation illustrates the complexities of vaccine development, approval and reimbursement at home and abroad. Studies to document vaccine safety usually require testing in thousands of healthy individuals, plus certain high-risk populations. There are four meningitis vaccines licensed in the US, but they protect against four other meningococcal disease strains, and not B, which has proven more difficult to attack.

Moreover, meningitis B is not that prevalent in the US, so Novartis and other vaccine makers have concentrated clinical trials for B preventives in Europe, Australia, and other regions. The resulting study data supported market approval for Bexsero in the European Union in January 2013 and more recently in Australia. More trials have been launched in Latin America and even Canada, but not in the US where Novartis did run a small, early trial on adolescents several years ago. Meningitis is most deadly in infants and very young children, and testing in those populations raises difficult risk-benefit calculations for a relatively uncommon condition.

In April 2011, the FDA advisory committee on vaccines and related biological products discussed the effectiveness of meningococcal vaccines in young children and approaches for demonstrating effectiveness in serogroup B vaccines. Representatives from Novartis and Pfizer made presentations on new but differing approaches for developing effective therapies and new surrogates for demonstrating protection.

Novartis says it is discussing a “pathway to licensure” with FDA and “evaluating its phase 3 plans” for the US and other regions. But market approval of a meningitis B vaccine in the US may take much longer because Novartis and other vaccine makers now appear more interested in developing a combination vaccine that will cover all five meningitis strains.

To some extent, that decision reflects problems with reimbursement for new vaccines, which largely comes from public health agencies. Novartis received a blow in July when the UK’s Joint Committee on Vaccination and Immunisation advised against adding Bexsero to its routine vaccination program. The Committee is reconsidering that recommendation, which was based largely on cost-benefit considerations: whether it is worth the money to vaccinate some 800,000 infants a year when only 1800 cases of the disease are found in children in the UK each year, and there are concerns that the vaccine may be only 73% effective.

These developments have spurred more talk about Novartis selling its vaccine business, which has struggled to be profitable, according to market analysts. Novartis recently announced the sale of its blood transfusion diagnostics unit, which is housed with its vaccines unit.

Researchers and patient advocates for a more effective meningitis vaccine point out that cost-effectiveness studies often fail to assess prevention appropriately. They also fear that a final UK non-coverage decision for Bexsero could discourage vaccine research in general. Coverage certainly would be easier to justify for an all-strain meningitis vaccine, but that may involve years of more testing.

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.

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.

Read more »

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.

Advertising of Prescription Drugs – Keeping it Honest and Balanced

It is well known that the pharmaceutical industry spends billions each year on promoting their products, especially to healthcare professionals. In the US, a significant amount is also spent on direct advertising to consumers. In a report by the FDA on Keeping Drug Advertising Honest and Balanced, Thomas Abrams, director of the Office of Prescription Drug Promotion (OPDP), shares on how the agency “protects consumers from false and misleading ads for prescription drugs that appear on TV, radio, online and in print publications.” Read more »

Daiichi Sankyo Faces Gender Discrimination Lawsuit

Stephanie Sutton Pharm Tech EuropeSix current and former female pharmaceutical sales representatives have filed a $100-million gender discrimination lawsuit against Daiichi Sankyo in a US district court. The company employs around 3000 people in the US. Read more »

Justice Department Steps Up Focus on GMP Violations

Jill Wechsler Washington EditorFederal law enforcers are looking hard at pharmaceutical manufacturers that put consumers at risk by cutting corners on product quality and safety and violating current good manufacturing practices (cGMPs). The Department of Justice (DOJ) is “taking an especially hard look” at situations that compromise drug safety, identity and quality, explained DOJ deputy assistant attorney general Maame Ewusi-Mensah Frimpong at this week’s CBI Compliance Conference in Washington, D.C. Read more »

US Pharma Pricing Top Target for Medicare Cutbacks

Jill Wechsler Washington EditorIn the dog-eat-dog world of federal deficit reduction in the US, there seems to be one health-related spending cut with broad bi-partisan support:  require drug companies to give the federal government “a better deal on medications for low-income people on Medicare.” Nearly 70% of respondents  back this strategy, according to a survey sponsored by the Kaiser Family Foundation (KFF), the Robert Wood Johnson Foundation and the Harvard School of Public Health. That’s far more than the mere 32% who want to raise Medicare premiums or the 26% who support a higher Medicare eligibility age (67, up from 65 years). Read more »

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