“Reflections By a Guy Who is Headed Out of Town”: The Bush Legacy for Biopharma

When we got our “exclusive” invitation to cover President Bush discussing his legacy in domestic policy from the American Enterprise Institute, we were flattered that the White House has finally recognized the importance of the IN VIVO Blog in the world. Sam Donaldson, Ted Koppel and Wolf Blitzer—who cares what they think. Its about time they started courting the real thought leaders in Washington.

Sure, our skeptical colleagues in the Fourth Estate may have suggested alternative theories. Like: “It’s tough getting any press to cover a lame duck President, especially one this unpopular.” Or “Everyone who matters is in Chicago for the Obama press conference.” Or “I knew FDC-Windhover’s strict no-shoe-tossing policy would pay off.” Or “Is he still President?”

But we weren’t about to let envious colleagues stop us from answering the call of our President. So we set off to the Mayflower hotel downtown, allowed a very polite Secret Service agent to pat us down while a German Shepherd sniffed our laptop bag (thank goodness it wasn’t the other way around!) and dutifully took our seats to hear what lessons the President has learned that would be of interest to our loyal biopharma readers.

After all—all kidding aside—President Bush’s legacy includes signing the two most important laws affecting the pharmaceutical industry in a generation: The FDA Amendments Act of 2007 and the Medicare Modernization Act of 2003.

Not surprisingly, Bush didn’t say a word about the more recent bill. FDAAA was never embraced by the administration, since it was ultimately packaged by Congress as a rebuke to the management of FDA under Bush. But it signals nothing less than a new era in drug regulation, and that alone will ensure that the Bush legacy matters for years to come.

The President did discuss the Medicare law, and especially the Part D prescription drug benefit that was its centerpiece. Bush’s reflections on the legislative debate and its ultimate outcome underscore why many in the biopharma sector will miss him when he’s gone—and why even some who won’t may ultimately owe him a huge debt of gratitude during the upcoming healthcare debate.

Bush explicitly declined to offer advice or policy prescriptions for the incoming administration, joking that his appearance was nothing more than “reflections by a guy who is headed out of town.”

But his analysis of the key lessons of Part D—as an alternative to price controls, as an endorsement of market-based health care, as proof of the power of competition, choice and consumerism in health care—has obvious resonance for the upcoming health care reform debate. (You can read more about Bush’s thoughts on Part D in “The Pink Sheet” DAILY, and on how Part D may play in the health care reform debate in an upcoming issue of The RPM Report.)

There were plenty of other things Bush said that resonate as well, things that weren’t explicitly relevant to biopharma companies—but easily could have been.

Such as:

“No matter how tough the issue might look, if we require a solution, go after it. The job of the President is to tackle the problem.” (On immigration reform, not health care reform…)

“These aren’t normal circumstances. That’s the problem.” (On the financial bailout, not biotech financing...)

“It is going to be harder to attract good people to government service if their
integrity is challenged at every level.” (On judicial nominees, not FDA Commissioner Andy von Eschenbach....)

“Technology will help change our habits.” (On hybrid cars, not personalized medicine....)

“Part of the problem is…that the regulatory scheme is such that people would risk a lot of capital and then have to seek permission for final approval late in the process
and would find themselves tied up.” (On nuclear power plants, not drug approvals…)

Waiting on Prasugrel: No News is Good News

Another NDA, another missed deadline.

This time around, it’s a product upon which Eli Lilly has hung much of its future, the anti-clotting drug prasugrel (Effient).

Lilly has already been on a rollercoaster ride on Wall Street over prasugrel once the risks associated with the drug surfaced (32% increased chance of bleeding). And time is not on Lilly’s side: the company is racing to establish the drug on the market before 2011, when Plavix generics will complicate the anti-clotting landscape.

Prasugrel has also been closely watched as another sign of how FDA will use its new risk management authorities under the FDA Amendments Act. The billion-dollar questions: would FDA agree that the bleeding risk associated with prasugrel could be appropriately managed by a REMS, or is more needed for approval? And is there any chance for a relatively clean label?

All that makes prasugrel the closest-watched drug approval this year. Indeed, between the September 26 prasugrel user fee deadline and the Wall Street bailout agreement, there were more than a few investors who were constantly refreshing their computer screens as Friday wore on.

While a bailout deal may be at hand, we’ll have to wait a little longer to find out about the fate of prasugrel. For now, Lilly’s not talking, except to say—in a press release that crossed the wires at 5 pm on Friday—that FDA would miss the deadline, that the review is “very far along,” and that Lilly “remains optimistic” that an approval is imminent.

Wall Street’s immediate reaction was not positive—the announcement drove Lilly shares down 3.9% to $45.01 in after-hours trading, and shares opened lower this morning. Les Funtleyder at Miller Tabak expressed his frustration in a research note: “This has become a bit of an unsettling trend at the FDA. The decision tree used to be pass or fail, now there is a third column, the ‘I don't know.’” (Hat tip to CNBC).

We think that pessimism is misplaced.

We told you three months ago why we think FDA will approve prasugrel, and that reasoning hasn’t changed. Indeed, the fact that the agency missed the user fee deadline bodes even better for the drug’s prospects, because it indicates—barring any last-minute surprises—that an approval is close at hand.

Here’s why: Since FDA’s drug review divisions were given the green light to start missing deadlines, most of the applications delayed by workload issues were eventually approved within weeks, based on a recent analysis in The RPM Report. (If you don’t already subscribe, you can sign up for a 30-day trial to access the story.)

For one recent example, look no further than Amgen’s Nplate, which cleared FDA a little over two months after the user fee deadline. GlaxoSmithKline’s Entereg was approved 10 days late. UCB Pharma’s Cimzia was three weeks late. And there are other examples of how small allowances for heavier workloads at FDA have led to product approvals.

There are many reasons for a missed deadline, and some (like finding enough members to staff an advisory committee) have led to months-long delays for new products. But that’s doesn’t appear to be the case with prasugrel: “This is a very large, complex submission, and it should not be surprising that delays occur,” Lilly said.

Given the much-ballyhooed size of that NDA package, perhaps it’s not surprising that it would take FDA extra (and then some more) time to read through it. The absence of an advisory committee meeting for prasugrel is also a positive sign, given that drugs without one have a greater chance for a first cycle reviews.

Sanford Bernstein analyst Tim Anderson agrees that no news is good news: “Our best guess at this point is that while the Effient review is not yet complete, a final decision by FDA is not likely to require that LLY/Daiichi-Sankyo generate new clinical data; the issue may be a smaller one like finessing the label, the risk management plan, etc.”

We couldn’t agree more.

FDA's Brain Drain Continues

Sometimes it just doesn’t pay to work at FDA.

Even as FDA bulks up its drug review ranks with new money from Congress, attrition continues to affect the agency—including high-level defections to industry. Indeed, drug sponsors are more than willing to bring former agency officials into their ranks and pay them much more than the average government salary.

Florence Houn is the latest to jump ship; as reported in “The Pink Sheet” this week, the FDA official has been hired by Celgene as VP-regulatory policy and strategy.

Most recently,Houn was involved in vaccines regulation: she was deputy director of the Center for Biologics Evaluation and Research’s Office of Vaccines Research and Review. But she also knows a thing or two about drug reviews, having served in leadership positions of two different Offices of Drug Evaluation during her 15-year tenure at FDA.

For Celgene, Houn couldn’t come at a better time: the company is working to comply with the Risk Evaluation and Mitigation Strategies provision of the FDA Amendments Act. Celgene is responsible for two of the most restrictive REMS: thalidomide (Thalomid) and lenalidomide (Revlimid), a thalidomide analogue.

In deciding to leave FDA for industry, Houn is taking a page from her husband, former Office of Antimicrobial Drug Products director Mark Goldberger, who left in early 2007 for Abbott Labs. Other recent high-level departures from within the agency include former ODE II director Robert Meyer, who joined Merck in late 2007.

The Office of Drug Safety has probably had the hardest time holding onto talent. Predecessors to current director Gerald Dal Pan left for industry within a year or two of assuming the top drug safety post: Peter Honig to Merck as VP-risk management and Victor Raczkowski to Cephalon as VP-regulatory affairs.

Dal Pan is showing no signs of leaving anytime soon (and given the Office of Drug Safety's new powers and authority, why would he?). But given the monumental changes in drug regulation under the Amendments Act, FDA expertise is surely fetching quite a premium these days. For the agency's sake (and all of industry's), let's hope few other agency officials take advantage of it.

FDAAA Delays: Hurry Up and Wait

If you are going to be late, you might as well be late on everything.

That appears to be the mantra of the Food & Drug Administration these days. After alerting industry earlier this year to the fact that it would start missing approval deadlines, FDA is now warning members of Congress that it will miss implementation deadlines under the FDA Amendments Act.

As reported in "The Pink Sheet" this week, the first anniversary of FDAAA's passage on September 27 comes with it a spate of provisions with deadlines for implementation.

We don't claim to have any insight as to which ones won't happen as planned, but the dozen or so deadlines include one that should be of special interest to the drug industry: the start of the priority review tropical disease voucher system. Others include a report to Congress on best practices for communicating the risk-benefit balance to the public and the development of a post-marketing drug safety website.

So far, we're hearing that Congressional members aren't too concerned about the missed deadlines. Which makes sense, given that FDA hasn't exactly had an on-time record for FDAAA over the past year. For example, the agency is already quite late on a report to Congress on the number of vacancies and disclosures related to advisory committees; it was due February 1.

We find the whole situation a bit ironic, since FDA has been telling sponsors that part of the reason it is missing user fee deadlines is because of all the work it is doing under FDAAA. The news that the agency will miss those deadlines as well seems to illustrate just how severly understaffed FDA actually is.

FDA is staffing up--of the 1,163 or so new employees that the agency will hire before the end of the fiscal year, 1,005 are already on board, and 158 are due to report in by September 28, according to FDA. Another 160 candidates have accepted offers but are still undergoing clearance and related security processes.

But even with all those new hires, FDA still has vacancies: The recent Food & Drug Law Institute advertising and promotions meeting, for example, sounded at times like a government job fair, with officials making a pitch for working at FDA from the podium.

Given the scope of the Amendments Act, perhaps missing deadlines was inevitable. For sponsors, whether or not FDA sends a report to Congress won't make or break a balance sheet. But it is just another reminder of just how stretched the agency is--and how long it will take before agency operations are back to normal.

Congress Has Lump of Coal for FDA in Funding Bill

Congress finished some important work before leaving town for the holidays, finally enacting new funding legislation for the federal government for fiscal 2008. The bill, signed by President Bush December 26, is critical for the Food & Drug Administration, because it allows the agency to start using the new, higher user fees it was authorized to collect by the drug safety law signed in September.

That means the agency can continue its full-steam ahead approach to implementing the user fee provisions of the FDA Amendments Act—the one piece of the legislation that both FDA and industry share unreserved enthusiasm for.

But the new funding comes with a big hitch: a provision stipulating that FDA cannot transfer any money to its other initial priority in implementing the law: the new Reagan-Udall Foundation, a public-private partnership that is supposed to help FDA develop new scientific tools to enhance its regulatory mission.

That may not sound like much to worry about. The new foundation is broadly supported by industry, which welcomes any opportunity to advance drug development science—but it seems like an afterthought in the context of the big changes in FDA’s regulatory authority over drug safety that are the centerpiece of the new law.

There are, however, very significant implications to the dispute, which could ultimately be critical to determining what role industry will have in the development of a new active surveillance system for pharmaceuticals.

Representative Rosa DeLauro, who chairs the House Agriculture Appropriations Subcommittee that oversees FDA, is concerned that the foundation may be an avenue for the pharmaceutical industry to exert more influence over the agency. She registered her concerns in a letter to FDA November 1.

FDA didn’t help the situation when it selected the board members for the foundation. The agency chose a very distinguished group to oversee the foundation, including former GlaxoSmithKline R&D President Tachi Yamada, who now heads the Gates Foundation’s global health program. On paper, Yamada is a perfect choice—his industry R&D background and current philanthropic position are hard to beat when considering the type of people who should oversee the foundation.

But the timing of the choice was disastrous. FDA announced the board selections on November 15—the same day that the Senate Finance Committee released a report on its investigation of claims that GSK intimidated an academic researcher who questioned the safety profile of Avandia. The report reviews a number of communications between GSK and the researcher, including emails from Yamada, and concludes that “the documents in the Committee’s possession raise serious concerns about the culture of leadership at GSK.”

Given DeLauro’s position that the foundation is an avenue to give industry undue influence over FDA, that made the selection of Yamada seem like a blunder.

Industry should hope that cooler heads prevail, and that DeLauro’s concerns can be assuaged. The Reagan-Udall Foundation should be a positive for drug development, and so pharma wants it to get off the ground.

But it is also the most viable short-cut to getting moving on a new active surveillance system for pharmaceuticals. The new law directs FDA to set up a public-private partnership to help build the database and develop the tools for analyzing signals to make regulatory decisions. The agency is leaning towards giving that mission to the new foundation—McClellan was one of the champions of including the provision in the FDA law in the first place.

Putting the new foundation in charge of developing the active surveillance system would address industry’s biggest concern with the project—whether product sponsors will have an appropriate role in shaping the new system.

That’s where things get really tough. DeLauro is already concerned about industry influence in the foundation. And Chuck Grassley, the ranking Republican on the Senate Finance Committee who oversaw the Avandia report, wants to play a role in shaping how the active surveillance project develops—at least to the extent it involves Medicare claims data. And Grassley’s view is that industry should have no role in analyzing that data.

So the fight over Reagan-Udall is probably just beginning. For industry the stakes may be higher than they seem.