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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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March 15, 2012

Not Quite So Accelerated, Says PhRMA

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Posted by Derek

We've spent a lot of time here talking about provisional approval of drugs, most specifically Avastin (when its approval for metastatic breast cancer was pulled). But the idea isn't to put drugs on the market that have to be taken back; it's to get them out more quickly in case they actually work.

There's legislation (the TREAT Act) that is attempting to extend the range of provisional approvals. But according to this column by Avik Roy, an earlier version of the bill went much further: it would have authorized new approval pathways for the first drugs to treat specific subpopulations of an existing disease, nonresponders to existing therapies, compounds with demonstrable improvements in safety or efficacy, or (in general) compounds that "otherwise satisfy an unmet medical need". As with the existing accelerated approval process, drugs under these categories could (after negotiation with the FDA) be provisionally marketed after Phase II results, if those were convincing enough, with possible revocation after Phase III results came in.

Unlike the various proposals to put compounds on the market after Phase I (which I fear would be an invitation to game the system), this one strikes me as aggressive but sensible. It would, ideally, encourage companies to run more robust Phase II trials in the hopes of going straight to the market, and it would allow really outstanding drugs a chance to start earning back their R&D costs much earlier. As long as everyone understood that Phase III trials are no slam dunk any more (if they ever were), and that some of these drugs would turn out not to be as good as they looked, I think that on balance, everyone would come out ahead.

According to Roy, this version of the bill had (as you'd expect) attracted strong backers and strong opponents. On the "pro" side was BIO, the biotech industry group, which is no surprise. On the "anti" side, the FDA itself wasn't ready for this big a change, which isn't much of a shock, either. (To be fair to them, this would increase their workload substantially - you'd really want to couple a reform like this with more people on their end). And there were advocacy groups that worried that this new regulatory regime would water down drug safety requirements too much. The article doesn't name any groups, but anyone who's observed the industry can fill in some likely names.

But there was another big group opposing the change: PhRMA. Yes, the trade organization for the large drug companies. Opinions vary as to the reason. The official explanations are that they, too, were concerned for patient safety, and they wanted the PDUFA legislation renewed as is, without these extra provisions (a "bird in the hand" argument). But Roy's piece advances a less charitable thesis:

Sen. Hagan’s proposal would have been devastating to the big pharma R&D oligopoly. If small biotech companies could get their drugs tentatively approved after inexpensive phase II studies, they would have far less need to partner those drugs with big pharma. They could keep the upside themselves and attract far more interest from investors. Big pharma, on the other hand, would be without its largest source for innovative new medicines: the small biotech farm team.

I'd like to be able to doubt this reasoning more than I do. . .

Comments (19) + TrackBacks (0) | Category: Drug Development | Regulatory Affairs


1. SP on March 15, 2012 7:52 AM writes...

"the first drugs to treat specific subpopulations of an existing disease, nonresponders to existing therapies, compounds with demonstrable improvements in safety or efficacy, or (in general) compounds that "otherwise satisfy an unmet medical need"

Isn't that supposed to be the definition of any drug that is approved for market? What doesn't meet that definition that would still be approved by the standard process?

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2. Rob on March 15, 2012 7:56 AM writes...

In the UK there have also been initial discussions around "early access". It was included in the government's recent "Strategy for UK Life Sciences":

The MHRA is expected to start a consultation on the process soon.

David Cooksey, in his review of health research a few years ago also raised the issue, so it is good to see that government is now taking a better look at it.

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3. Rick Wobbe on March 15, 2012 8:02 AM writes...

Sorry Derek, can't help you with your [lack of] doubt problem...

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4. overthetop on March 15, 2012 8:17 AM writes...

Biotechs are Big Pharma's "largest source for innovative medicines?" ummm... A source? Sure. The largest source of innovation? Yeah, about that...

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5. NoDrugsNoJobs on March 15, 2012 9:06 AM writes...

Seems big pharma can't win. If they had supported it of course they would have been all for putting dollars in front of patients but by voting against it, well, there must be a nefarious reason for that as well. How about this: Large organizations have lots of lawyers who advise them that a plan like this is a fast ticket to Plaintiff's lawsuit heaven. Think of any product that is recalled now - the result is billions of dollars in payouts to plaintiff's attorneys and their customers. If we cannot absolve company's of negligence suits after 2 phase 3 studies, what do you think would result for companies that only did phase 2 studies? Especially when that company is deep pocket big pharma?

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6. johnnyboy on March 15, 2012 9:24 AM writes...

Hmm, I don't buy the "nefarious" hypothesis of the writer (just his use of the term "oligopoly" casts serious doubts on his putative objectivity). I don't think it's only Ph3 costs that are preventing small biotechs from going it alone. Sure Ph3 trials can be expensive, but I think they pale in comparison with post-approval marketing costs. And I think Ph3 trials for unmet needs would probably not be that expensive anyway, since the admissible patient population would tend to be smaller, so the trials themselves would be.
I would guess that PhRMA's opposition has more to do with what #4 said; surely approval after Ph2 would lead to more safety issues being identified post-marketing, and therefore an avalanche of class action suits, allegations that patients weren't properly warned about risks and that they were deceived by evil pharma, blah blah blah. I think PhRMA is just being pre-emptively cautious. Too cautious perhaps, but that's what living in a society ruled by litigation lawyers does to you.

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7. Anonymous on March 15, 2012 9:31 AM writes...

This is not surprising to those who have read about regulatory economic theory.

Per Dan Carpenter et al, "For the better part of three decades, the idea that regulation benefits larger producers at the expense of smaller ones has been a staple conclusion of scholarship in political economy (Huntington 1955, Stigler 1975, Bartel and Thomas 1987; Viscusi 1992). Large firms enjoy relative advantages under numerous forms of regulation – ranging from price-setting institutions to content regulation [e.g., the Federal Communications Commission] to “consumer safety” measures. Such advantages appear in numerous industries, ranging from transportation (Rothenberg 1994) to telecommunications (Noll 1973; Crandall and Flamm 1989) to pharmaceuticals (Grabowski and Vernon 1983). In all of these studies (and many others), researchers have found evidence for the social-scientific proposition that, indeed, “size matters.”

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8. Biotechtranslated on March 15, 2012 9:42 AM writes...

I agree that the PhRMA isn't doing this for nefarious reasons.

When you can get sued for selling an FDA approved drug that later turns out to have a higher risk profile than first thought, imagine what the lawyers could do with a Phase II-only approval. The only way I could see this work is if a law were passed that exempted companies from lawsuits as long as the FDA gave their OK (which will never happen).

And there are a lot of reasons why a small biotech would still want to be acquired or partner with big pharma:

- Manufacturing issues: this is one thing that big pharma does well (maybe not J&J lately, but generally speaking)
- Sales and marketing: you might have a great drug, but do you have the cash to build a 5,000 person sales force?
- Regulatory risk: You start selling your drug after Phase II and are waiting for confirmation from Phase III data. Do you risk the chance that Phase III flops or do you sell to a big pharma and pocket the cash (this is a big issue with the VCs who are looking for an exit)

However, this may help the IPO situation. It's much easier to sell stock at decent valuations when you have some cash coming in.

I think the PhRMA is thinking "The current system is slow, but it is also predictable and has the confidence of the public. Do we really need more bad press about drugs that we sold that did nothing?"


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9. Kate Connors on March 15, 2012 9:51 AM writes...

Thanks, Derek, for your thoughtful column - and to the commenters. Recently, our CEO John Castellani wrote a post for PhRMA's blog, The Catalyst, about the balance between safety and innovation, and it mentions TREAT. Thought you might find it interesting:

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10. CMCguy on March 15, 2012 10:08 AM writes...

Although I feel there is much room to improve the present systems I understand the FDA resistance as (another) mandated increase in responsibility without (probability) of expanded resources to handle. As always it comes down to data and even today if have robust data (which is always open to complexity/interpretations) from Phase I or Phase II negotiations with FDAs can often pave the road to a quicker approval but there again they are between a rock and hard place as greater collaboration with industry brings howls of COI or if drugs subsequently have to be withdrawn they get the blame for not doing their job properly.

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11. cynical1 on March 15, 2012 11:24 AM writes...

No, the reason Big Pharma doesn't want it (TREAT) is because they won't be able to advertise those new "conditionally approved" Phase II drugs directly to the public since their full safety and efficacy will not have been evaluated. All Big Pharma does is marketing now. What are they going to do if they support all those marketing departments? The very notion of not advertising their drug would make every marketing directors head explode. Lets face it, Big Pharma has devolved to an industry that mostly just makes a bunch of stupid TV commercials these days. If they can't market it corruptly like they do with all their other drugs, they're not likely to be interested. Who cares if we can treat your diabetes if we can't have a TV ad or bribe the doctors to prescribe it?

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12. Jim on March 15, 2012 11:29 AM writes...

I'm sure this is Not why PhRMA is opposed to it, but it should be why. If your new drug is any good, why would anyone sign up for a PhIII study and risk the being in the placebo group when you can get what your doctor is telling you is an effective therapy? I would bet success rates in PhIII would drop even more.

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13. johnnyboy on March 15, 2012 12:39 PM writes...

must...resist...answering the troll....

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14. alf on March 15, 2012 2:39 PM writes...

Since when is protecting your business advantage nefarious?

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15. Hap on March 15, 2012 5:01 PM writes...

Attempting to engineer something that benefits only your clients to the expense of, well, everyone else is a pretty good working definition of evil. It looks even more incongruous when much (if not all) of your moral credibility comes from the medicines sold by your clients which make people's lives better and longer (and their mission to find more), so hindering a policy that might accelerate delivery of medicines to do precisely those things might seem to be chopping away at the branch you're standing on.

So, if that were its reasoning, PhRMA's actions could easily be considered nefarious. The ambiguity is that we can't know what their internal reasoning is, and it's pretty hard to credit PhRMA with that much bad will without better knowledge.

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16. Shanedorf on March 15, 2012 7:32 PM writes...

@ 4 overthetop: I recently attended a biopartnering meeting in San Diego and all of the Big Pharma present shared some details on their current pipelines. Pfizer, AZ, BMS, Merck & Novartis all said they are getting between 45-65% of their development pipeline from outside their walls.

As for the TREAT comments in the article, its always a safe bet to "Follow the Money..."

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17. overthetop on March 16, 2012 7:51 AM writes...

@16 Shanedof: I'm in big Pharma and have been involved in Due Diligence for acquiring outside assets. Big Pharma leaders are throwing a lot of money at anything that looks remotely promising, but sadly most of those "innovative" compounds get flushed out really fast. Given the devastation that Pfizer, AZ, BMS, and Merck have self-inflicted on their internal R&D, they don't have a choice but to look to outside assets. I expect their pipeline to continue to be populated with greater numbers of outside compounds...and also expect to see their revenues continue to plummet.

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18. HelicalZz on March 16, 2012 8:41 AM writes...

I'd like to be able to doubt this reasoning more than I do. . .

Yeah, a bit too on point.

While much of the discussion can amount to semantics and language, instead of pre-approvals and or provisional marketing, I'd like to see something akin to commercialized phase 3 trials. This should diminish (shift really) the total R&D spend. It would enable the cost of these trials to be recouped (but not necessarily profited on). This would also better establish the need / market / reimbursibility of a given drug for a given indication. I can see some issues too, but a model along such lines should be workable.

OF course this too would enable biotechs to stay independent.

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19. Zippy on March 19, 2012 11:29 AM writes...

Since I followed you from Megan's place, how about this notion: let anybody sell whatever drugs they want. The label must say "Not FDA Approved" in bright red letters at least one inch high.

Then let FDA approval continue as before. Make it operate as a total bar to state tort actions.

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