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].

Drug Development: To Sue or Not to sue?

Guest blog written by Dr Nicholas Jones, partner and patent attorney at Withers & Rogers LLP.

While it may not happen often, clinical trials can sometimes be halted by patent disputes, leading to costly delays in bringing new drugs to market. At last, the UK Government has decided to do something about this in a bid to make UK patent law more consistent with that in some other parts of the world. Read more »

Prepare for Serialization Now

Upcoming requirements in the US and around the world for serialization and track and trace of pharmaceuticals were a focus of the Pharmapack conference held in Philadelphia, PA earlier this week. Momentum toward implementing these technologies across packaging lines is building as deadlines, including California’s requirements in 2015 and others around the world, approach. After listening to several presentations and a panel discussion, the message I heard loud and clear was that time is of the essence and that packagers should prepare for serialization now. Read more »

Patent Settlements Become More Risky

Pharmaceutical companies can anticipate more costly, drawn-out patent litigation in the wake of the June 17 US Supreme Court decision, which creates great uncertainty about the grounds for negotiating settlements in patent cases. In ruling that “pay-for-delay” arrangements could violate the antitrust laws, and that the Federal Trade Commission (FTC) has the right to challenge these deals, the majority undermined years of patent case law and sent the issue back to the lower courts to decide.

The decision was not a complete victory for the FTC, in that it stopped short of declaring reverse payment agreements as per se illegal. Instead, the Justices instructed the lower courts to apply a “rule of reason” to these cases, and not the “quick look” approach employed by the Circuit Court case under review.

The ruling in FTC v. Actavis supports the long-held contention of FTC officials and consumer activists that brand-generic patent settlements maintain market exclusivity for brand name drugs, reducing competition and raising costs for consumers and health care systems. Both innovator and generic firms have insisted that these settlements actually permit generic products to come to market earlier than under costly, drawn-out court battles over patent rights. That argument was supported in an April 2012 ruling from the US Court of Appeals, which found that an arrangement that allows generic competition earlier than patent expiration did not violate antitrust laws. The dissenting opinion from Chief Justice John Roberts, which was joined by Justices Antonin Scalia and Clarence Thomas, echoes the earlier Court ruling and also raises concerns about linking antitrust law and patent issues and weakening patent protections for innovators.

However, a 5-3 majority led by Justice Stephen Breyer held that the FTC and other government and private parties have the right to pursue reverse payment arrangements as violations of antitrust laws. Breyer, joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan, expressed concerns that reverse payment settlements have an adverse effect on competition. At the same time, though, the majority failed to provide guidance on how to structure patent settlements so that they do comply with antitrust policy.

The ruling is expected to encourage the private plaintiffs’ bar to bring new lawsuits challenging brand-generic patent settlements of all kinds, setting the stage for years of uncertainty in challenging and defending patents on all sides. “It’s going to be a nightmare,” predicted Arent Fox attorney Wayne Matelski, as District Courts struggle to decide what “rule of reason” means in these complex cases.

While companies may be more reluctant to settle future lawsuits, they may face legal challenges to earlier settlements, and new arguments against cases currently before the courts. More plaintiffs may enter the fray, as seen in recent actions by chain drugstores. These cases will require decisions from judges on whether a settlement is illegal primarily due to the size of a reverse payment, or to other services and arrangements with a generic firm. The courts also will have to weigh the strength of a patent and the merits of a patent suit and what extraneous financial factors might lead a generic competitor to seek a settlement.

Although the FTC claimed the ruling a “significant victory,” many legal authorities questioned whether the decision would promote competition and lower drug costs. It remains to be seen if generic drug makers will become more aggressive in challenging patents in order to speed copycat products to market, or if brand firms become more determined to protect intellectual property rights, despite the high cost of litigation.

Congress gets off the hook, for now, as it’s likely to drop efforts to enact FTC-backed legislation to limit reverse-payment settlements. Yet, the issue could end up before the Supreme Court again if lower courts continue to produce divergent rulings on these cases, as they have done over the last decade.

Praise and Perils for Biotechnology Patent Policy

The Supreme Court decision blocking patents on naturally-occurring genes has generated predictions of doom for biotech innovation, along with expectations of more healthy competition in discovering new treatments and diagnostics. Although some commentators regarded the decision, Association for Molecular Pathology v. Myriad Genetics, as a “major reversal” in longstanding patent policy, many leaders of the biopharmaceutical research community described the ruling as likely to spur innovation and the development of therapies and companion diagnostics necessary for advances in personalized medicine.

All sides had legitimate reasons to claim victory:  patient and research groups anticipated easier access to more effective and efficient tests and therapies; biotech companies were relieved that the Justices did not invalidate ancillary patents surrounding genetic discoveries. A number of testing firms announced plans to develop newer, better, less costly tests using the BRCA genetic mutations. Myriad Genetics said its test for breast cancer would remain a leading option for patients and that it would continue its R&D program based on hundreds of other patents.

The ultimate outcome remains to be seen.  The U.S. Patent & Trademark Office (PTO) is expected to revise practices for granting patents for isolated DNA, although the court specifically permits protection for companies that modify genetic material or create new products based on human genes. But in upholding patents on complementary, or cDNA, the Court left the door open to further debate and legal battles over just what genetic manipulations qualify for patent protection.

Yet, there is reason to hope that the unanimous, non-partisan Court ruling will help clarify patent policy related to biotechnology, a subject that remains tangled up in multiple legal cases and legislative proposals.  And the non-political nature of this fairly technical ruling should provide grounds for optimism that the system can address some issues on the legal merits of the case.

Risk-Mitigation Strategies in Drug Manufacturing for Emerging Markets

Patricia Van Arnum PharmTech editorRisk and reward. It is a balance that has to be achieved in any business endeavor and is of utmost importance for pharmaceutical and biopharmaceutical companies managing their growth and manufacturing in emerging markets. Emerging markets are a crucial part of pharmaceutical companies’ growth strategies, but in serving those markets, pharmaceutical and biopharmaceutical manufacturers must align that strategy with partners that can facilitate access to local markets, manage complex supply chains, meet global and national regulatory standards for quality, and secure production for local as well as established markets in North America and Western Europe. Read more »

Quality Focus: Ensuring Raw Material Transparency

Patricia Van Arnum PharmTech editor Quality is of utmost importance in drug development and manufacturing. The increased globalization of the pharmaceutical and biopharmaceutical industries, resulting in more complex and elongated supply chains on a raw material and ingredients basis, obligates suppliers and pharmaceutical and biopharmaceutical companies to develop ways to achieve greater transparency and understanding of those supply chains to ensure product quality and regulatory compliance.  Read more »

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 »

Key Ways for Ensuring Global Regulatory Compliance

Patricia Van Arnum PharmTech editor International markets play an important role in pharmaceutical and biopharmaceutical companies’ growth strategies, and it is crucial that companies meet the challenge of global regulatory compliance. Optimizing a quality management system to ensure regulatory and corporate compliance for product registrations for new and existing drugs in new geographic markets is essential for commercial success. Pharmaceutical Technology will examine the operational, organizational, and technological-based requirements on how to reduce risk and achieve operational efficiency for global product registrations in a live webcast on Tuesday June 11 from 2:00 to 3:00 PM EST. Read more »

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