Under a user-fee program, industry agrees to pay fees to help fund a portion of the FDA’s drug-review activities while the FDA agrees to overall performance goals, such as reviewing a certain percentage of applications within a particular timeframe. The proposed user-fee programs for generic drugs and biosimilars are modeled on the PDUFA program. PDUFA was created by Congress in 1992 and must be reauthorized every five years. The current program, known as PDUFA IV, will expire on Sept. 30, 2012, unless reauthorized by Congress. FDA’s recommendations for PDUFA V were developed in consultation with drug-industry representatives and with patient and consumer advocates, according to an FDA press release.

The proposed new generic-drug user-fee program would provide the FDA with funding at a time when generic-drug applications are on the rise. FDA receives 800 to 900 new generic-drug-related applications annually, according to the agency. In exchange for fees on facilities and product applications, the proposal includes performance metrics, such as review timeframes and a commitment to achieve parity between surveillance inspections of foreign and domestic establishments by fiscal year 2017. FDA expects that the proposal would effectively eliminate the review backlog and significantly reduce review times.

The Generic Pharmaceutical Association (GPhA) issued its support for a proposed Generic Drug User Fee Act (GDUFA) and FDA’s recommendations for a generic-drug user-fee program. “This is an important landmark that could not have been achieved without the extraordinary efforts of the FDA, my colleagues in the generic industry, and all other stakeholders,” said Ralph G. Neas, President and CEO of GPhA, in a Jan. 13, 2012, GPhA statement. “We now look forward to working with members of Congress in the weeks and months ahead to ensure that the final program is one that expedites access to low-cost, high-quality generic drugs for Americans and further safeguards the quality and accessibility of our nation’s drug supply.”

GDUFA calls for the generic-drug industry to pay $299 million annually in user fees for the next five years, beginning Oct. 1, 2012. This funding is supplemental to what Congress appropriates to FDA each year and will enable  FDA’s Office of Generic Drugs to hire the scientific resources needed to provide timely approval of generic medicines, according to GPhA. The new fees also will boost spending for generic-drug manufacturer facility inspections, which are required before new generic drugs can be approved.

The proposed Biosimilar and Interchangeable Products User Fee program is intended for products approved under a new abbreviated approval pathway for biological products shown to be biosimilar to or interchangeable with an FDA-licensed biological product. The Affordable Care Act of 2010 contains a subtitle called the Biologics Price Competition and Innovation Act of 2009, which established this pathway. The recommended user-fee program for biosimilars includes fees for products in development to generate revenue in the near term and to provide FDA with the resources needed to support development-phase meetings with sponsors of biosimilar biological product candidates.

The Pharmaceutical Research and Manufacturers of America (PhRMA) supports the premise of a biosimilar user-free program.” We endorse a clear, science-based, separately funded regulatory program for biosimilars that is supported by a mix of appropriations dollars and user fees,” said a PhRMA Vice-President Sascha Haverfield-Gross in a Dec. 6, 2011, statement.

The Biotechnology Industry Organization (BIO) did not comment on the proposed generic-drug and biosimilar user-fee programs, but offered its support for the reauthorization of PDUFA. “BIO strongly supports the PDUFA V recommendations as they will enhance the drug-development and review process through increased transparency and scientific dialogue, advance regulatory science, and strengthen postmarket surveillance,” said BIO president and CEO Jim Greenwood, in a Jan. 13, 2012, statement. “Most importantly, PDUFA V will provide patients and doctors with earlier access to innovative new therapies.”

Congress will take up the issue of user fees in a series of Congressional hearings, scheduled for next month. The House Energy and Commerce Health Subcommittee will hold hearings on Feb. 1, 2012, on PDUFA reauthorization and on Feb. 7, 2012, on the proposed generic-drug user fee and biosimilar user-fee programs. Senators Tom Harkin (D-IA) and Mike Enzi (R-WY), the chairman and ranking member of the Senate Committee on Health, Education, Labor and Pensions (HELP), offered their support for the PDUFA reauthorization and the proposed generic-drug and biosimilar user fee programs. “These user fee agreements are crucial to ensuring that medications become available to the American public quickly and safely,” said the senators in joint Jan. 13, 2012, statement. “We applaud the FDA and the industries for the dedication and hard work it took to finalize these agreements.” During the past several months, the HELP Committee has convened a series of hearings to explore issues related to the user-fee legislation.

With strong fiscal constraints, the user-fee programs, both the PDUFA reauthorization and user-fee programs for generic drugs and biosimilars seem likely. The key item in the coming months is to see if Congress will be able to move forward with the initiatives per FDA’s recommendations.

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Drug companies, including Pfizer, are wooing insured consumers by offering copay coupons, which reduce the amount of money that the latter must spend for a branded drug. These coupons are intended to discourage a patient from switching to a generic therapy. To redeem the coupons, consumers often must submit personal information that allows the firms to promote products to individual patients.

The coupons may help consumers, but they oblige plan sponsors, such as employers or state governments, to pay high prices for branded drugs when generic alternatives are available. Drug companies can prevent plan sponsors from knowing when enrollees have redeemed the coupons by processing them through a “shadow claims system,” according to a statement from the Pharmaceutical Care Management Association. Copay coupons will increase costs for these sponsors by $32 billion over the next decade, according to research from Visante.

At a time when state governments and private companies are pinching pennies, it’s hard to believe that they will allow drug companies to use these tactics for very long. Arrangements such as Pfizer’s agreement to manufacture generic Lipitor for Watson, in exchange for a share of net sales, seem comparatively more benign. Deals like this don’t appear to constrain patients’ choice or force payors to spend more than necessary for a given drug. They might be the “least bad” option for drugmakers without new blockbusters on the horizon.

Statistics are currently available for January–September 2011. So far, the EMA has issued 74 positive opinions on marketing authorisation applications. Overall, the agency has started 76 marketing authorisation applications and finalised a further 79. So, what kind of picture do these statistics paint? Quite a bright one, actually, particularly in comparison to the bleakness of 2010 when the EMA issued only 51 positive opinions for marketing authorisation applications.

2011’s number of finalised marketing authorisation applications (79) has overtaken 2010’s low figure of 54; indeed, the year has also beaten 2008’s 72 finalised applications. However, there’s still a long way to go to outdo 2009’s 125 finalised applications, which were partly driven by a high number of applications (51) for generic products. This year, there has once again been a considerable number of marketing authorisation applications for generic products, with 28 finalised compared with only 20 in 2008.

There has also been a noticeable increase in the number of applications for new products, which is positive considering the amount of criticism that has been directed at the pharma industry’s innovative pipeline. So far, the agency has finalised 32 applications for new drugs compared with just 21 last year. New orphan medicinal products are also on the rise: 11 applications have already been finalised this year compared with six in 2010.

For started marketing authorisation applications, it’s a little different: 76 started applications in 2011 compared with 90 in 2010. Breaking down the numbers, however, the EMA starts roughly 8 applications per month, so the total could theoretically rise to 100 or more. We’ll have to wait until the end of the year to find out. Importantly, however, the number of started applications for new products is high at 36 applications compared with 2010’s 34.

There’s still a long way to go before anyone can safely say that the innovation drought is over, but given that the US has also seen greater drug approval rates this year compared with last, perhaps 2011 marks an important step towards this goal.

Related articles

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Is pharma’s innovation slump over?

Understanding critical quality attributes will help Pfizer develop robust design spaces and, ultimately, achieve real-time release, said Gerry Migliaccio, senior vice-president of network performance for Pfizer Global Supply, according to In-Pharma Technologist. Migliaccio made his remarks at a meeting of FDA’s Advisory Committee for Pharmaceutical Science and Clinical Pharmacology. Using QbD as a basis, and process analytical technology to establish manufacturing controls, Pfizer believes it will be able to reduce quality-control costs, achieve real-time release, and quickly get a return on its investment.

But not all companies are rushing to adopt QbD. Manufacturers of small-molecule generic drugs fear that spending the extra initial time and effort to adopt QbD could prevent them from being the first to file an application for their products. “If you’re not first to file, you may as well be last,” said Yatindra Joshi, vice-president of generics R&D for Teva, at the same FDA meeting. Consequently, some generic-drug manufacturers aren’t willing to gamble that the benefits of QbD will outweigh the profits lost by not being first to file.

If Pfizer and other heavyweights adopt QbD, it could boost patients’ confidence in the safety and efficacy of marketed drugs. But patients would benefit even more if generic-drug manufacturers felt freer to pursue this initiative. By making some elements of QbD mandatory in filings, FDA could “level the playing field,” said Joshi. This idea seems like one plausible solution that could be of advantage to the industry and consumers alike.

For FDA’s evaluation of the QbD program so far, please watch for Pharmaceutical Technology’s September issue, in which CDER’s Helen Winkle and Moheb Nasr analyze the initiative’s present and future.

EMA published guidelines for follow-on biologics in 2005, and FDA has been studying its peer’s approach. So far it appears that FDA will follow EMA’s strategy of taking a product-specific approach to approving follow-on biologics. “Given the complex nature of biologics, it’s unlikely that a ‘one size fits all’ systematic assessment of biosimilarity can be developed,” wrote Janet Woodcock, director of the Center for Drug Evaluation and Research, and her colleagues in The New England Journal of Medicine. The agency will likely examine not only the manufacturing process for the therapies, but also the populations for whom the drugs are intended.

Companies that hope to enter this potentially lucrative market have argued that analytical characterization methods have improved to the point where they can establish similarity between a branded and a follow-on product. Some firms have argued that these methods could reduce the need for clinical trials. But FDA does not seem convinced that characterization methods have advanced far enough. Rather, “additional animal and clinical studies will generally be needed for protein biosimilars for the foreseeable future,” they wrote in the article, but “the scope and extent of such studies may be reduced further if more extensive fingerprint-like characterization is used.”

Ultimately, we won’t be able to predict the shape of the follow-on biologics industry in the US until FDA publishes its final guidance. Large-molecule therapies are more complex than small-molecule products, and it remains to be seen how burdensome the agency’s approval requirements will appear to the industry. Firms will have to weigh regulatory costs against the potential future profits before taking the plunge into this new market.

It’s crunch time on Capitol Hill. Before Congress will consider raising the debt ceiling by next week’s deadline, they have insisted on achieving a budget deal that will reduce the federal debt over the long term. Tensions have mounted as President Obama and leading lawmakers have taken turns grandstanding and negotiating. Both parties agree that spending cuts should be part of the budget deal, and some Democrats have expressed willingness to find opportunities for savings in Medicare and Medicaid. But these programs might now be spending less money if one bill on the Senate’s calendar had passed when it was originally introduced.

The bill is the “Preserve Access to Affordable Generics Act,” which would prohibit pharmaceutical companies from paying makers of generic drugs to delay the introduction of their products. The bill describes pay-for-delay settlements as anticompetitive agreements that harm consumers, echoing the words of the Federal Trade Commission (FTC) and 32 state attorneys general. By banning pay-for-delay deals, the act could save consumers, including taxpayers, $3.5 billion per year, said FTC Chairman Jon Leibowitz in a press release.

In 2005, several court decisions permitted these agreements, which postpone the market entry of generic drugs by an average of 17 months longer than settlements that do not include a payment, according to FTC. In response to these decisions, Senator Herb Kohl (D-WI) introduced the act in February 2009.

The Generic Pharmaceutical Association (GPhA) has been a consistent critic of the act ever since. Last week, GPhA said in a press release that pay-for-delay settlements were good for consumers. The group also implied that prohibiting these agreements would hinder the use of safe and affordable medications. But if pay-for-delay deals postpone the market introduction of generic drugs longer than other settlements do, this assertion seems hard justify.

At a time when financial constraints are affecting consumers and the federal government alike, I think Senator Kohl’s bill deserves serious consideration. It is designed to ensure that cost-saving generic drugs are available sooner rather than later, and it would allow companies to present evidence that their agreements are not anticompetitive. In my view, the “Preserve Access to Affordable Generics Act” would ease consumers’ economic concerns without inflicting damage on the pharmaceutical industry.

The case began after several patients took a generic version of metoclopramide for stomach ailments and ultimately developed tardive dyskinesia, a serious neurological disease. As required under federal law, the label for the generic product was the same as that for the branded drug, which was no longer available. But the plaintiffs alleged that the manufacturer of the generic drug had evidence about the product’s potential side effects and failed to alert FDA about them as state law required.

In his majority opinion, Justice Thomas ruled that federal law pre-empts the plaintiffs’ suit. A company cannot comply both with federal law, which requires manufacturers to use the same warning label as that for the branded product, and with a state law that requires them to change the warning label when evidence supports it, he held. In such an instance, federal law prevails over state law. Yet Thomas conceded that if the generic-drug manufacturers had asked FDA for help in changing the corresponding brand-name label, they might have been able to accomplish under federal law what state law required.

In her dissent, Justice Sotomayor wrote that FDA requires generic-drug firms to propose label changes when they believe that a label is inadequate. But the defendants (Actavis and Pliva) made no such proposals. Generic-drug manufacturers might sometimes be able to prove that it would be impossible for them to comply with federal and state laws regarding labeling, wrote Sotomayor. But the defendants showed “only that they might have been unable to comply with both federal law and their state-law duties to warn” the plaintiffs about side effects [emphasis mine].

“As a result of today’s decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug,” wrote Sotomayor. Given that more and more prescriptions are being filled with generic drugs, this conclusion is distinctly troubling.

In light of the Court’s decision, we may need to re-evaluate the process for changing drug labels to ensure that it is sound and reasoned without being onerous. Most importantly, we need to protect patients’ right to seek redress if any manufacturer has failed in its obligation to provide adequate warnings about potential side effects.

But when Committee Chair Representative Darrell Issa (R-CA) recently visited Maridalia Torres, FDA’s Puerto Rico district director, he learned that neither she nor her staff had visited the McNeil facilities since the time of the hearings. What’s more, Torres had not evaluated McNeil’s corrective actions, but had relied on a third-party compliance officer—hired by McNeil—for information. In a letter to FDA Commissioner Margaret Hamburg, Rep. Issa asked whether FDA had taken any disciplinary actions against its Puerto Rico employees.

Last week, Senators Charles Grassley (R-IA) and Max Baucus (D-MT) expressed concerns about the way FDA oversees the citizen-petition process. As the agency was considering the approval of generic alternatives to Sanofi’s Lovenox blood thinner, it reviewed letters from a professor and two medical groups requesting that approval be delayed. At Congress’s request, Sanofi produced documents revealing that it had encouraged the groups to write to FDA. The company paid the two groups more than two million dollars each, and paid the doctor more than $200,000. None of these three parties revealed their financial relationship with Sanofi to FDA in their letters. And FDA apparently did not ask.

In their letter, the senators warned that abuse of the citizen-petition process could delay patient access to “potentially affordable, safe, and effective generic alternatives.” The lawmakers asked what steps FDA had taken to ensure that the process was transparent.

No government agency is perfect, and FDA does suffer from a chronic shortage of resources. But if FDA is at fault in these two incidents, it is because of a lack of diligence rather than a lack of funds. Patients, whose lives are at stake, need the agency’s protection. I hope FDA rises to the challenge of Congress’s tough questions.

They’re likely to pursue acquisitions, thus continuing the trend of the past few years. The burgeoning biopharmaceutical industry shows potential for yet more growth, making those companies tempting targets for small-molecule manufacturers. In public, pharmaceutical executives describe modest acquisition goals, sometimes mentioning price tags of $5 billion or less.

But David Snow, chief executive of Medco Health Solutions, doesn’t take these statements at face value. Any biotechnology manufacturer—even heavyweights like Biogen Idec and Amgen—could be a takeover target, he told the Reuters Health Summit. “You have to become awfully large to be unaffordable—there’s lots of cash, lots of capital out there for acquisitions,” he said, according to Reuters. Drugmakers who are still flush might see biopharmaceutical acquisitions as a safe path through rough seas.

Not so fast. Regulatory approval for these mergers might soon become tougher to obtain. Late last week, Senator Herb Kohl (D-WI) asked the Federal Trade Commission to examine pharmaceutical-industry mergers with care, lest they exacerbate the problem of drug shortages. “[F]ewer drug companies competing in a therapeutic class may lead to fewer prescription drugs being developed and sold within that class,” said Kohl, citing a study by the Government Accountability Office.

He also quoted a Washington Post article on the same topic. A smaller pool of drugmakers means “that when raw material runs short, equipment breaks down, or government regulators crack down, the snags can quickly spiral into shortages,” said the article. Patients would certainly be in trouble if mergers slowed innovation and made drugs harder to get.

So how will drugmakers stay afloat during these turbulent times? They might well need the cunning of Odysseus.

The findings come from a report by the IMS Health Institute for Healthcare Informatics, which examines the global use of medicines through to 2015. There’s a lot of interesting data in the report — far too much to cover in a single blog! As a result, I’ll be looking at the report in a lot more detail in the July issue of Pharmaceutical Technology Europe. For now, I’ll just look at some of the main trends that have been identified.

In general, IMS Health expects medicines spending to reflect a slowing compound annual growth rate of 3–6% over the next five years, compared with the 6.2% that has been seen during the last five years. In a press statement, however, Murray Aitken, executive director of the IMA Health Institute for Healthcare Informatics, added that the exact spending and growth levels for 2015 are hard to predict. “Past patterns of spending offer few clues about the level of expected growth through 2015. There are unprecedented dynamics at play, which are driving rapid shifts in the mix of spending by patients and payers between branded products and generics, and across both developed and pharmerging markets.”

One of the main dynamics that IMS has identified is a move away from branded products as cheaper generic versions become available — particularly in the developed markets where patent expiries are forecast to provide payers with net savings close to $100 billion through 2015. Among the developed markets, the US is predicted to experience the largest increase in generic spending. In the emerging markets, the growth of branded products is expected to be robust as medicines expenditure reaches $285–315 billion (compared with $151 billion in 2010), but the majority of medicines spend will likely still be on generics.

Interestingly, although the use of generics is on the rise, the same cannot be said for their biologic counterparts: biosimilars. Such products are evolving rapidly and a number of new biosimilars are expected to be introduced by 2014. By 2015, however, IMS Health expects that only about 1% of total global expenditure on biologics will be attributable to biosimilars.