1. Art and Diseño

InsideHealthPolicy.com’s
FDA Week
an exclusive weekly report on Food and Drug Administration policy, regulation and enforcement
Vol. 21, No. 5 — February 6, 2015
Hamburg To Step Down, Views Science-Based Regulation As Her Legacy
FDA Commissioner Margaret Hamburg informed her staff Thursday (Feb. 5) that she will step down at the end of
March, with agency Chief Scientist Stephen Ostroff slated to take over as acting commissioner just as the new GOP
Congress takes up major FDA reforms, the first biosimilar decision is on tap and the White House pushes a new
Precision Medicine Initiative. But Hamburg leaves her own legacy after nearly six years as FDA chief, ticking off major
efforts spanning from food safety to breakthrough therapies to tobacco prevention in an internal email to staff in which
she says “the heart” of her accomplishments is a “strong commitment to science as the foundation of our regulatory
continued on page 6
Obama Seeks $425M Bump For FDA — Mostly In User Fees For Food Safety
The president’s 2016 budget seeks a $425 million increase in FDA funding to beef up food safety, combat antibiotic
resistance, address the safety of compounded drugs, improve medical product review and inspections, and promote the
development reliable molecular and genetic diagnostics in line with the administration’s new Precision Medicine
Initiative. The $4.9 billion FDA budget request represents a 9 percent increase over fiscal 2015 funding and includes a
mix of increased budget authority and user fees, including new user fees for food safety that have failed to get congressional approval in the past.
continued on page 8
FDA: Next Generation Sequencing Tests May Need New Approach
FDA Commissioner Margaret Hamburg said next generation sequencing tests may be better handled through a new
regulatory approach rather than under FDA’s current approach to devices. This follows comments made by President
Barack Obama last Friday (Jan. 30) that the agency’s approach should reflect the differences between next-generation
genetic tests and other devices, such as a pacemaker or a prosthetic. The commissioner clarifies that most other types of
diagnostic tests fit into the medical device regulatory structure.
“Most diagnostic tests follow a one test — one disease paradigm that readily fits FDA’s current device review
continued on page 10
FDA Reopens Debate Over Contentious Generic Drug Labeling Rule
FDA plans to reopen the comment period for its controversial proposed rule requiring that generic drug makers
modify their labels independently of their brand-name counterparts and will do a new economic analysis, the agency
reveals in its fiscal 2016 budget justification material. A former FDA official said the move is a clear signal the agency
may “re-propose” the rule, which has come under intense fire from the generic drug industry since it was proposed in
2013.
The agency also plans to hold a public meeting on the issue and will release a transcript of stakeholders’ presentacontinued on page 12
FDA Estimates 860 Hours Needed For Biosimilar Approval Process
FDA estimates that the time needed for a drug manufacturer to complete the biosimilar application process for a
determination of biosimilarity or for interchangeability is 860 hours, based on the five biosimilars applications sent in
last year and as the agency prepares to reach its first decision in March. FDA looked at the five applications — although
only three companies have publicly announced the submission of their application — it received in 2014 to make the
estimate. FDA has yet to issue draft guidance on interchangeability, but it is expected to do so later this year.
In a document released in the Federal Register Tuesday (Feb. 3), the agency said it believed the estimate to be
continued on next page
appropriate, but the number may end up being lower as FDA gains more experience with biosimilar applications. The
agency says at this point it expects applications for biosimilarity and interchangeability to be nearly as complex as a
biologic application.
“Until we gain more experience with biosimilar applications, FDA believes this estimate is appropriate for 351(k)
applications because to determine biosimilarity or interchangeability of a proposed 351(k) product, the application and
the information submitted is expected to be comparably complex and technically demanding as a proposed 351(a)
[biologic] application,” the document says.
In order to get a biosimilarity designation a biosimilar manufacturer must show “that the biological product is highly
similar to the reference product notwithstanding minor differences in clinically inactive components,” and that “there are
no clinically meaningful differences between the biologic product and the reference product in terms of safety, purity, and
potency of the product.”
To demonstrate interchangeability the product must be proven to meet the definition of biosimilarity and “that the
biosimilar biological product can be expected to produce the same clinical result as the reference product in any given
patient and, if the biosimilar biological product is administered more than once to an individual, the risk in terms of safety
or diminished efficacy of alternating or switching between the use of the biosimilar biological product and the reference
product is not greater than the risk of using the reference product without such alternation or switch.”
Once a biosimilar gets an interchangeability designation it may be substituted for its reference biologic
without the approval of the prescribing provider much in the way generic small-molecule drugs are substituted for
brand-name drugs, FDA says. This, however, is subject to individual state pharmacy laws. Five states have already passed
legislation at the behest of the brand-name pharmaceutical lobby that would require various types of provider and patient
notification and approval before a biosimilar could be substituted for its reference biologic. In December the generic drug
lobby and the biotechnology and pharmaceutical lobbies agreed to compromise language making substitution of
biosimilars easier, as more states look to pass legislation on the issue.
FDA has said it will determine on a case-by-case basis what evidence, tests and animal and human trials are necessary for a biosimilar approval.
The agency is expected to approve Sandoz’s filgrastim biosimilar for Amgen’s Neupogen in March following an FDA
advisory panel’s recommendation last month that Sandoz had shown biosimilarity to Neupogen. Should FDA approve
Sandoz’s product it would be the first biosimilar approved in the United States since passage of the Biologics Price
Competition and Innovation Act created a pathway for biosimilars in 2010.
Sandoz did not apply for interchangeability for its filgrastim product, but said it may submit a supplementary
application seeking that designation in the future.
While Sandoz did do additional clinical studies on its filgrastim product for its application to FDA, the company was
also able to rely on already established safety and efficacy data for the filgrastim biosimilar it has marketed in Europe
under the name Zarzio since 2009. The European Union has been far ahead of the United States in getting biosimilars to
market, with the European Medicines Agency creating a biosimilar pathway in 2006.
Neither FDA nor Sandoz has said how many hours it took the company to meet the application requirements.
While FDA said it looked at the requirements for the five biosimilar applications it received to make the 860 hour
estimate, only three applications have been made public by their sponsors: Sandoz’s filgrastim biosimilar of Amgen’s
Neupogen; Celltrion’s infliximab biosimilar of Jansen Biotech’s Remicade; and Apotex’s pelfilgrastim biosimilar of
Amgen’s Neulasta. FDA does not publicly announce the submission of drug and device applications, but individual
sponsors can announce their submissions if they choose.
The public comment period on FDA’s time burden estimate for biosimilar applications ends on April 6. — Todd Allen
Wilson
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FDA Week - www.InsideHealthPolicy.com - February 6, 2015
Payers, PBMs May Hold Key To Biosimilar Market Access
A Health Affairs journal article published Monday (Feb. 2) says payers and pharmacy benefit managers (PBMs) will
need to make biosimilars part of tiered formularies and use step therapies in order for biosimilars to successfully break
into the U.S. market and lower drug costs relative to biologics. The authors contend that differences between the
Hatch-Waxman Act and the Biologics Price Competition and Innovation Act (BPCIA) and lack of FDA guidance
will make it more difficult for biosimilars to gain a foothold in the market once the agency approves the first
biosimilars this year — with all signs pointing to approval of Sandoz’s filgrastim biosimilar of Amgen’s Neupogen
coming in March.
“By establishing abbreviated pathways for follow-on biologics, the Biologics Price Competition and Innovation Act
has the potential to deliver significant savings to patients while preserving innovation. However, competition may
not resemble that posed by small-molecule generics under the Hatch-Waxman Act, in part because of legislative
choices that dampen the desirability of the abbreviated pathway,” write the authors, Benjamin Falit, Surya Singh
and Troyen Brennan.
The authors say that the strictness of the 1984 Hatch-Waxman Act, which mandated FDA issue legally binding
regulations as to what is needed for an abbreviated pathway for bringing generic drugs to market, made it easier for
generics to grow from 20 percent of the market when the act was passed to 80 percent of the market today.
In contrast, they say, 2010’s BPCIA does not require the agency to issue binding regulations or even guidances
in regard to the abbreviated biosimilar pathway. The authors note that FDA has issued five draft guidances on the
biosimilar pathway that mostly detail what data is needed to show biosimilarity to the biologic reference product, but has
yet to issue any guidance, and is not obligated to, on important topics such as interchangeability.
Under the BPCIA there are two types of approval designations a biosimilar can receive — biosimilarity and interchangeability. With interchangeability a biosimilar could replace its reference biologic in the same way a generic is
substitutable for a brand-name drug.
Although, the authors note, automatic substitution for biosimilars is subject to state law and five states have already
passed legislation at the behest of the brand-name pharmaceutical lobby that would require various types of provider and
patient notification and approval before a biosimilar could be substituted for its reference biologic. In December the
generic drug lobby and the biotechnology and pharmaceutical lobbies agreed to compromise language making substitution of biosimilars easier, as more states look to pass legislation on the issue.
With the BPCIA lacking statutory requirements comparable to those in the Hatch-Waxman Act, FDA has said it will
look at what is required of biosimilar applicants on a case-by-case basis. FDA reiterated this stance at a recent advisory
committee meeting that recommended the agency approve Sandoz’s filgrastim as a biosimilar of Neupogen. Sandoz did
not apply for interchangeability for its filgrastim product.
The authors contend that a lack of guidance from FDA and the case-by-case policy may make obtaining an
interchangeable designation from the agency nearly as expensive as gaining approval for an originator biologic.
This combined with what may be a series of strict substitution laws on the state level and a lack of exclusivity or
other incentives may discourage companies from seeking interchangeable status for their biosimilar products, they
say.
“[G]iven the hurdles associated with securing an interchangeable designation, such a promise of market
exclusivity is unlikely to have the same impact as its Hatch-Waxman counterpart. Importantly, for a given brandname product, the first FDA-designated biosimilar to market receives no favorable treatment under the law. To the extent
that the differences between follow-on biologics and their reference products are inconsequential, formulary management
and step therapy could be viable strategies for these products as well,” the authors write.
In order to spur widespread adoption of biosimilar use among providers and patients, along with realizing the
promise of the savings potential of biosimilars, the authors say payers and PBMs will be key in establishing the market.
They suggest payers and PBMs rely on the experience they gained with generics following passage of Hatch-Waxman to
set up tiered formularies with step therapy provisions for biosimilars.
Under this system, the authors say, payers and PBMs can exclude more expensive products from their formularies and require providers and patients to try a less-expensive biosimilar first. Under this system, if the patient doesn’t
respond well to the biosimilar, then the originator biologic could be tried. The authors also suggest grandfathering in a
biologic if that is the product a patient began using before a biosimilar was available.
“To prevent patients from receiving an initial dose of the innovator product, payers and pharmacy benefit managers
must ensure rigid, upfront implementation of prior authorization and other management tools, without exceptions,” the
authors write.
They also say that PBMs and payers should leverage their relationships with providers to help biosimilar manufacturers with direct-to-physician marketing. — Todd Allen Wilson
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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FDA Revamps And Simplifies Expanded Access Application For Physicians
FDA took a step Wednesday (Feb. 4) to speed patients’ access to experimental drugs by putting out a simplified
application that it says will take physicians 45 minutes as opposed to days to fill out when requesting experimental drugs
under the expanded access program. The move comes as House lawmakers also push to improve the program, with both
FDA and federal lawmakers concerned that 25 states are pursuing more aggressive plans that would let patients sidestep
FDA requirements.
The revamped application form was unveiled by FDA in a draft guidance Wednesday (Feb. 4) in response to concerns that the prior application was too complex. The agency said the new form will speed patient access to such drugs
and offers an “important tool” for physicians who treat patients with serious or immediately life-threatening diseases or
conditions for which there are no comparable alternative treatments.
“The draft guidance and draft form continue a policy that started in the early years of the AIDS epidemic when FDA
authorized, in certain cases, ‘compassionate use’ of unapproved investigational drugs,” states FDA Commissioner for
Public Health Strategy and Analysis Peter Lurie in an FDA blog. “In 2009, FDA made these rules broader and clearer.
However, concerns persisted that the existing application form was too complex: it called for 26 separate types of
information and seven attachments. In fact, it was originally designed for manufacturers seeking to begin human testing,
not for physicians seeking use by single patients.”
Lurie adds that the agency estimates it will take physicians 45 minutes to complete this version of the form, which is
far less than the 100 hours listed on the previous form.
The new draft form includes the following information: patient’s initials and date of submission; treatment information; letter of authorization; physician’s qualification statement, name and contact information; request for authorization
to use the form for individual patient expanded access; and the certification statement and signature of the physician.
The new guidance, entitled “Individual Patient Expanded Access Applications: Form FDA 3926,” introduces and
describes draft Form FDA 3926 (Individual Patient Expanded Access—Investigational New Drug Application (IND)).
FDA says that, when finalized, draft Form FDA 3926 is intended to provide a streamlined alternative for submitting an
IND under § 312.23 for use in cases of individual patient expanded access.
The Goldwater Institute, the group driving the states’ “Right to Try” initiatives, said this move indicates that the
agency is “finally getting the message” from the states, but adds that it is not a solution. The state bills, which allow
terminally ill patients access to experimental drugs after they have gone through Phase I trials, have been passed into law
in Colorado, Missouri, Louisiana, Michigan and Arizona.
“‘Compassionate use’ should be the law of the land, not the exception,” said Goldwater Institute President
Darcy Olsen. “Regrettably, a ‘simpler form’ is window dressing on an archaic and inhumane system that prevents the vast
majority of Americans with terminal illnesses from accessing promising investigational treatments. Patients must still beg
the federal government for permission to try to save their own lives — it’s just a shorter form.”
The draft guidance also comes a week after House Energy and Commerce Chair Fred Upton (R-MI) unveiled a draft
21st Century Cures bill that includes a provision requiring drug company decisions around expanded access to be more
transparent.
The measure in the draft legislation, which was spearheaded by Texas GOP Reps. Michael McCaul and Michael
Burgess, would also create an expanded access task force to recommend ways to improve FDA’s current policies.
Congressional appropriators last year asked FDA why the program hasn’t been more successful and the agency
responded in its 2016 budget justification this week that issues surrounding expanded access are challenging and complex. — Erin Durkin
FDA Antibiotic Efforts Include Finalizing Veterinary Feed Directive
FDA’s efforts as part of the president’s initiative to combat antibiotic-resistant bacteria include finalizing the proposed changes to the Veterinary Feed Directive (VFD) by May, and assessing the impact of a guidance that removes
product claims for medically important antimicrobials. The agency also says it plans to leverage an existing genome
sequence repository to drive breakthrough research on antibiotic resistant bacteria, according to the budget justification
for 2016.
In a fact sheet released less than a week before the White House unveiled its complete budget, the president dedicated $47 million to support evaluation of new antibacterial drugs for patient treatments and antibiotic stewardship in
animal agriculture. This is part of a $1.2 billion investment into combating and preventing antibiotic resistance.
“As part of the National Strategy for Combating Antibiotic Resistant Bacteria (CARB), FDA will evaluate new
antibacterial drugs for patient treatments, streamline clinical trials, help phase out the use of medically important antimicrobials in food-producing animals, develop better vaccines for antibiotic resistant organisms, and strengthen capacities
to detect antibiotic resistance,” states the agency in the justification released Monday (Feb. 2).
Under the investment, around $7.1 million will go to the Animal Drugs and Feeds Program to assess and
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FDA Week - www.InsideHealthPolicy.com - February 6, 2015
measure the impact of guidance 213, which lays out the process for companies to remove production uses, such as growth
promotion, from the antibiotic label, and the Veterinary Feed Directive guidance over time.
The agency says it will develop a system, with input from public and industry stakeholders, for monitoring antimicrobial drug use in food-producing animals through the periodic collection of nationally-representative on-farm data on
antimicrobial-use practices and resistance.
This comes after appropriators directed FDA to finalize the VFD rule prior to April 1, 2015 in their December
spending package. FDA responded in the justification document that its current target date for the final version is May
2015. The proposed rule updates requirements for Veterinary Feed Directive drugs used with the oversight of the veterinarian.
Guidance 213 and the VFD proposed rule were released together in December 2013. Under the approach, which has
been widely criticized because it is voluntary, companies would change product labels to remove production uses for
medically important antibiotics and put antibiotics under the supervision of a veterinarian.
Another $5 million will support the FDA drug center efforts to streamline clinical trial protocols, continue
endpoint development, develop novel clinical trial designs, and facilitate establishment of a clinical trial network. Around
$2.2 million will be invested into the Biologics Program for the development of diagnostics, therapeutics and vaccines for
the management of antimicrobial resistant organisms. The request will go to animal model development to support
vaccine and antimicrobial drug development for high priority bacterial pathogens. This will be done within two to five
years, says the agency.
FDA’s device center will also receive half a million dollars to leverage an existing genome sequence repository to
drive breakthrough research on antibiotic resistant bacteria. “Industry will be able to use FDA validated data from this
repository to develop new molecular and genome based diagnostic tests and advance the rapid detection and control of
resistant bacteria,” says FDA.
FDA’s budget justification also reveals the agency will heed a push made by House appropriators in a budget report
for FDA to provide the National Antimicrobial Response Monitoring System with $7.8 million. Appropriators urged FDA
to consider providing additional funding for this program if warranted.
The Senate appropriators also urged FDA in their budget report to develop a strategy to help ensure the use of
medically important antibiotics in food animals for disease prevention.
“FDA’s GFI#213 will eliminate the use of medically important antimicrobials for production uses, and require
veterinary oversight of the remaining therapeutic uses (for treatment, control, or prevention of disease) of these products
in the feed or water of food-producing animals,” states the agency. “While these represent significant changes in the way
these products have been used [in] animal agriculture for decades, FDA acknowledges that they may not address all
concerns. Once GFI #213 is fully implemented FDA will continue to engage in this issue to ensure that public health and
animal health needs are addressed.” — Erin Durkin
Cures Draft Proposes FDA, NIH Advisory Panel Patterned After MedPAC
House lawmakers’ 21st Century Cures Initiative draft bill calls for creation of a congressional advisory commission
tasked with recommending policies to accelerate discovery, development and delivery of new medical products, akin to
the Medicare and Medicaid commissions that currently advise Congress on those programs. The proposed Medical
Innovation Advisory Commission would look at policies administered by the National Institutes of Health, FDA and CMS that
relate to the “discovery, development, and delivery of new medical products,” and how those agencies interact in this regard.
The draft bill specifies that the commission shall assess “the cycle of discovery, development, and delivery of new
medical products in the United States, and the policies affecting such cycle,” and “what steps may be taken to accelerate
the cycle and facilitate the transition between phases of the cycle.”
The panel would be required to send Congress two reports a year, one in March containing results of reviews and
studies it has undertaken, and one in June with policy recommendations. As with the existing Medicare and Medicaid
commissions, lawmakers would not be required to pursue the panel’s recommendations.
The U.S. Comptroller General would appoint 17 members, including a chair and vice chair, serving three-year terms, who
include academic researchers; physicians and other health professionals; experts in the research and development of medical
products for prevention, detection, prediction, elimination or moderation of disease; experts in the area of biostatistics, clinical
pharmacology, pharmacoeconomics, or prescription drug benefit programs; employers; health plans; and third-party payers.
The Cures draft says the panel would have access to data from any federal department or agency as well as the ability
to use existing information — either published or unpublished — compiled by the commission’s staff. It could also award
grants or projects for original research and experimentation if “existing information is inadequate.”
The panel would also be required to establish procedures for interested third parties to submit information they
would like the commission to consider.
The structure and purpose of the proposed advisory commission mirrors those of Medicare Payment Advisory
Commission (MedPAC), established by the 1997 Balanced Budget Act, and the Medicaid and CHIP Payment Advisory
Commission (MACPAC), established by the Affordable Care Act. — Todd Allen Wilson
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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Hamburg Leaves In March . . . begins on page one
decision-making.”
Key House and Senate committee leaders praised Hamburg for her work with lawmakers on the 21st Century Cures
Initiative and on compounding oversight issues, and urged future agency leaders to likewise engage with lawmakers as
they push to modernize FDA.
Hamburg writes that issues tackled by FDA under her tenure involved “scientific innovation, globalization, the
increasing breadth and complexity of the products that we regulate, and our new expanding legal authorities.”
Hamburg’s email points to food safety improvements, the Nutrition Facts label update, development of a new
tool to accelerate review of “breakthrough therapies,” beefed up oversight of human drug compounding, reduced
premarket review times of new medical devices, a proposed framework for evaluation of laboratory-developed tests,
development of a biosimilars pathway. and securing the safety of a globalized food and medical product supply
chain.
Most recently, Hamburg unveiled FDA’s plan to develop a new approach for next-generation sequencing tests, using
funding provided by President Barack Obama’s Precision Medicine Initiative to build that infrastructure.
Hamburg also plays up the bipartisan nature of many of the policy efforts that took place during her tenure.
“The Agency has received numerous votes of confidence with the bi-partisan enactment of a series of landmark bills
extending our authority in the areas of tobacco, food safety and medical products. In addition, we have achieved a
dramatic increase in our budget, from some $2.7 billion in FY2009 to almost $4.5 billion in FY2015.”
House Energy and Commerce Committee Chair Fred Upton (R-MI) on Thursday morning praised Hamburg for
working with him on his 21st Century Cures Initiative, noting that the FDA chief even joined lawmakers on the road
in Lancaster, PA, last August for one of its roundtable discussions. He said he was grateful for Hamburg’s support of
his initiative and expressed hope that FDA and the administration would continue working with lawmakers on the
effort.
Senate health committee Chair Lamar Alexander (R-TN) applauded Hamburg’s leadership of FDA and specifically
her efforts to improve compounding oversight: “We worked together to find a solution that would help prevent another
compounding crisis after the 2012 fungal meningitis outbreak that killed 64 people, including 16 Tennesseans.” Like
Upton, he expressed hope that going forward FDA will work with lawmakers on FDA modernization efforts. “I hope the
president nominates an FDA Commissioner who will work closely with Congress on finding ways to get safe medical
treatments, devices and drugs to patients more quickly,” said Alexander.
Hamburg’s email to staff touts FDA’s efforts to speed products to market. She writes that the agency is “continuing to
increase the speed and efficiency of medical product reviews.” She says most novel drug are being approved on or before
their user fee goal dates and most are being made available to patients in the United States before they were available to
patients in Europe and other parts of the world.
When it comes to medical devices, she says the average number of days it takes for pre-market review of a new
medical device has been reduced by about one-third since 2010, and the percentage of pre-market approval device
applications approved annually has increased since then. She also notes the Unique Device Identification (UDI) final rule,
and the proposed a risk-based framework for laboratory-developed tests.
Hamburg also highlights her food safety accomplishments, pointing to science-based food safety standards, efforts to
reduce trans fats in processed foods; clearer definitions of when baked goods, pastas and other foods can be labeled
“gluten free,” updates to the Nutrition Facts label, and final rules to make calorie information available on chain restaurant menus and vending machines.
Hamburg says she is pleased that Stephen Ostroff has agreed to serve as acting commissioner when she leaves.
“Since joining the Agency in 2013, and most recently serving as FDA’s Chief Scientist, Dr. Ostroff has successfully
overseen numerous significant initiatives, while helping to ensure that scientific rigor, excellence and innovation are
infused across the Agency,” Hamburg writes in her email.
Hamburg is a graduate of Harvard Medical School and prior to stepping into the role of commissioner was the senior
scientist at the Nuclear Threat Initiative from 2005 to 2009. This foundation is dedicated to reducing the threat to public
safety from nuclear, chemical and biological weapons.
She also held the position of commissioner of the New York City Department of Health and Mental Hygiene from
1991 to 1997. According her bio on FDA’s website, her most notable achievement in this position was curbing the spread
of tuberculosis, which resurged as a major public health threat in the 1990s. In 1997, Hamburg became the assistant
secretary for policy and evaluation in HHS.
Hamburg was also listed as the 51st most powerful woman in the world by Forbes in 2014.
“I feel so fortunate to have worked at an organization as remarkable and productive as the FDA,” says Hamburg.
“The expertise, dedication and integrity of our people and the unique nature and scope of FDA’s role make this Agency
truly special.” — Erin Durkin and Donna Haseley
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FDA Week - www.InsideHealthPolicy.com - February 6, 2015
FDA Says Issues Around Expanded Access Are Challenging, Complex
FDA says issues surrounding the agency’s expanded access program, which allows seriously ill patients to obtain
experimental drugs before approval, are challenging and complex, responding to appropriators’ inquiries about why the
program appears to have had limited success. The agency told appropriators that it is willing to work with sponsors of
investigational products to find ways to ensure appropriate access to drugs for serious and life-threatening diseases, and
this week also unveiled a shortened application form for use by physicians in seeking experimental drugs for their
patients.
House appropriators raised concerns about the program in a 2014 budget report, and the House Energy and Commerce Committee last week unveiled a 21st Century Cures draft bill that would require drug companies to be more
transparent when it comes to expanded access decisions. At the same time, more than 20 states are taking up bills that
would let patients access experimental drugs earlier than is possible under the expanded access program.
“The committee is concerned with a lack of useful data regarding the number of Expanded Access (sometimes called
compassionate use) requests made on behalf of patients that are denied by sponsors of investigational products,” states
the House Appropriations Committee in its budget report. “In order to obtain an accurate understanding of the scope of
this problem, the Committee requests that (Government Accountability Office) conduct a review of how FDA is working
with all stakeholders to accelerate the approval of innovative, safe, and effective medicines and how FDA takes into
account safety and efficacy data from Expanded Access programs.”
The draft language for the 21st Century Cures initiative further asserts this effort by requiring the Comptroller
General of the United States to send the House Energy and Commerce Committee and Senate health committee a report
every two years analyzing individual patient access to investigational drugs. The bill would also create an expanded
access task force to recommend ways to improve FDA’s current policies.
The federal legislative measure, spearheaded by Texan GOP Reps. Michael McCaul and Michael Burgess, comes as
more than 20 states push “Right to Try” bills that would let patients access experimental drugs after phase I trials. The
legislation has already passed in Colorado, Missouri, Louisiana, Michigan and Arizona.
McCaul has criticized the state initiatives, saying the laws are a “cry out for a federal response to reform and enhance
the compassionate use program.”
But the Goldwater Institute, the group driving the state effort, said it was not sure whether the federal bill would do
anything to fix the drug access issues for patients targeted by the state laws, adding that these are people who only have a
small amount of time left.
The group also said that if Congress or FDA tries to block these laws, the institute has large litigation experience and
would “prevail” in any sort of court setting. “The right to try to save one’s own life is a fundamental constitutional right,”
said Victor Riches, vice president of external affairs for the institute. “It’s not the agency’s authority to supersede
someone’s constitutional right.”
“If Congress were to do that, they essentially would be telling those patients it would be better to die than to receive
experimental medications,” added Riches. “[The GOP] majority lead in Congress would end very quickly. I don’t believe
that any politicians in Washington, D.C. would want to block these Right to Try laws.” — Erin Durkin
Study: Expand Expedited Approvals To Spur Early-Stage Rx Investment
Policy makers need to offer incentives for early stage investment so that innovation isn’t stymied, according to a
Health Affairs journal article published Monday (Feb. 2) that points to trends showing a drop in venture capital investments in the early stages of drug and device development. The study’s author says policy makers can renew investment in
“critically needed early-stage products” by increasing funding for Small Business Innovation Research; expanding
regulatory pathways that enable early testing of experimental compounds; and giving economic incentives to investors
and developers.
The study says early-stage investors are putting their money toward products that qualify for FDA’s expedited drug
approval pathways, including fast track, breakthrough therapies and accelerated approval, and recommends the agency
extend those programs to novel therapies.
“Policy makers have already demonstrated the effectiveness of actions that increase investment in such areas as rare
and orphan diseases; vaccine development and manufacture; and, more recently, antibiotics. Similar actions should be
considered to encourage seed and early-stage investment into novel therapies for such areas as neurodegenerative disease,
mental health, and diabetes,” writes study author Jonathon Fleming, president and treasurer for Network for Excellence in
Health Innovation.
“Reducing the time, cost, and uncertainty for early-stage venture capitalists to bring life science innovations to
market should be a priority for policy makers. Some of society’s greatest medical needs will be left unmet unless additional attention is given to these policies and reimbursement issues. It is no exaggeration to say that the health of our
nation may depend on it,” Fleming writes.
Early investments refer to the “seed” money venture capitalists invest in a new project or company in order to help
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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get the company or product off the ground. Fleming found that while venture capital investments across all industries rose
sharply over the last five years, investments in the early stages of health care products dropped from 62 percent to 45
percent of the total invested those products — from $323 million in 2009 to $47.8 million in 2014.
Fleming says that early stage investments are critical for new products to fund development to the point that later
stage investors will jump in with the money necessary to move the product through the regulatory process and bring it to
market.
“Early-stage investors are gambling that their capital will produce results that will increase the value of the project
prior to the next round of financing,” Fleming writes.
Regulatory uncertainty — whether FDA will eventually approve a product and whether Medicare and Medicaid will
pay for it — make that gamble too big for early-stage investors, Fleming says. Consequently, he writes, early-stage
investors are flocking to more stable industries. Policy makers hold the key to providing stability and more certainty to
the drug and medical device markets that will bring these investors back, he says.
The regulatory schemes of federal agencies do not always present obstacles to early investing, Fleming notes,
pointing out that FDA has developed programs to expedite approvals and products that qualify for these types of programs are the areas drug and device manufactures are pursuing, and where early-stage investors are putting their money.
Fleming offers five policy actions that may entice early-stage investors into the drug and device market, thereby
spurring innovation:
First, Fleming says, Small Business Innovation Research funding should be increased for targeted areas of Interest.
“SBIR funding is a key source of funds for the experiments needed to justify larger investments from venture capitalists,”
Fleming writes.
Second, Felming says, policy makers need to work to increase public support for expensive clinical trials in targeted
areas of interest, noting that the National Cancer Institute has been “especially proactive in working with developers of
innovative new products to assist in the funding of clinical trials in priority areas.”
Third, Fleming says, special regulatory pathways need to be established that allows for early testing of experimental
compounds in small populations to give early signals of the efficacy of those products “that could justify larger investments into the programs.”
Fourth, Fleming says, policy makers can offer economic incentives in designated areas — similar to the 2012
Generating Antibiotics Incentives Now (GAIN) Act that offers five years of additional market exclusivity for antibiotics
that target qualified pathogens — so that “investors and developers of novel and breakthrough products have more clarity
and certainty about the pricing of their product.”
Finally, Fleming says, policy makers need to establish a national prize for a breakthrough in Alzheimer’s disease
“that inspires entrepreneurs and early-stage investors to enter the field. Fleming the prize could be cash or a tax holiday
for a defined period of time.
The Network for Excellence in Health Innovation, headed by Fleming, includes members from nearly 100 health care
organizations, including patient groups, health plans, providers, employers, universities, hospitals, business organizations,
and the pharmaceutical, biotechnology and medical device industries.
The study comes as House Energy and Commerce Committee lawmakers are exploring ways to extend existing
expedited approval policies and economic market incentives to a broader range of products. — Todd Allen Wilson
Stakeholders Say New Food Funding Significant . . . begins on page one
The Coalition for a Stronger FDA said it “welcomed” the president’s proposal, but added more money is needed for
the agency to meet its myriad of responsibilities.
The $425 million budget increase for FDA breaks down as follows: $148 million in direct appropriations, $79
million from scheduled user fee increases in various user fee acts; and $199 from proposed food safety user fees that have
been a non-starter for Congress in the past — this breaks down to a 6 percent increase in budget authority and a 15
percent increase in user fees.
“In FY 2016, we are requesting essential and timely resources to address critical food and medical product safety
issues. Mindful of the fiscal environment, we have identified targeted reductions where possible and identified long-term
needs for additional user fees to balance budget authority growth,” FDA Commissioner Margaret Hamburg said in the
official agency request to Congress.
The bulk of the budget increase comes from an additional $301.2 million slated for food safety and final implementation of the 2011 Food Safety Modernization Act (FSMA). Of that $301.2 million, $109.5 million comes from increased
budget authority and $191.7 million from new user fees that must be authorized by Congress. The new food safety user
fee proposals would allow FDA to collect fees for food import and food facility registration and inspection, and include
raising the $175 cap on export certification fees to $600.
Sandra Eskin, director of Pew Charitable Trusts’ food safety project, said said her organization is very happy
with the inclusion of $109.5 million in new budgetary authority in the FDA request. Eskin said she hopes Congress
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will give the president’s request serious consideration as the agency faces deadlines for implementing and enforcing FSMA.
“We’ve been saying every year that it’s important to get FDA the funding it needs to implement the law, but this
coming year it really is important that FDA get the money it needs to implement the law because you have the rules being
finalized and they’re preparing to enforce the law,” Eskin said. “So we think this is a great place to start, and we certainly
urge the appropriators to look at what the president is proposing or at least requesting.”
The $109.5 million budget authority request includes $25 million for inspection modernization and training; $32
million for a national integrated food safety system; $11.5 million for industry education and technical assistance; and $4
million for technical staffing and guidance development.
Eskin said Pew isn’t focusing on the proposed user fees, because no legislation has been put forward to establish
them at this point, and even if Congress did approve them the money wouldn’t start coming in for at least a couple of years.
“Assuming for a moment that there even was a proposal that was introduced this year, when push comes to shove if it
made it all the way through the process you wouldn’t be able to collect monies for a number of years — there’s a significant time delay,” Eskin said. “Again, FDA needs money now and in 2016 and 2017 to get the law fully implemented, so
we are focusing solely on the budget authority. And $109.5 million is a really good, solid place to start the discussion.”
FDA also proposes to cut $5.8 million from “lower priority enforcement, surveillance, and research activities” in the
Animal Drugs and Feeds Program and the National Center for Toxicological Research in order to support higher priorities like FSMA implementation.
New cosmetic and courier fees. FDA also proposes a new cosmetics user fee estimated to bring in $60 million, and
an international courier user fee designed for the approval of certifications to facilitate free trade.
The budget also increases funding for the new Precision Medicine Initiative, antibiotic resistance and compounding
oversight.
Antibiotic resistance. The FDA budget proposal includes an additional $14.8 million budgetary authority for
combating antibiotic resistant bacteria, which falls in line with Obama’s proposal introduced last month in the State of the
Union address and detailed by the White House last week. The president’s antibiotic proposal nearly doubles federal
funding in this area, with $47 million set aside for FDA evaluation of new antibacterial drugs for patient treatments and
antibiotic stewardship in animal agriculture.
Precision Medicine Initiative. The FDA budget asks for an additional $9 million in budget authority dedicated to
Obama’s Precision Medicine Initiative also introduced in the State of the Union. Last Friday the president laid out the
specifics of the initiative, which includes $10 million for FDA to beef up its expertise and databases to support a new
regulatory structure that both spurs innovation in precision medicine and protects public health.
Increase in existing fees. The $79 million in scheduled user fee increases called for include prescription drug,
generic drug, biosimilar, medical device, animal drug and animal generic drug user fees.
Jeff Allen, president of the Alliance for a Stronger FDA, said the the presidents request for $148 million in additional
budgetary authority for the agency “is welcomed by the FDA stakeholder community,” noting Obama’s request nearly
doubles the increase in base funding for the agency that has occurred over the past four years.
“We urge the House and Senate appropriations committees to recognize the same FDA needs that the President has,”
Allen said. “The additional funding for food safety, precision medicine, drug compounding oversight, and antibiotics
development will make a huge difference at the agency,” Allen said.
Allen said, however, that the president’s proposed increase in FDA funding falls far short of what the agency needs to
meet the agencies “new and expanding” responsibilities.
“At the same time, however, we can also point to other FDA programs that need and warrant additional funding,” he
said. “The Alliance will continue to advocate for this additional funding.” — Todd Allen Wilson
FDA Tells Appropriators It Is Crafting Standards For Generic Opioids
FDA is working on the appropriate testing protocols and evaluation standards for generic opioids with abusedeterrent properties, and plans to publish guidance in the near future, states the agency in its 2016 budget justification
document. The agency also says it is committed to finalizing its 2013 draft guidance on evaluation and labeling of abusedeterrent opioids soon, but adds that the fact that the document is not finalized has not prevented FDA from evaluating
proposals to include abuse-deterrence language in the labeling of specific products.
The agency responded to concerns expressed by both the House and Senate appropriations committees in last year’s
budget reports about the lack of final guidance in this area. Congress’ year-end spending bill specifically withheld $20
million from the Office of the Commissioner and said the funds would be transferred to the Office of Criminal Investigation if the 2013 draft guidance was not finalized by June 30, 2015.
“FDA believes it has made substantial progress on this important topic but agrees that more work remains to be
done,” says the agency in its budget justification document. “Thus far, four opioid product labels have been approved
with abuse deterrence claims consistent with the 2013 draft guidance. FDA is in the process of revising and finalizing this
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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guidance. However, the fact that this guidance is not yet final has not and will not prevent FDA from evaluating proposals
to include abuse-deterrence language in the labeling of specific products.”
“FDA is also working on appropriate testing protocols and evaluation standards for generic versions of opioids with
potentially abuse-deterrent properties and plans to publish guidance on that topic in the near future,” the agency adds.
“FDA expects that the issues concerning human abuse liability studies raised in the Committee’s report will be addressed
in the latter document.”
House appropriators had also expressed concerns about FDA’s approval of Zohydro, which did not have abuse
deterrent properties. Stakeholders and lawmakers had pressured FDA to reverse its decision on the approval of Zohydro
earlier in 2014.
“Approving this powerful narcotic without any abuse deterrent formulation, despite the strong opposition of the
relevant FDA expert Advisory Panel, seems counter to the assertion that ‘the prevention of prescription opioid abuse is of
the highest priority for the FDA,’” states the House committee. “The DEA Administrator indicated to the Committee that
the agency is spending considerable resources to educating agents, diversion investigators, and tactical diversion squads
about the approval of this medication that ‘frightens us all.’”
FDA defends its decision, saying that at the time of the approval, Zohydro was the first extended-release single-entity
hydrocodone product; all previously-approved hydrocodone products were short-acting and contained acetaminophen,
which is associated with liver toxicity risks. The agency also points out that products like Zohydro only account for a tiny
fraction of the prescription opioid market. FDA last week approved a new formulation of Zohydro Extended Release
Capsules, CII, with abuse-deterrent properties, according to a company press release. — Erin Durkin
FDA Reconsiders Approach To NGS Tests . . . begins on page one
approaches for evaluating a test’s analytical and clinical performance,” said Hamburg in a blog Friday. “Next generation
sequencing produces a massive amount of data that may be better handled using a new approach.”
The commissioner explained that next generation sequencing can identify thousands — even millions — of genetic
variants carried by a single individual. These results can be used to diagnose or predict a person’s risk of developing
different conditions or diseases, and potentially help physicians and patients determine what course of treatment should
be used to treat specific individuals.
Obama last week said he would set aside $10 million in his 2016 budget for FDA to beef up its expertise and
databases to support a new regulatory structure that both spurs innovation in precision medicine and protects public
health. The American Clinical Laboratory Association (ACLA) said it supports the increased investments to the National
Institutes of Health and the National Cancer Institute under the new initiative, but asserts that any laboratory-developed
tests, including next-generation sequencing tests, should fall under CMS regulation rather than FDA oversight.
Hamburg said that FDA, as part of Obama’s recently unveiled Precision Medicine Initiative, is reviewing its approach to this kind of technology. She points to a discussion paper published in December that asks questions about how
best to assure that tests are accurate, reliable and are available to patients as soon as possible. The agency will host a
meeting on next-generation sequencing technology on Feb. 20.
“In order to continue to support the development of useful medical information, FDA believes the most efficient
possible approaches to regulating NGS tests should be considered,” states the discussion paper. “Among the possibilities,
a standards-based approach to analytical performance of NGS tests and the use of centralized curated databases containing up-to-date evidence to support clinical performance are under discussion.”
According to the paper, there are challenges to regulating next generation sequencing tests because these tests
can identify an unlimited number of variants based on over 3 billion base pairs of the human genome. Evaluating
whether each data point is accurately measured would take years; and it may be impractical for test developers to provide
evidence supporting clinical significance for rare variants detected by these tests. Clinical relevance of many variants
detected by NGS tests may have limitations because of the rarity of the mutations, and communicating information
regarding the significance of the presence of genetic variants in a way physicians and consumers understand presents
challenges.
As an example of FDA overcoming some of these challenges, the agency refers to the approval of Illumina MiSeqDx,
its universal sequencing reagents, and two accompanying assays for the diagnosis of cystic fibrosis. The agency says the
analytical test performance was demonstrated for a representative subset of types of variants in various sequence contexts.
“FDA plans to continue to use this subset-based approach when evaluating the analytical performance of NGS
platforms, but is considering novel and efficient approaches for establishing analytical performance for specific NGS
tests developed using FDA cleared or approved components in clinical diagnostic laboratories,” the agency states.
The agency suggests that other diagnostic laboratory developed tests will fall under FDA’s proposed framework that applies the already existing medical device risk-classification system, which has been a lightning bolt issue for
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the lab community.
“[T]he FDA’s push to regulate laboratory developed testing services through the ‘Draft Guidance’ documents issued
last year would dramatically slow patient access to vital diagnostic tools and runs counter to the President’s new initiative
to promote precision medicine,” said Alan Mertz, president of ACLA. “Most of the new molecular and genetic diagnostic
tests that are at the very heart of precision medicine are LDTs, and FDA’s proposal would severely impede the development of new LDTs and the advancement of precision medicine.” — Erin Durkin
Study Finds Negative Economic Returns For New Drugs from 2005-2009
Findings of slightly negative returns on average in recent years that fail to recoup research and development and
other costs for over the lifetime of new drug products may chill innovation, according to a Health Affairs journal article
published Monday (Feb. 2). The authors of the study found that expected lifetime economic returns for drugs peaked
between 1995 and 2004, but in the five year period from 2005 to 2009 average returns dipped into negative territory.
While not offering specific solutions, the authors say more policy changes, like FDA’s breakthrough therapies designation, may be needed to spur continued innovation.
“Our study demonstrates that although returns on drug development peaked in the late 1990s and early 2000s, they
have declined to their lowest levels in two decades, as a result of a combination of declining growth in demand and
increasing R&D costs. If such levels persist, the negative returns would likely not be sufficient to sustain medical innovation over the long term,” the authors write.
In looking at four cohorts of new drugs over four-year periods starting in 1991, the study found that the expected
lifetime return — the period from introduction to the market to the end of patents and exclusivity and the introduction of
a generic product for small molecule drugs and a biosimilar for a biologic — for new drugs rose steadily through 2004
and then began to drop to slightly negative returns overall between 2005 and 2009, with small-molecule drugs having a
larger-than-average negative return and biologics having a very small average positive return, the authors say.
The study found that in the 2005 to 2009 cohort average costs to develop and market a drug exceeded revenues from
those product. The average net return for small-molecule drugs during this time period was negative $186 million, and the
average return for biologics was “barely positive” at $93 million, according to the study. For the 2005 to 2009 cohort the
authors made projections on lifetime returns based on historical data, and said that they were unable to make any reliable
projections for new drugs after 2009.
The authors contend that a number of market, regulatory and legislative efforts in recent years may be the cause of,
and further exacerbate, the average negative lifetime returns of new drugs.
Market influences include the introduction of tiered formularies, utilization management and step therapy that favor
generic drugs along with the consolidation of pharmacy purchasing organizations, which includes pharmacy benefit
managers and wholesalers, the authors say. Market influences also include the rising cost of research and development
over the 19-year period looked at. In November Tufts Center for the Study of Drug Development estimated the research
and development costs for a new drug to be nearly $2.6 billion.
Major regulatory and legislative efforts include the 2006 Medicare Part D prescription benefit program and the
2009 Biologics Price Competition and Innovation Act. While the FDA has yet to approve any biosimilars in the
United States — it is expected to do so in March with Sandoz’s filgrastim biosimilar of Amgens’s Neupogen — the
authors used data from biologics that have been affected by the introduction of biosimilars in the European Union
and other countries.
“The end of life for biologics was determined by the presumed date of biosimilars’ entry into the market, based on
consensus date estimates in the public domain regarding expected loss of patent exclusivity or other publicly available
information. If the FDA begins approving biosimilars this year or next, the most recent cohort of biologics launched will
have shorter times from launch to loss of exclusivity, compared to their historical counterparts,” the authors write.
The authors conclude that the “forces for market competition” on both the supply and demand sides of the equation
have eroded the profitability of brand-name pharmaceuticals. While this is good in the short term for both payers and
patients, it may hurt continued innovation as pharmaceutical companies will be wary of pursuing new products as average
returns are negative, the authors say.
Policy changes may be needed to ensure it is possible for brand drug makers to see positive economic returns
on new and innovative products, the authors say, but they do not suggest specific policies that may alleviate their
findings of negative economic returns in recent years. They say recent policies to speed drug approvals, such as breakthrough therapy designations, may “partially offset declining returns, thereby helping spur continued innovation,” but
note it remains to be seen if these policies are effective.
The authors note that the precise reasons for and fixes to their findings of negative economic returns for brand-name
drugs needs to be studied further, and if the negative returns persist innovation will be severely stifled.
“If this level of diminished returns persists, we believe that the rewards for innovation will not be sufficient for
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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pharmaceutical manufacturers to maintain the historical rates of investments needed to sustain biomedical innovation,”
the authors write.
Authors of the study are Ernst Berndt, economics professor at MIT; Deanna Nass, senior researcher at IMS Institute
for Healthcare Informatics; Michael Kleinrock, director of research development at IMS Institute for Healthcare
Informatics; and Murray Aitken, executive director at IMS Institute for Healthcare Informatics —— Todd Allen Wilson
President’s Budget Proposes Single Food Safety Agency Outside Of FDA
The president’s 2016 budget proposes to consolidate FDA food inspection and enforcement functions and the U.S.
Department of Agriculture’s Food Safety and Inspection Service into a single new food agency within HHS, according to
a blueprint of the budget. The budget also includes $1.6 billion in total program resources to bolster food safety activities,
including an increase of $301 million for FDA to implement new safety measures under the Food Safety Modernization
Act.
The budget overview clarifies that the new agency would be independent from FDA and have primary responsibility
for food safety inspections, enforcement, applied research and outbreak response and mitigation.
The proposal takes up an initiative pushed by Sen. Richard Durbin (D-IL) and Rep. Rosa DeLauro (D-CT), who
introduced the effort in the Safe Food Act of 2015 last week. The act would transfer and consolidate food safety authorities for inspections, enforcement and labeling into a single food safety agency; provide authority to require the recall of
unsafe food; require risk assessments and preventive control plans to reduce adulteration; authorize enforcement actions
to strengthen contaminant performance standards; improve foreign food import inspections; and require full food traceability to better identify sources of outbreaks.
The bills were heavily backed by Democratic lawmakers. Cosponsors on the Senate side include Sens. Dianne
Feinstein (CA), Richard Blumenthal (CT) and Kirsten Gillibrand (NY). On the House side, cosponsors include Reps.
Barbara Lee (CA), Louise Slaughter (NY), James Langevin (RI), Bobby Rush (IL), Charles Rangel (NY), Jim
McDermott (WA) and Delegate Eleanor Norton (DC).
The idea of a single food safety agency has been a widely debated topic for years. It was recommended several years
ago by the Government Accountability Office and the Institute of Medicine, and Rep. Rosa DeLauro (D-CT) has long
championed the idea as well.
The USDA and FDA’s regulations of food safety represent approximately 80 percent of the food safety system, and
exemplify the fragmented federal system, states the document. “Fractured oversight and disparate regulatory approaches
are confusing,” says the budget overview. “This division of responsibilities was not deliberately designed, but rather
evolved as the Congress passed laws to address specific food safety concerns.”
In 2012, a top White House Office of Management and Budget official indicated that consolidating food safety
oversight could be tackled by President Barack Obama, but stakeholders argued at the time that FDA’s implementation of
the Food Safety Modernization Act, logistical issues and ramifications for congressional committees would hinder efforts
to create a single food safety agency. — Erin Durkin
Final Generic Labeling Rule Expected In September . . . begins on page one
tions at that meeting, the budget document says.
FDA had originally planned to issue the final version of the rule in December 2014 but in late November punted that
date to September of this year. Subsequently, the Supreme Court decided last month not to take up a case on the issue
noting FDA’s ongoing rulemaking. The generic drug industry had warned it would sue FDA if the rule comes out as
proposed, and FDA’s budget document says agency officials met with the Generic Pharmaceutical Association on the
rulemaking last September. GPhA President and CEO Ralph Neas tells Inside Health Policy the group has held regular
meetings with FDA on the issue and is cautiously optimistic the agency will embrace the industry’s alternative regulatory
proposal. The group has called for FDA to mandate simultaneous labeling changes by both brand and generic drugs rather
than require generic manufacturers act unilaterally when new safety information arises.
As written, the proposed rule would force generic drug companies to unilaterally change their labels if an adverse
event is reported or new information about the effects of the drug are discovered. The generic drug industry has said this
would result in labels that differ between the generic and brand products, and would increase generic drug companies’
liability and in turn hike generic drug prices.
FDA’s budget justification outlines the agency’s latest plan in response to earlier inquiries from House and Senate
appropriators.
“FDA is carefully reviewing comments submitted to the public docket established for the proposed rule from a
diverse group of stakeholders,” the agency document says. “As requested by the House Committee on Appropriations’
recent report language, which supported a listening meeting between FDA and representatives of the regulated industries
to consider alternatives to the proposed rule, FDA is planning to hold such a listening meeting as soon as it can be
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FDA Week - www.InsideHealthPolicy.com - February 6, 2015
conveniently scheduled.”
Currently, generic drug companies are required to have the same labeling as their brand-name equivalents.
Robert Pollock, senior advisor at Lachman Consultants and former acting deputy director of FDA’s Office of Generic
Drugs, told IHP that FDA had no choice other than to delay finalizing the rule and let stakeholders again present their
reasoning due to the large number of negative comments on the proposal.
“I think they were way off base with the proposed rule,” said Pollock. He speculated that a possible middle ground
might be for the agency to “propose generic have a certain number of days to change their label after the innovator does
and if the generic wants to change the label they have to submit a prior approval supplement first.”
Pollock added that FDA will likely try to take a middle ground between the two sides to avoid a bitter legal
fight in court. But, he said, FDA will not be able to please all sides, thus the planned hearings and meetings with
stakeholders to at least hear them out.
GPhA has been a vocal opponent of the proposed rule since its introduction more than a year ago. Neas recently told
IHP he hopes FDA listened to industry’s outcry and that it is taking the concerns seriously. He says GPhA’s alternative
strikes an even chord between maintaining the integrity and intent of Hatch-Waxman and patient safety.
Neas criticized Public Citizen, a Washington-based advocacy group, and trial lawyers who contend the proposed rule
is needed to inform patients in part because some brand-name drugs have fallen out of circulation and there is no way to
update the label for new conditions or side-effects that may occur. Neas said FDA overstepped its legal authority by
proposing the rule.
“If they want to change the law, if they want to make policy changes, they should not be going to FDA,” Neas said.
Meanwhile, FDA’s budget document says the agency will “determine next steps based our analysis of comments on
the proposed rule and additional information submitted as part of the public meeting.” — David Hood
Wyden: White House Plan Builds On Diagnostic Test Provision He Put In ACA
Sen. Ron Wyden (D-OR) said the White House’s Precision Medicine Initiative has roots in an ACA provision he
wrote that authorized Medicare to provide payment for 36 specific tests to determine the best course of treatments for
patients.
“After authoring the personalized medicine provision in the Affordable Care Act, I am encouraged by the President’s
decision to build upon — and improve — the ability for scientists, physicians, manufacturers, and others to develop
therapies specifically tailored to an individual’s unique diagnosis,” Wyden said in a press release last Friday (Jan. 30)
after the White House unveiled more details about its initiative.
Wyden says the administration’s plan builds on his provision, allowing treatment and therapies to be individualized
by taking into account differences in people’s genes, environments and lifestyles.
President Barack Obama held a press conference Friday (Jan. 30) to discuss the goals of the initiative, which includes
developing new approaches for FDA evaluations of next-generation genetic tests. The president stated that the agency’s
approach to new gene sequencing technology should be different from that applied to other devices. — Erin Durkin
Obama Precision Medicine Fuels Fire Over FDA’s Plan For LDTs
The White House revealed last Friday (Jan. 30) that its 2016 budget will include $215 million for the president’s new
Precision Medicine Initiative, including $10 million for FDA to beef up its expertise and databases to support a new
regulatory structure that both spurs innovation in precision medicine and protects public health. This effort could affect
recent moves by FDA to regulate laboratory-developed tests (LDTs), especially genetic tests, as President Barack Obama
said Friday the agency’s reviews must reflect the difference between such tests and other devices.
The overall initiative was immediately praised by the American Clinical Laboratory Association (ACLA), but the
group clarified that it thinks all laboratory-developed tests, including next-generation sequencing tests, should not fall
under FDA oversight.
Obama released new details about his initiative following this week’s release of House lawmakers’ 21st Century Cures
draft bill and a Senate report outlining a parallel effort, both of which also addressed personalized medicine. Those
present at the White House announcement included Senate health committee chair Lamar Alexander (R-TN), who
coauthored the Senate report with Sen. Richard Burr (R-NC), and Rep. Diana DeGette (D-CO), who spearheaded the
House Cures initiative with Rep. Fred Upton (R-MI) but didn’t endorse the draft bill. Obama acknowledged ranking
health Democrat Patty Murray’s (WA) work with Alexander; but he didn’t mention Upton. HHS Secretary Sylvia Burwell
and FDA device chief Jeffrey Shuren were also in attendance.
A new White House fact sheet says FDA will be asked to develop a new approach for evaluating next-generation
sequencing technologies. These tests rapidly sequence large segments of a person’s DNA, and even their entire genome.
“We are going to work with FDA to develop new approaches for evaluating next-generation genetic tests,”
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said Obama at the press conference, unveiling more details about the initiative he announced in his State of the Union
address. “The way we approve a new gene sequencing technology is going to be different from the way we approve a
pace maker or prosthetic device. We need to make sure our approach reflects the differences in technology.”
Alexander and Burr wrote about a need for more flexible clinical trial requirements in their report. “With improved
knowledge of the molecular progression of disease and decreasing costs of genomic sequencing, personalized medicine
demands responsive and flexible clinical trial designs,” the senators say.
As a senator, Obama wrote with Burr the Genomics and Personalized Medicine Act, which included provisions
to strengthen the regulation of genetic tests.
FDA unveiled its regulatory plan for lab tests last year, stating in draft guidance that the agency would apply the
medical device risk classification system under a nine-year implementation timeline for LDTs. The proposed requirements created a firestorm as lab stakeholders voiced concerns that the framework would stifle innovation and cause
duplicate efforts between FDA and CMS.
Stakeholders also expressed concerns at a recent public meeting over the framework, saying the agency should include
CMS and payers as part of the conversation because poor reimbursements cause huge financial restraints for laboratories.
“[T]he FDA’s push to regulate laboratory developed testing services through the ‘Draft Guidance’ documents issued
last year would dramatically slow patient access to vital diagnostic tools and runs counter to the President’s new initiative
to promote precision medicine,” said Alan Mertz, president of ACLA. “Most of the new molecular and genetic diagnostic
tests that are at the very heart of precision medicine are LDTs, and FDA’s proposal would severely impede the development of new LDTs and the advancement of precision medicine.”
According to the National Human Genome Research Institute, FDA announced its risk-based framework after calls
dating as far back as 1997 for the agency to regulate such tests, including genetic tests. A joint NIH-Department of
Energy Task Force on Genetic Testing recommended the formation of a committee to advise the HHS Secretary in this
area, and in 2000 that committee called for FDA to review tests for their diagnostic or prognostic value.
The Precision Medicine Initiative in the the president’s 2016 budget will also include $130 million for NIH to
develop a national research cohort of a million or more volunteers; $70 million for the National Cancer Institute to
scale up efforts to identify genomic drivers in cancer; and $5 million for ONC to support the development of
interoperability standards and requirements that address privacy and enable secure exchange of data across systems.
The requested hike in NIH funding comes after such an initiative was left out of the House 21st Century Cures draft
bill. A funding increase for NIH had been pushed for by DeGette, and the omission was sharply criticized by Rep. Frank
Pallone (D-NJ).
“Advances in precision medicine have already led to powerful new discoveries and several new treatments that are
tailored to specific characteristics of individuals, such as a person’s genetic makeup, or the genetic profile of an
individual’s tumor,” states the White House fact sheet. “This is leading to a transformation in the way we can treat
diseases such as cancer. Patients with breast, lung, and colorectal cancers, as well as melanomas and leukemias, for
instance, routinely undergo molecular testing as part of patient care, enabling physicians to select treatments that improve
chances of survival and reduce exposure to adverse effects.” — Erin Durkin
UDI/UFI Implementation Gets $3.1 Million In Administration Budget Request
FDA’s 2016 budget request include a $3.1 million increase for FDA’s landmark unique identifier systems, with $1.1
million earmarked to help FDA expand its systems to implement the unique facility identifier and $2 million set aside for
the unique device identifier program. Both initiatives were called for by the Food and Drug Administration Safety and
Innovation Act.
FDA Budget Director William Tootle told reporters on a conference call that the funding request “should be enough” for
the two programs. He said the requested increase came as a result of maxed-capacity in the registry space to handle UFIs.
The move comes as no surprise, said Jay Crowley, vice president of UDI Services and Solutions at USDM Life
Sciences. He said FDA is moving to make a postmarket surveillance system for devices similar to that in place for drugs.
Crowley added that the 2016 funding request was “reasonable” and should be enough to cover the relatively low cost of
maintaining the infrastructure to handle UFIs and implement UDIs.
“There’s a significant infrastructure that allows researchers from all around, not just FDA, to assess risks and identify
new risks and validate potential problems,” said Crowley.
Crowley said that stakeholders and Congress have “gotten over the UDI hurdle” and will do what it takes for full
implementation.
“I think it’s a reasonable and not a particularly big or costly step,” said Crowley.
Unique Facility Identifiers are nine-digit codes that foreign and domestic drug or device establishments must register
for under Sections 701 and 702 of FDASIA. The sections require the establishments to re-register annually with FDA
between Oct. 1 and Dec. 31 and require the registration to include a UFI issued by FDA.
The $2 million set aside for UDIs is intended to “provide a consistent, standardized, unambiguous way to identify
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medical devices and allow FDA to quickly and efficiently identify marketed devices when recalled and improve the
accuracy and specificity of adverse event reports,” according to an FDA justification document submitted to congressional appropriators.
“Increased funding for UDI implementation rightly emphasizes the importance of helping the FDA, hospitals, and
clinicians more quickly identify faulty or failing devices and remove them from the market,” said Josh Rising, director of
healthcare programs at The Pew Charitable Trusts, in a statement to FDA Week. “Additional funding alone is insufficient;
the UDI system can only provide better data on device performance if it is incorporated into electronic health records and
insurance claim,” he adds. — David Hood
Senate Plans March Hearings, Starts ‘Cures’ Bipartisan Staff Workgroup
The Senate health committee’s top Republican and Democrat on Tuesday (Feb. 3) announced they will tap a bipartisan staff working group next week and hold hearings in March to advance a medical innovation effort that complements
the House’s 21st Century Cures Initiative. The hearings will examine the respective roles of FDA and the National
Institutes of Health in getting safe treatments, devices and cures to patients, committee chair Lamar Alexander (R-TN)
and ranking Democrat Patty Murray (WA) suggested in a joint press release.
Murray lent her name to the initiative on the heels of a massive report released last week by Alexander and committee member Richard Burr (R-NC) outlining ways FDA could streamline its processes to get products to market.
Murray said she hopes to continue working with Alexander to ensure safety is not compromised, a concern also
raised by consumer safety advocates when House Energy and Commerce Committee chair Fred Upton (R-MI) unveiled
his 21st Cures Initiative white paper last month without Democratic backing. FDA officials likewise have warned lawmakers against proposing any dramatic changes to longstanding clinical trial design.
Murray said: “I’m looking forward to a bipartisan effort to strengthen our country’s leadership in developing lifesaving, world-changing cures and treatments. As we look for ways to advance innovation for patients and families, I will
keep working with Chairman Alexander and all of my colleagues to ensure that we maintain the highest standards of
patient and consumer protection, so that patients continue to have complete confidence in the safety and effectiveness of
the medicine their government has approved.”
Alexander signaled his committee, like the House, will look for ways to reform the development and approval
processes, but he also hinted he may address funding for the National Institute of Health. Upton’s decision not to include
an NIH funding increase in his white paper is viewed as a reason Democrats didn’t sign endorse the paper.
“We want to modernize the way drugs and medical devices are discovered, developed, and approved. We will
examine the work of the National Institutes of Health, which funds and enables much of the research that leads to medical
breakthroughs, and the Food and Drug Administration, which regulates all the medical products we come in contact
with,” Alexander said. — Donna Haseley and David Hood
BIO, PhRMA Slam Warren’s Bill Fining Industry To Boost NIH Funding
Sen. Elizabeth Warren (D-MA) introduced her promised bill to divert money from pharmaceutical companies to
boost NIH funding, drawing fire from pharmaceutical groups who maintained the measure would result in fewer medicines and “lost jobs.”
Warren’s bill would require pharmaceutical companies that enter into settlement agreements with the government to
avoid a trial for violating federal anti-fraud laws to pay a portion of their profits to help fund research at NIH and FDA. ,
More than 41,000 people signed a MoveOn.org petition supporting Warren’s bill as of press time Thursday.
The Pharmaceutical Research and Manufacturers of America took a shot at the legislation when Warren proposed it
in a speech at recent Families USA conference. The group said the bill is “misguided “ and would “siphon funding from
the groundbreaking medical research happening in the biopharmaceutical industry (and) will have devastating consequences for patients and society.”
The Biotechnology Industry Organization locked in step, saying the legislation has the right idea of finding ways to
improve NIH funding, but misses the mark by fining companies. BIO argued that settlements do not necessarily mean that
companies did anything illegal or “operated in bad faith,” and would therefore be wrong for the government to impose a
fine or fee for settling.
“The legislation seeks to impose an ‘innovation fee’ on drug developers that enter into settlement agreements with
the government,” said BIO in a statement. “In actuality, this legislation would impose a tax on innovation, which would
inhibit and delay medical innovation and, in effect, harm those patients waiting for cures.”
Warren said that under her plan, NIH could receive up to $6 billion more a year without raising new taxes, raising funding
for the agency about 20 percent. The senator compared her bill to a swear jar, saying “whenever a huge drug company that is
generating enormous profits as a result of federal research investments gets caught breaking the law—and wants off the hook—
it has to put some money in the jar to help fund the next generation of medical research.” — David Hood
FDA Week - www.InsideHealthPolicy.com - February 6, 2015
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Cures Bill Lets Third Parties Decide If A Device Can Skip 510(k) Process
An evolving provision in House lawmakers’ draft 21 st Century Cures bill would give third-party reviewers
authority to decide whether changes to medical devices are minor enough to allow device makers to skip sending
premarket notifications to FDA under the 510(k) process. A device industry lawyer doubts the provision as written
will advance because of how much power it vests in third parties to determine what constitutes a minor device
change.
The provision, drafted by Rep. John Shimkus (R-IL), says lawmakers are still working out the details of what types
of changes to devices would qualify for third-party certification that would let the devices get around the 510(k) process.
The draft bill includes a note in brackets stating that more specificity is needed on what types of technology, manufacturing and notifications that do not alter a device’s fundamental technology and labeling would be appropriate for third-party
certification, as are details on which type of changes would not.
The idea is to streamline market clearance for devices that actually have insignificant changes by bypassing FDA
altogether if the third-party reviewer deems it appropriate, lawmakers suggest in a white paper accompanying the draft
bill.
John Smith, a partner at Hogan Lovells, notes the bill puts the onus on the third-party reviewer, who would be
accredited by FDA, to determine when a change alters a “device’s fundamental technology.” The language in the bill is
unclear and therefore could mean anything, Smith said, while saying he agrees with the goal of streamlining the process.
Lawmakers, by taking the decision away from FDA, could introduce bigger problems than the provision is attempting to
solve, he suggested.
“If what they’re saying is ‘it’s cleared, you make minor manufacturing changes, you don’t make major labeling
changes and you don’t change its fundamental technology, you don’t have to put that modification before FDA,’ that’s a
big change.”
“What they’re looking to do here is very unusual in the history of the Food Drug and Cosmetic Act. Though there
have been third-party assessments before for medical devices...the program hasn’t been hugely successful,” said Smith.
“Part of the reason why is because in our experience, it works reasonably well with very straightforward submissions but
can easily break down when things get complicated,” Smith said.
Currently, he said, after third-party reviewers submit their assessments to FDA the followup conversations
between the reviewer and FDA may not be fully communicated with the sponsor, causing confusion and complications.
“What this is trying to do is positive, because in many instances in situations like this, it’s very difficult to determine
without submitting a 510(k) notice, whether you really need one,” Smith said. “The 510(k) premarket approval notification system has become increasingly demanding. So basically, there is a lot more involved in obtaining substantial
equivalence than there used to be.”
But Smith said that an accompanying guidance document or a more refined provision is necessary for the bill to advance,
adding that it is unlikely FDA or other lawmakers will let the provision stand as is moving forward. — David Hood
Major Physician Group Joins Group Seeking Drug Price Cuts
The American College of Physicians announced Tuesday (Feb. 3) that it has joined the Campaign for Sustainable Rx
Pricing, a group of insurers, consumer advocates and other stakeholders whose goal is to lower drug prices. The announcement came a day after the Obama administration unveiled a 2016 budget request that repeats its prior calls for
policies to lower drug prices, including a Medicare drug rebate plan that would reduce health care spending by more than
any other of the president’s health care proposals.
ACP says it is the largest medical-specialty organization and second-largest physician group in the United States, but
the largest physician organization, the American Medical Association, is not part of the Campaign for Sustainable Rx
Pricing.
American College of Physicians President David Fleming said specialty drugs accounted for less than 1 percent of
prescriptions in 2013 and more than 25 percent of Medicare prescription spending. By the end of the decade, specialty
drugs will account for about half of Medicare drug spending, according to CVS Health, yet only 2 percent to 3 percent of
prescriptions will be written for specialty drugs.
Pharmaceutical makers say the drugs reduce health care spending by avoiding more expensive hospitalizations and
life-long management of chronic disease, noting that expensive new hepatitis C drugs cure nearly everyone.
However, Democrats in particular criticize the high price of specialty drugs that treat common conditions. Lawmakers typically don’t complain about expensive drugs that treat rare diseases. The Obama Administration has included drugsavings measures in previous budget requests, but this year’s budget includes stronger language.
“The Administration is deeply concerned with the rapidly growing prices of specialty and brand name drugs,” states
the HHS budget in brief. — John Wilkerson
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President’s Budget Tracks With House Push For Pharmacy Lock-In Polices
Falling in line with the House Energy & Commerce Committee’s 21st Century Cures draft, President Barack Obama’s
fiscal 2016 budget for the first time includes a proposal to lock Medicare beneficiaries at a high risk of substance abuse
into certain pharmacies or prescribers to cut down on drug abuse, and some following the issue say given the bipartisan
and administrative support the issue is not expected to go away any time soon.
Beneficiary lock-in programs are used in commercial and Medicaid plans, and Cindy Reilly, director of PEW
Charitable Trusts’ prescription drug abuse project, says the group is pleased there is interest in expanding these programs
to Medicare Part D. Lock-in programs, or “safe pharmacy networks,” allow for plans to restrict beneficiaries deemed high
risk to a certain pharmacy or pharmacies and to one or more prescribers for drugs that could be abused, like opioids.
HHS’ budget-in-brief says that while HHS already requires Part D sponsors to conduct drug utilization reviews and
see which prescriptions are filled by certain beneficiaries, there isn’t much the agency can do on a preventative basis with
that information.
“These efforts can identify overutilization that results from inappropriate or even illegal activity by an enrollee,
prescriber, or pharmacy. HHS’s statutory authorities to take preventive measures in response to this information is
limited,” HHS’ budget brief says.
HHS’ budget-in-brief says its proposal would be similar to many state Medicaid programs and would make sure
beneficiaries have access to quality services.
Former CMS Medicare chief Jon Blum also expressed interest in a beneficiary lock-in policy a few years ago,
but this is the first time such a policy has been included in the president’s budget, one beneficiary advocate noted. The
proposal is not expected to cost anything over the next 10 years.
The president’s proposal follows the inclusion of a similar lock-in proposal in House Ways & Means health subcommittee Chair Kevin Brady’s (R-TX) Medicare program integrity bill introduced late last session. Ways & Means ranking
Democrat Jim McDermott (WA), who sponsored the bill despite reservations, said the legislation would serve as a
platform for further work this Congress.
Another beneficiary lock-in proposal was included in House Energy & Commerce Chair Fred Upton’s (R-MI)
recently released 21st Century Cures draft.
The Pharmaceutical Care Management Association said last month that enacting these beneficiary lock-in programs
in Medicare is a priority for pharmacy benefit managers in 2015, and the group says it is encouraging that support for a
beneficiary lock-in policy is increasing.
Reilly said PEW, which recently asked Congress’ Medicare payment advisers to consider recommending such a
policy, is also encouraged by the support in the president’s budget. She added that PEW is still evaluating Brady’s bill and
the 21st Century Cures draft for the best way to balance reducing drug abuse by high-risk beneficiaries and beneficiaries
access to these medications for legitimate purposes. But Stacy Sanders, federal policy director at the Medicare Rights
Center, says Brady’s bill includes more developed beneficiary protections than the 21st Century Cures draft. She said
Brady’s bill also gives clearer direction to the agency regarding stakeholder involvement.
Beneficiary advocates expressed some concerns over the draft of Brady’s bill, and the version introduced in December was a significant improvement over the draft bill, one beneficiary advocate said.
Sanders said lock-in policies are only one of many solutions around Medicare beneficiary abuse of prescription drugs
that should be considered. The Medicare Drug Integrity Contractor should also be strengthened, and there needs to be
more communication between the pharmacies and the MEDICs, Sanders said, as well as enhanced data sharing to help
combat the problem. — Michelle M. Stein
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17
Stakeholders Worry FDA LDT Oversight Will Impose Large Costs On Labs
Personalized medicine and laboratory stakeholders have raised concerns to FDA that the proposed framework
for laboratory-developed tests will impose large costs on labs, following comments at a public workshop last month
that FDA should consult CMS and payers as it moves forward. Some stakeholders are also concerned about the
effect FDA’s oversight will have upon public laboratories, which don’t produce LDTs for-profit, according to a
group’s comments.
FDA revealed last year proposed requirements that would apply the agency’s medical device risk-based classification system to LDTs under a nine-year implementation timeline. The draft guidance has since received pushback
from lab stakeholders that argue FDA’s proposal would duplicate CMS’ authority over labs and be overly burdensome.
The Personalized Medicine Coalition pushed for, at the least, a second draft of FDA’s framework to provide additional information on risk classification, harmonization between the CMS’ Clinical Laboratory Improvement Amendments
program and FDA, how technical test modifications would be handled, and labeling issues.
“FDA regulation will cost laboratories money,” states the group. “They will have to focus attention on educating their
current workforce on FDA regulations, hire new staff or cut back their menu of testing services to lower their regulatory
burden. All of these expenses, coupled with the user fees that will one day be imposed, raise the cost of diagnostic tests.
Yet the laboratory industry has been decimated by recent changes in coverage and payment policies by both the public
and private health plans.”
PMC Executive Vice President Amy Miller floated an idea at the public workshop last month to include
payers on FDA’s advisory panel, an idea also backed by AdvaMedDx, the diagnostic division of the Advanced Medical
Technology Association.
“[A]lthough obviously FDA’s purview does not directly go to the considerations of coverage and payment, payers are
looking to FDA’s review for information to help them make decisions, and I think that’s come out clearly in some of the
payers that have weighed in favor of FDA action in this area because they are looking for you to play that role,” said
AdvaMedDx executive director, Andrew Fish.
This also falls in line with a call by Katherine Tynan, president of Tynan Consulting LLC, for FDA to use its influence with CMS and HHS over issues of reimbursement.
“I urge FDA to recognize this is a significant unfunded mandate for laboratories,” she said at the public meeting.
“You should use your influence to raise the issue with CMS and the HHS Secretary. Laboratories are under
huge financial constraints, and this has been exacerbated by poor reimbursement for many tests. You should use
your position to lead the conversation with HHS and other payers as to why they should pay for quality if you move
forward with this.”
The American Association for Clinical Chemistry added to the voices of concern in comments submitted to FDA,
saying that adding another federal agency in the oversight of LDTs will add to the burden and costs of performing these
tests, “possibly resulting in many laboratories discontinuing tests.”
The Association of Public Health Laboratories also said the LDT framework would likely cause problems for
government public health laboratories. The group notes that part of FDA’s rationale for increased oversight for these tests
is that business models for laboratories have changed and LDT manufacturers are now large corporations.
“This is an instance where FDA has written the regulatory framework directed towards a specific entity to address a
specific problem, yet the implications are broad, cross cutting, inappropriate and unfounded for the wider audience that
will ultimately be affected by the regulation,” the group says.
APHL further states that the framework will cause severe and unintended consequences to public health if
public health labs were not provided flexibility under the framework. The group points out that public health labs do
not manufacture LDTs for sale or profit and instead rely on federal and state funding sources.
“It is unreasonable to believe that public health laboratories will be able to pursue LDT premarket review with their
limited resources if for-profit manufactures do not have the means to clear extragenital specimens through the 510(k)
process,” says the group. “Additionally, the Unmet Needs enforcement discretion category will not provide flexibility to
public health laboratories, because FDA’s proposed definition of a healthcare system excludes governmental laboratories.” — Erin Durkin
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FDA Week - www.InsideHealthPolicy.com - February 6, 2015