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H E A L T H C A R E

Drug Approval Trends at the FDA andEMEAProcess improvements, heightened scrutiny and industry

response

By Alison Sahoo


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Alison Sahoo

Alison Sahoo is a pharmaceutical industry analyst with more than 10 years of

experience researching the development of medicines and medical devices. She holds a

B.S. in Physics from McGill University and an M.B.A. in International Business from

Rutgers University.

Copyright 2008 Business Insights LtdThis Management Report is published by Business Insights Ltd. All rights reserved.Reproduction or redistribution of this Management Report in any form for anypurpose is expressly prohibited without the prior consent of Business Insights Ltd.

The views expressed in this Management Report are those of the publisher, not ofBusiness Insights. Business Insights Ltd accepts no liability for the accuracy orcompleteness of the information, advice or comment contained in this ManagementReport nor for any actions taken in reliance thereon.

While information, advice or comment is believed to be correct at the time ofpublication, no responsibility can be accepted by Business Insights Ltd for itscompleteness or accuracy.

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Table of Contents

Drug Approval Trends at the FDA, EMEA

Executive Summary 10

The shifting regulatory landscape 10

Drug approval trends at FDA 11

Drug approval trends at EMEA 12

Industry response 13

Global drug approval trends through 2012 14

Chapter 1 The shifting regulatory landscape 18

Summary 18

Drug usage in the U.S. and Europe 19

New molecular entities 20

Generic drugs 21Rising usage of generics 21Generic drug application trends 22

Indication expansions 23

Drug approval issues 26

Ensuring drug safety 27

Safety shortfalls: rising adverse drug reactions 29Safety failures: drug withdrawals 30

The importance of time to market 31Impact of cost constraints 34

Conclusion 35

Chapter 2 Drug approval trends at the FDA 38

Summary 38

Drug approval process 39Pressure to approve drug candidates 42

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Future directions in the FDA drug approval process 43Ensuring drug safety 44Evolution of drug safety testing 44Pediatric safety testing 48

Future directions in drug safety reviews 49Reducing time to market 50Fast track approvals 52Orphan drug approvals 53Decreasing FDA drug approvals 54

Future directions in speeding drug approvals 56

Delaying risky applications 58Rising data requirements 58

Case study: hormone replacement therapy 59Case study: Galvus 60

The future for risky drug applications 62

Biosimilars 62

The future of biosimilar approvals 62Canadian biosimilars legislation 63

Rx-to-OTC switches 64New OTC drug categories 66

Antihistamines 67Emergency contraceptives 69Hyperosmotic laxatives 71Ophthalmic allergy medications 72Proton pump inhibitors 73Weight loss medications 75

Switch rejections 76Statins 77

Future directions in nonprescription drug approvals 78Creation of a pharmacist dispensed class 79

Marketing withdrawals 80

Application withdrawals 81Future directions in marketing and application withdrawals 82

Conclusion 82

Chapter 3 Drug approval trends at theEMEA 86

Summary 86

Drug approval process 87History of European drug regulation 87The formation of the EMEA and the MRP 88

The EMEA 89

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The Mutual Recognition Procedure (MRP) 91The National Competent Authorities 93The Common Technical Document 93Ensuring drug safety 96

Creation of Scientific Advisory Groups 97Future directions in drug safety testing 98Reducing time to market 98Accelerated opinions 100Pediatric testing exemptions 101Decreasing EMEA approvals vs. FDA approvals 101Current EMEA approval levels 104Future directions in speeding drug approvals 104

Delaying risky applications 105The future for risky drug applications 106

Biosimilars 107New biosimilar guidelines 107Future directions in biosimilar approvals 108

Rx-to-OTC switches 109Future directions in nonprescription drug approvals 110

Marketing withdrawals 110

Application withdrawals 110Future directions in marketing and application withdrawals 112

Conclusion 112

Chapter 4 Industry response 114

Summary 114

Background 115

Improving safety testing 115Genomics 116Stem cell approaches 117Future drug safety testing improvements 118

Raising investment in R&D 118Improving R&D productivity 119

Contract research organizations 119Repositioning 121

Future directions in R&D investment 122

Public reporting of clinical study results 123United States 123Europe 124Association of the British Pharmaceutical Industry 125

Future directions in clinical data reporting 126Strengthening regulatory processes 126

Coalition for a Stronger FDA 126

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Future directions in regulatory support 127

Conclusion 128

Chapter 5 Global drug approval trends to2012 130

Summary 130

Background 131

Trends at the FDA 132Focus on drug safety 132

New technology-based standards for drug application review 133

Decreasing application review times 135Boosting integrity and accountability 136

Trends at the EMEA 137Focus on drug safety 138Product Information Management (PIM) Project 139Cooperation with other regulators 140Incentives for small drug developers 140

Convergence of regulatory approaches 141

Orphan drug approvals 143

Conclusion 144

Chapter 6 Appendix 146

Index 146

List of FiguresFigure 1.1: Drug safety risk spectrum 28Figure 1.2: Growth in U.S. reported adverse drug reactions, 1995 - 2007 30Figure 1.3: U.S. R&D spending versus new drug approvals, 1995 2007 36Figure 2.4: U.S. drug approvals, 1995 - 2007 55Figure 3.5: Average number of days for centralized procedure positive opinions, 2004 - 2006 99Figure 3.6: Average number of days for orphan drug designation opinions, 2004 - 2006 100Figure 3.7: EMEA marketing withdrawals, 2000 - 2007 111

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List of TablesTable 1.1: Selected indication expansions for U.S. commercialized drugs, 2002 - 2007 25Table 1.2: Potential safety risks of popular drug classes 29Table 1.3: Significant drug discontinuations and affected patient groups, 1997 - 2007 33Table 2.4: Timeline of key FDA legislations 45Table 2.5: CDER Advisory Committees, 2008 48Table 2.6: U.S. New Molecular Entity (NME) Approvals, 2000 - 2007 56Table 2.7: Key U.S. Rx-to-OTC switches, 1997 - 2007 66Table 2.8: Key events in the approval of OTC nonsedating antihistamines 69Table 2.9: Recent withdrawals of U.S. marketing applications, 2002 - 2007 82Table 3.10: Leading European National Competent Authorities, 2008 94Table 4.11: U.S. Clinical trials and R&D spending, 2000 - 2007 118Table 4.12: Selected repositioning specialists 122

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Executive Summary

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Executive Summary

The shifting regulatory landscape

In both the U.S. and Europe, the utilization of Rx medicines, including both generic

drugs and new molecular entities, is rising strongly.

Increasing use of medications carries safety risk. Inherent drug risks are generally

related to toxicity and the pharmacokinetic properties of the drug itself.

Drug safety risks run the gamut from minor discomforts such as the nausea

associated with many classes of medications to life-threatening conditions like

increased risk of liver toxicity caused by cholesterol-reducing statins.

Over the past five years, the incidence of adverse drug reactions reported in both

the U.S. and Europe has risen sharply.

Marketing withdrawals may be required for drugs that have been associated with a

significant level of extremely adverse effects. The most significant market

withdrawal to date has been Mercks Vioxx, which was recalled in September 2004

after more than 80m prescriptions had been written for the drug worldwide. The

drug was linked to an increased risk of cardiovascular effects, with one study

showing that patients taking Vioxx were twice as likely to have a heart attack as

those taking naproxen.

Mercks withdrawal of Vioxx has galvanized public scrutiny of drug approval

processes, causing regulators, particularly the FDA, to exercise more caution in

approvals.

As more blockbuster drugs lose patent protection and R&D productivity continues

to decline, minimizing time to market for new drugs is becoming increasingly

important. However, approval delays can lengthen time to market.

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While both the FDA and EMEA are attempting to reduce approval times, largely

through expansion of fast track programs, delays remain common, as regulators

attempt to verify the safety of increasingly complex products.

Expanding R&D activities to ensure that compounds submitted for approval

represent only the best possible candidates might improve approval rates and times,

but the high and rising cost of R&D continues to constrain such expansion.

Drug approval trends at FDA

Although FDAs drug approval process has come under heavy scrutiny since the

market withdrawal of Mercks Vioxx in 2004, allegations of undue pressure on

reviewers to approve new medicines date to well before this time. The FDA is

responding with a renewed effort to foster a culture of integrity from the top down.

Incentives to increase the pediatric data available on drugs used by children have

resulted in updated pediatric labeling for more than 120 drugs.

Officially, the FDA has not changed its overall standards for drug approval in many

years. On case by case basis, however, the agency appears to be requiring more

data to verify safety.

To provide speedier approval for certain drugs that address unique needs, the FDA

has established three categories within which applications will be reviewed on a

shorter timetable: Fast Track, Accelerated Approval and Priority Review.

Under the Orphan Drug Act, nearly 1,700 medicines have been designated orphan

drugs, and 249 have been approved for use.

Despite ongoing attempts by FDA to increase the availability of medicines, there

has been no real improvement in overall drug approvals since 1995.

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While the number of clinical trials conducted in the U.S. continues to rise, the

number of new molecular entities approved each year has declined since 2004.

FDA is attempting to reduce approval times for generic medicines and is

increasingly switching Rx products from classes not previously available over-the-

counter to nonprescription use.

FDA is asking for more data pursuant to applications for drugs that pose heightened

safety concerns.

While the EMEA has recently established an approval pathway that clarifies the

regulatory process by which biosimilars can be approved, the FDA has not yet

established such a process.

Drug approval trends at EMEA

The EMEA is currently putting systems in place for a more effective centralized

procedure with a role comparable to that of the U.S. FDA. However, budgetary

concerns will constrain development.

In Europe as in the U.S., increasing reports of adverse drug reactions, expanding

usage of products obtained over the Internet and associated issues with

counterfeiting are creating imperatives for heightened drug safety testing.

To provide greater oversight for all products during both the approval and post-

marketing periods, the EMEA created a set of Scientific Advisory Groups in 2006.

The EMEA has not recently made substantive official changes to its overall

standards for drug approval. On case by case basis, however, European regulators

appear to be exercising more caution in granting approvals, particularly requiring

sufficient data to confidently verify drug safety.

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In an effort to bring needed medicines to market more quickly, the EMEA has been

attempting to reduce the time it spends reviewing marketing applications. After a

slight increase in overall review time in 2005, review times were significantly

reduced in 2006 for centralized procedures.

In July 2006, the EMEA implemented a new review system to speed the approval

of innovative drugs that respond to unmet medical needs or constitute a significant

improvement over available methods of prevention, diagnosis or treatment.

To streamline drug testing and eliminate the collection of unnecessary clinical data,

the EMEA has relaxed requirements for pediatric trials for certain products.

Despite improvements in processing speed and volume, the EMEA is reportedly

approving fewer products than the FDA.

In its approach to biosimilars, the EMEA has a significantly more comprehensive

approval structure in place than the FDA and in fact, Europe is quickly becoming

the global center for the development and production of biosimilar medicines.

Industry response

Pharmaceutical and biotech companies continue to work aggressively, both

separately and together, to improve drug development processes.

Several new technologies are emerging to help identify toxicity early in drug

candidates, including genomics and stem cell approaches.

One of the simplest, albeit least desirable, means to address rising data requests

from regulators and increasing standards for approval is for drug makers to raise

their investments in R&D. This has, in fact, occurred, with the number of U.S.

clinical trials expanding by 6.9% per year from 2000 to 2007 and U.S. R&D

spending increasing by 13.2% annually.

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One of the most significant ways in which drug makers have, and continue to,

achieve R&D productivity improvements has been through the utilization of CROs.

Overall, CROs are able to shorten clinical testing times by as much as 30%, thereby

leading to faster drug approvals. This has led to rising usage of CRO services, with

global CRO revenues estimated at $16b in 2007 and continuing to grow by roughly

10% per year.

Over the past two years, the pharmaceutical industry has embraced repositioning,

a systematic new means to analyze an entire library of failed experimental

compounds to identify new therapeutic applications.

Industry groups are seeking greater transparency of clinical trial results in an effort

to self-police the industry and thereby proactively prevent potentially more

restrictive requirements from the FDA or Congress. In both the U.S. and EU, new

clinical trial databases have been established to provide details of drug testing

results.

On the theory that a stronger regulator can more effectively, and more quickly,

process drug approvals, industry groups are banding together to call for increasedfunding for regulators.

Global drug approval trends through 2012

In recent years, drug safety regulators worldwide have become more cautious of

new products in response to heightened public scrutiny. This trend is expected to

continue through the foreseeable future.

The FDAs Strategic Action Plan specifically notes that protecting U.S. consumers

from unsafe medical products is its first and foremost responsibility, implying

that speeding drug approvals is of secondary importance.

A key component of the FDAs approach to ensuring drug safety through the

approval process is likely to be increased requests for additional data to supplement

marketing applications as well as post-marketing data.

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New molecular entities (NMEs) are expected to be a key focus of the FDAs

heightened interest in safety.

The FDA is attempting to reduce its approval times through innovative new

technology and training initiatives.

While drug safety is also a key concern for the EMEA, the agency is also focused

on expanding access to drugs and innovation.

In 2006, the first marketing authorization application using the EMEAs new

electronic PIM system was submitted.

The EMEA has recently implemented legislation aimed at promoting innovation

and development of new medicinal products by small and medium sized enterprises

(SMEs).

As globalization continues throughout the pharmaceutical, healthcare and other

industries, the FDA and EMEA are increasingly sharing information about new

drug candidates and adopting similar approaches to address issues that jointly affect

their respective constituents.

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CHAPTER 1

The shifting regulatorylandscape

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Chapter 1 The shifting regulatorylandscape

Summary

In both the U.S. and Europe, the utilization of Rx medicines, including both

generic drugs and new molecular entities, is rising strongly.

Increasing use of medications carries safety risk. Inherent drug risks are generally

related to toxicity and the pharmacokinetic properties of the drug itself. Drug safety risks run the gamut from minor discomforts such as the nausea

associated with many classes of medications to life-threatening conditions like

increased risk of liver toxicity caused by cholesterol-reducing statins.

Over the past five years, the incidence of adverse drug reactions reported in both

the U.S. and Europe has risen sharply.

Marketing withdrawals may be required for drugs that have been associated with

a significant level of extremely adverse effects. The most significant market

withdrawal to date has been Mercks Vioxx, which was recalled in September

2004 after more than 80m prescriptions had been written for the drug worldwide.

One study showed that patients taking Vioxx were twice as likely to have a heart

attack as those taking naproxen.

Mercks withdrawal has galvanized public scrutiny of drug approval processes,

causing regulators, particularly the FDA, to exercise more caution in approvals.

As more blockbuster drugs lose patent protection and R&D productivity

continues to decline, minimizing time to market for new drugs is becomingincreasingly important. However, approval delays can lengthen time to market.


through expansion of fast track programs, delays remain common, as regulators

attempt to verify the safety of increasingly complex products.

Expanding R&D activities to ensure that compounds submitted for approval

represent only the best possible candidates might improve approval rates and

times, but the high and rising cost of R&D continues to constrain such expansion.

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Drug usage in the U.S. and Europe

As the populations of the U.S. and Europe continue to age, their utilization ofprescription medicines is rising. While persons in their 20s use just two prescriptions

per year, on average, adults ages 65 to 69 have 14 prescriptions filled per year, and

those ages 80 to 84 have about 18 prescriptions filled per year, according to U.S.

Pharmacist. These medicines address a variety of conditions, many of which are age-

related, including high cholesterol, hypertension, arthritis, insomnia, etc. At the same

time, obesity continues to rise with approximately two thirds of the U.S. and European

populations overweight in early 2008 and one third obese. As excess weight is also

associated with a range of medical conditions including cardiovascular issues, diabetes,

gastrointestinal issues, etc., prescription drug usage in this population is similarly

rising. The proliferation in lifestyle drugs, such as erectile dysfunction medicines,

smoking cessation aids, etc., has further fueled the boom in prescription drug usage. By

the end of 2007, average U.S. per capita usage of prescription drugs had risen to more

than 13 prescriptions annually, compared with about 7 in 1992. Trends in Europe are

similar.

Together, the U.S. and Europe jointly comprise roughly 75% of the total global Rx

drug market. In 2007, total market sales reached roughly $690m, up 6.5% from the

prior year. In 2008, sales are expected to slow slightly but nonetheless post healthy

gains of 5% to 6%. This strong and continued expansion in the usage of prescription

medicines has given new importance to the processes by which drug candidates are

reviewed and approved for use.

In general, regulators in the U.S. and Europe are charged with the review of three types

of prescription drug products:

New molecular entities;

generic drugs, which are based bioequivalent to previously approved products;

previously approved drugs seeking expansions of their original indications.

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As discussed in the subsections below, each of these drug candidates poses different

types of challenges and is therefore subject to different approval trends. Because the

greatest gains are to be earned from new molecular entities, and therefore most drug

spending is focused on novel compounds, this report will center on approval trends for

these products with only a peripheral discussion of generic approvals and indication

expansions.

New molecular entities

New molecular entities represent novel compounds that are submitted to regulators for

the first time. In the U.S., drug makers file a New Drug Application (NDA) with the

FDA, while in Europe, applicants file similar documents either with individual national

regulators or centrally through the mutual recognition procedure (MRP). In all cases,

the goal of the review process is to provide sufficient information to establish that:

The drug is safe and effective for its proposed usage, with benefits outweighing

risk;

the drugs proposed labeling is appropriate;

the methods used to manufacture the drug and maintain quality are adequate.

This process is particularly important since new molecular entities increasingly address

complicated conditions with highly sophisticated science. Applications typically

contain tens, and sometimes hundreds, of thousands of pages and detail the results of

animal studies, human clinical trials, drug formulation, human drug metabolism,

manufacturing, processing and packaging. Biologic products, such as vaccines and

many recombinant proteins, are approved by FDA via a Biologic License Application

(BLA), rather than an NDA. Manufacture of biologics is considered to differ

fundamentally from that of less complicated chemicals, requiring a different approval

process.

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Generic drugs

Generic drugs are essentially copies of products that have previously been approved.

They are generally introduced when the patent on the original drug expires or is found

to be invalid. Generics may be introduced by the developer of the original drug, but are

more often launched by specialty generics manufacturers as a means to enter a new

market.

Rising usage of generics

Because generic drug makers need not reproduce safety studies when seeking approval

for product that is bioequivalent to an approved medicine, their R&D costs are

significantly lower and they can therefore introduce products at steep discount to

original drugs. According to the nonprofit Kaiser Family Foundation, for example, in

2006 the average U.S. brand-name prescription cost more than three times the average

generic, at $111 compared with $32.

As health care costs continue to rise, this significant price advantage has resulted in

dramatic growth for the generic industry as generic drug makers aggressively challenge

patents in order to obtain rights to ever more top-selling medicines. In 2008, the global

generic drug market is expected to reach about $80b. Growth is particularly strong in

the U.S., where health care is funded primarily through the private sector. In 2007,

generics accounted for more than half of all prescriptions filled, up from 44.9% in

2003. Virtually all health care plan providers are attempting to contain spending on

prescription drugs, implementing incentives for plan participants to use generics rather

than branded products. This may take the form of step therapy (sequential use of least

expensive medications before more expensive drugs), as a formulary alternative for

which plan participants make the lowest co-payment or in some cases, as the only

medicine in a given therapeutic category that the plan will cover.

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Generic drug application trends

As a result of this rising demand for low cost medicines, generic approval rates

continue to rise. In its 2007 fiscal year, the U.S. FDA approved 683 generic drugs, a

30% increase from its 2006 fiscal year. The agency has said that during 2008, it will

bolster its generic drug program so that it can more quickly process the rising number

of generic drug applications it expects to receive. These Abbreviated New Drug

Applications (ANDAs) may be filed for any molecular entity except biologics, such as

recombinant proteins.

In Europe, health care is largely government funded but the level of generic drug usagevaries considerably with the regulations of each country. Nonetheless, usage of

generics has been rising due to initiatives in France, U.K. and Germany to reduce

government drug spending. This includes, for example, a partial reference pricing

system established in France in 2003 under which branded products off patent are only

reimbursed at the level of the generics, forcing patients to pay the difference for the

branded version. In Germany, a 2003 mandate for aut idem prescription writing

required pharmacists to fill prescriptions with one of the five cheapest generic versions

for all drugs off patent. Branded products can only be used if the physician specifically

indicates not to use a generic. This has resulted in generics accounting for about 40%

market share by volume within a year of launch and nearly 70% within three years.

Over the next five years, more than two dozen drugs with global sales of $500m or

more will lose patent protection, creating significant new product opportunities for

generics manufacturers, and stimulating further growth in generics usage. Key products

that will lose patent protection in one or more major markets worldwide in 2008

include Mercks Fosamax osteoporosis medication, Johnson & Johnsons Risperdal for

schitzophrenia and Topamax for migraine, GlaxoSmithKlines Lamictal antiepileptic

and Abbott Laboratories Depakote for the treatment of bipolar disorder.

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Indication expansions

An indication expansion broadens a drugs usage beyond its original intended use. Theexpanded usage may take a variety of forms, including:

Expanded usage of the drug under more flexible conditions, such as for

monotherapy instead of therapy in combination with another drug;

extension of the drugs original usage to new patient populations, like children

and/or adolescents;

extension of the drugs usage to related indications, such as the approval of an

antibiotic for specific types of infections;

addition of entirely new therapeutic indications, such as treatment of additional

diseases or conditions.

While all of these extensions serve to increase the size of the potential patient

population for the drug, pediatric expansion and particularly the addition of large new

therapeutic indications generally have the most significant effect upon the drugs

usage. They can also serve as an effective means of delaying generic competition, since

regulations in both the U.S. and the E.U. provide some additional protection for drugs

whose usage is extended.

In the U.S., innovator companies are awarded three years of data exclusivity for a

change to a products label that requires clinical trials to be conducted, although

changes to the Medicare Modernization Act of 2003 have limited the opportunity to

generate multiple 30-month stays. Originator companies had historically relied upon

listing patents covering new indications in the Orange Book, thereby forcing generics

manufacturers to make a paragraph IV certification in its Abbreviated New Drug

Application (ANDA), and generating an automatic 30-month stay of approval.

In Europe, manufacturers have long taken advantage of the requirement for generics

companies to use the Mutual Recognition Procedure (MRP) process but also have the

same Summary of Product Characteristics (SmPC) as the listed drug in each market, to

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extend patent protection by filing different indications in different markets. This results

in SmPCs for the listed drug differing between regions and makes it impossible for a

generic to gain approval for the full range of indications in each market via the MRP. A

related action that can delay generic competition, even if SmPCs are harmonized across

markets, is the filing of patents for new indications, which may expire at different times

in different countries. Thus the generic company would be prevented from marketing

the product for a particular indication. This can prevent launch of the product even for

patent expired indications. The mention of a patented indication in the generics

companys marketing authorization (MA) amounts to patent infringement, but

excluding the patented indication can result in difficulties in gaining approval since the

generic SmPC would differ from that of the originator product.

Because of these benefits, indication expansion is a common lifecycle management

strategy, with more than four fifths of the 50 top selling brands in 2007 having had

additional indications approved since their initial U.S launch. Developers of

blockbuster drugs often investigate additional indications particularly usage

expansion to younger patients as a means to extend the products patent life and

delay generic competition. This can give rise to multiple new indications for a single

drug, as shown in Table 1.1.

Often, a manufacturer will obtain information from external sources suggesting a

potential new indication. This may arise from physicians, researchers and others who

notice additional therapeutic benefits from a particular product, as well as similar

competing products that obtain approval for additional indications. When this latter

event occurs, it is not unusual for all the drugs within a particular class to one by one

undergo an indication expansion. This occurred, for example, with Abbotts, Amgens

and Johnson & Johnsons biological response modifiers for treatment of rheumatoid

arthritis. Infectious disease, central nervous system disorders and cardiovascular

disease remain popular areas for new indication expansion, largely due to the high

numbers of patient sub-populations in these areas and the high commercial value of

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Table 1.1: Selected indication expansions for U.S. commercialized drugs, 20

Company Drug Original Indication Expanded Indicatio

Pfizer Lyrica Epileptic seizures Fibromyalgia Pfizer Celebrex Osteoarthritis Juvenile rheumatoid Johnson & Johnson Remicade Rheumatoid arthritis Chronic severe plaquSchering-Plough Avelox Infections Intra-abdominal infeWyeth Effexor Depression Panic attacks Abbott Humira Rheumatoid arthritis Psoriasis Johnson & Johnson Remicade Rheumatoid arthritis Ulcerative colitis Johnson & Johnson Levaquin Infections Bacterial sinusitis Johnson & Johnson Remicade Rheumatoid arthritis Psoriasis Johnson & Johnson Remicade Rheumatoid arthritis Active ankylosing spRoche Xenical Obesity Delay onset of type 2

in obese patients with

Johnson & Johnson Topamax Epileptic seizures Migraines Amgen Enbrel Rheumatoid arthritis Psoriasis Roche Xenical Obesity; patients to age 16 Patients to age 12 Shire Adderall ADHD; pediatric patients ADHD; adults

Novartis Lescol Cholesterol reduction Risk reduction in correvascularization in pcoronary heart diseas

Merck Singulair Asthma Allergies Pfizer Zyrtec Allergies; patients to age 2 Allergies; patients toGlaxoSmithKline Flonase Allergies Non-allergic nasal syAllergan Botox Various medical indications Cosmetic/aesthetic uTAP Pharmaceuticals Prevacid Ulcers and heartburn; to age 11 Patients to age 1

Source: Company news releases and public filings


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Expansion of a drugs usage to pediatric patients is not appropriate for all products,

however, since many of the most widely-used drugs address conditions that are most

prevalent among older persons. These include medications that lower cholesterol,

control hypertension, address various cardiovascular conditions, mitigate depression,

etc.

Some developers employ extensive indication expansion strategies, particularly for

products whose usage can be leveraged to address closely related conditions. For

example, through the end of 2007, Johnson & Johnson had obtained nine U.S.

approvals for new indications for its Remicade, a biological response modifier initially

cleared to market for the treatment of rheumatoid arthritis in 1998 and Allergans

Botox (botulinum toxin) had been cleared for more than 20 different indications related

to muscle-freezing in markets around the world.

Drug approval issues

With the continuing introduction of newer and better drugs that address a broader range

of life-threatening and debilitating conditions, worldwide use of prescription medicines

has soared over the past decade. This has resulted in significant economic and quality

of life benefits. For example, the Organization for Economic Cooperation and

Development estimates that over the past 40 years, new medicines have halved the

number of hospital admissions for a variety of serious conditions including mental

illness, infectious diseases and ulcers. As this has occurred, early infancy diseases have

declined by 80% worldwide, ischemic heart disease has fallen by 68% and

hypertensive heart disease has decreased by 67%. This has a direct dollar benefit, since

for every $1 spent on pharmaceuticals, an estimated $4 is saved on hospital expenses

and other therapeutic procedures.

However, increasing use of medications also carries safety risk. Each year, about

500,000 persons in the U.S. and Europe die from prescription drug reactions. Drug

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safety issues have particularly come into the limelight with the market withdrawals of

several COX-2 inhibitors on new safety information. However, while more

comprehensive drug testing might identify potential problems in new products before

they come to market, such testing will also increase time to market and development

cost. These problems directly impact both drug makers as well as consumers.

Ensuring drug safety

Since the penning of the Hippocratic Oath admonishing doctors to do no harm, the

medical community has long recognized the need to ensure that therapies intended to

help patients do not, in the process, cause them more harm than good. In terms of drug

safety, this imperative results in a continued need to balance access to new life-saving

or life-enhancing therapies with potential safety risks that could result from adverse

reactions. Although these risks may also arise from physician prescribing errors,

pharmacist dispensing errors and/or inadequate patient compliance, this report will

focus on inherent drug safety risks.

Inherent drug risks are generally related to toxicity and the pharmacokinetic properties

of the drug itself. While they can often be managed with appropriate labeling, dosing

and monitoring of use, drugs that demonstrate an unacceptably high risk of adverse

reactions which are believed to be generally unmanageable are disqualified from use.

This usually occurs as soon as the risk is discovered and quantified, preferably early in

the development process before more expensive clinical testing has begun.

Manufacturers generally try to fail early, fail cheap by identifying significant safety

risks early in the testing process. In some cases, the drug is eliminated from

consideration by regulators during their review process and in a relatively small

number of instances, a drug is removed from the market after it has been launched as

new information about its effects come to light. This may occur either in the form of a

voluntary recall by a manufacturer, as when Merck discontinued Vioxx in late 2004, or

upon request by regulators, as FDA subsequently required of Bextra.

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Medications with identified but manageable risks, which comprise the bulk of

prescription drugs sold today, may be approved with expanded labeling requirements

advising patients and healthcare providers of potential safety issues. These may contain

contraindications for use applying to certain patient populations or may require regular

physician monitoring of use. The small number of drugs that have not been associated

with significant or severe side effects are generally not subject to these restrictions.

Figure 1.1shows the spectrum of safety risk along which each drug sits and resulting

restrictions on its use.

Figure 1.1: Drug safety risk spectrum

Generally unsafe

under any

circumstances

Safe under certain

conditions

Generally safe for a

wide population

Few restrictions

Labeling restrictsusage; manufacturer

may recommend

monitoring

Manufacturerdiscontinues testing

or drug not approved

or drug recalled

Increasing safety

Generally unsafe

under any

circumstances

Safe under certain

conditions

Generally safe for a

wide population

Few restrictions

Labeling restrictsusage; manufacturer

may recommend

monitoring

Manufacturerdiscontinues testing

or drug not approved

or drug recalled

Increasing safety

Source: Authors analysis Business Insights Ltd

These safety risks run the gamut from minor discomforts such as the nausea and

headaches associated with many classes of medications to life-threatening conditions

like increased risk of liver toxicity caused by cholesterol-reducing statins. Although in

most cases, the likelihood of serious side effects is quite small, for some groups of

drugs, the risk is higher. These include some very broadly used classes of medications,

such as those that address pain relief, asthma, migraine, osteoporosis, hypertension and

other widespread conditions. Table 1.2 lists some widely used groups of medications

and side effects that have been reported in clinical and post-marketing experience.

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Table 1.2: Potential safety risks of popular drug classes

Drug Class Indication Potential Reactions Safeguard

COX-2 inhibitors Pain relief Risk of stroke, heart attack Expanded labeling,recalls

Statins Cholesterol Liver toxicity Liver testsreduction

NSAIDs Pain relief Ulcers Expanded labeling,contraindications

Bisphosphonates Osteoporosis Gastrointestinal effects Expanded labeling,contraindications

Hormone replacement Symptoms of Cardiovascular effects Expanded labeling,therapy menopause contraindications

Leukotriene receptor Asthma Liver toxicity Expanded labeling,antagonists contraindications,liver

tests

Triptans Migraine Cardiovascular effects Expanded labeling,contraindications

ACE inhibitors Hypertension Renal impairment Expanded labeling,physician supervision

Source: Authors analysis Business Insights Ltd

Safety shortfalls: rising adverse drug reactions

In 2007, the estimated number of adverse drug reactions reported to the FDA from

manufacturers and health care professionals exceeded 500,000, compared with

approximately 150,000 in 1995. As shown in Figure 1.2, this 10.4% annual growth

demonstrates a trend of increasing incidence of dangerous drug side effects.

Although prescription volume has risen over the same period of time, growing from

2.2b prescriptions in 1995 to 3.8b in 2007, adverse reactions are occurring in an

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increasingly larger portion. While 0.007% of all prescriptions produced an adverse

reaction in 1995, by 2007 this proportion had almost doubled to an estimated 0.013%.

Affected populations increasingly include vulnerable groups such as seniors, which are

expanding with the aging of the Baby Boomers.

Figure 1.2: Growth in U.S. reported adverse drug reactions, 1995 - 2007

0

100,000

200,000

300,000

400,000

500,000

600,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

ReportedAdverseDrugEvent

Source: FDA Business Insights Ltd

Safety failures: drug withdrawals

Drug recalls are intended to prevent unsafe drugs from use and may be either

temporary or permanent. Temporary recalls may involve one or a small number of

batches of a particular drug that experience problems in distribution or manufacturing.

These may include a variety of issues such as subpotency, stability data that does not

support a drugs expiration date, dissolution failure, label mix-ups, the presence of a

foreign substance in the product, pH failures or contamination of non-sterile products.

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The vast majority of recalls represent temporary suspensions, with only a small

proportion comprising permanent market withdrawals.

While the number of significant safety-related drug withdrawals is relatively low, at

less than 3% of approved Rx products, many have been very high profile, representing

a large number of users and a high number of associated fatalities or other significant

events. For example, Bayers cholesterol reducing statin, Baycol, was initially

approved in the U.S. in 1997, then recalled in August 2001 following the deaths of 52

patients worldwide. The deaths had been caused by rhabdomyolysis, a muscle ailment

that had been known to be a possible side effect of all statin drugs, however, its

incidence had been much higher and more serious among Baycol patients than among

other statin users. Between 1997 and 2001 the drug was prescribed for more than 6m

patients worldwide.

Table 1.3shows significant Rx drug discontinuations that have occurred since 1997. In

general, most of these withdrawals occurred on a worldwide basis, with a withdrawal in

one market followed by withdrawals in other global markets. The most significant

market withdrawal to date has been Mercks Vioxx, which was recalled in September

2004 after more than 80m prescriptions had been written for the drug worldwide since

its introduction in 1999. The drug had been linked to an increased risk of

cardiovascular effects, with one study showing that patients taking Vioxx were twice as

likely to have a heart attack as those taking naproxen.

The importance of time to market

As more blockbuster drugs lose patent protection and R&D productivity continues to

decline, minimizing time to market for new drugs is becoming increasingly important.

As of early 2008, an unprecedented number of blockbuster drugs have lost patent

protection and become subject to competition from low priced generics, slowing the

double digit growth the pharmaceutical industry had experienced previously. From

2000 to 2005, for example, the compound annual growth rate (CAGR) for global

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32

blockbuster revenues was almost 20% and comprised nearly a third of a typical

blockbuster marketing companys total revenues, on average. For some companies,

including Merck, Pfizer and Amgen, blockbusters comprise more than half of total

sales. However, when low cost generic competition arises, sales of cannibalized drugs

fall by up to 80%, putting substantial pressure on drug makers to replace this lost

revenue with sales from new products.


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33

Table 1.3: Significant drug discontinuations and affected patient groups, 19

Drug Manufacturer Use Recall Date Reason

Zelnorm Novartis IBS March 2007 Cardiovascular effects

Bextra Pfizer Pain April 2005 Cardiovascular effects

Vioxx Merck Pain September 2004 Cardiovascular effects

Baycol Bayer Cholesterol August 2001 Fatal rhabdomyolysis

Raplon Organon Pain March 2001 Deaths from bronchospasm

Lotronex GlaxoSmithKline IBS November 2000 Ischemic colitis

Propulsid Johnson & Johnson Heartburn March 2000 Fatal heart rhythm disturbances

Rezulin Pfizer Diabetes March 2000 Fatal liver toxicity

Raxar GlaxoSmithKline Infection October 1999 Fatal heart rhythm disturbances

Duract Wyeth Pain June 1998 Fatal liver toxicity

Posicor Roche Hypertension June 1998 Fatal drug interactions

Redux Wyeth Weight loss September 1997 Fatal heart valve damage

Source: Company news releases and public filings


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However, approval delays can lengthen time to market. For potential blockbuster

drugs that address large markets of chronic disease sufferers such as high cholesterol,

hypertension or diabetes patients, excess time spent in testing results in significant lost

sales. This further exacerbates financial pressure, since each day that a blockbuster

drug with sales of $1b per year is delayed to market costs nearly $3m in sales.

Approval delays also extend the time consumers must wait for needed medicines. In

the U.S. and Europe, 10 to 15 years are typically required to take a drug from the

laboratory through regulatory approval. Up to 6 years of this may be spent in pre-

clinical testing, another 2 years may be devoted to Phase I evaluation, 3 years may be

needed for Phase II testing and an additional 4 years may be necessary for Phase III

studies. Pre-clinical studies include toxicology and other safety studies, conducted both

in vitro and in animal models. Phase I studies evaluate drug safety, determine safe

dosage ranges and identify side effects in small human groups of 20 to 80 volunteers.

Phase II tests measure effectiveness and further evaluate safety in large groups of 100

to 300 patients. Phase III trials confirm effectiveness, monitor side effects and compare

the drug to other commonly used treatments in large patient groups of 1,000 to 4,000 ormore individuals. During this process, many drug candidates are eliminated of as

many as 10,000 initially screened compounds, 250 enter pre-clinical testing, 5 enter

clinical evaluation and just one is finally approved.


through expansion of fast track programs, delays remain common, as regulators attempt

to verify the safety of increasingly complex products. For example, while the FDA has

decreased average approval time from 16.6 months in 1995 to 11.5 months in 2006,

approval times increased during four of these 11 years. These trends are examined in

more detail in Chapters 2 and 3.

Impact of cost constraints

While expanding R&D activities to ensure that compounds submitted for approval

represent only the best possible candidates might theoretically improve approval rates

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and times, the high and rising cost of drug development continues to constrain such

expansion.

In 2007, drug developers worldwide spent an estimated $120b on drug development,

up from about $2b in 1980. This includes pre-clinical, Phase I, II and III clinical

testing. While a new drug cost on average $138m to take from conception to FDA

approval in 1975, the average development cost had risen to $1b by 2007, outpacing

inflation by more than 250%. In the U.S. alone, R&D spending has risen from $4b in

1985 to $55b in 2006, according to the Pharmaceutical Research and Manufacturers

Association of America (PhRMA). This is the result of several factors including

increasing regulatory requests for more study data, more complicated science and more

complex disease targets.

Such rising expenditure on R&D would not be as troublesome if the number of new

drugs were rising. However, this is not the case. As shown in Figure 1.3, although

R&D spending has consistently increased over the past decade, the number of new

drug approvals continues to fluctuate with no apparent relationship to spending.

Conclusion

In both the U.S. and Europe, recent marketing withdrawals have led to a heightened

focus on drug safety, which in turn has impacted drug approval numbers and times.

Although these considerations are not new, the intensity of public scrutiny, to a certain

extent, is. This has created a new operating environment, in which regulators

increasingly weigh the risks of new product against its benefits. When these risks

cannot be adequately understood, regulators do not hesitate to request more data to

validate or refute conclusions. This, in turn, is contributing to a rise in the size and

number of clinical trials as well as overall research budgets.

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Figure 1.3: U.S. R&D spending versus new drug approvals, 1995 2007

0

20

40

60

80

100

120

140

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Number

0

10

20

30

40

50

60

70

$b

Number of approvals R&D expenditure

Source: FDA, PhRMA Business Insights Ltd

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CHAPTER 2

Drug approval trends at theFDA

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Chapter 2 Drug approval trends at theFDA

Summary


market withdrawal of Mercks Vioxx in 2004, allegations of undue pressure on

reviewers to approve new medicines date to well before this time. The FDA has

renewed effort to foster a culture of integrity from the top down.

Officially, FDA has not changed its standards for drug approval in many years.

On case by case basis, however, FDA appears to require more data to verify

safety.

To provide speedier approval for certain drugs that address unique needs, the

FDA has established three categories within which applications will be reviewed

on a shorter timetable: Fast Track, Accelerated Approval and Priority Review.

Incentives to increase the pediatric data available on drugs used by children have

resulted in updated pediatric labeling for more than 120 drugs.

Under the Orphan Drug Act, nearly 1,700 medicines have been designated orphan

drugs, and 249 have been approved for use.

Despite ongoing attempts by FDA to increase the availability of medicines, there

has been no real improvement in overall drug approvals since 1995.

While the number of clinical trials conducted in the U.S. continues to rise, the

number of new molecular entities approved each year has declined since 2004.

FDA is attempting to reduce approval times for generic medicines and isincreasingly switching Rx products from classes not previously available over-

the-counter to nonprescription use.

FDA is asking for more data pursuant to applications for drugs that pose

heightened safety concerns.

While the EMEA has established an approval pathway that clarifies the process

by which biosimilars can be approved, the FDA has not yet established such a

process.

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Drug approval process

The U.S. FDAs drug testing and approval process consists of a series of discrete andwell-defined stages, each of which represents an opportunity to disqualify a drug that

exhibits an unacceptable safety profile. Because the expense of testing usually

increases with each stage, developers usually seek to disqualify marginal or borderline

candidates early to minimize spending on products that will fail later. These stages

include:

Submission of a Notice of Claimed Investigational Exemption for a New Drug

(IND);

pre-clinical testing;

Phase I clinical testing;

Phase II clinical testing;

Phase III clinical testing;

submission of a New Drug Application (NDA).

The IND was established by the 1962 Kefauver-Harris Amendment to the Federal

Food, Drugs & Cosmetics Act of 1938, and generally contains all of the scientific

information known about the investigational drug to be studied. After an IND has been

filed with FDA, the sponsor must wait 30 days while FDA reviews the submission. If

the FDA has not contacted the sponsor with questions about the IND filing, the initial

introduction study may begin on the 31st day. In some cases, the drug developer may

request a waiver of this rule, such as for studies of a drug previously approved for a

different indication in a new condition. Since the safety of the drug in humans had

already been established, FDA may allow the new clinical investigations to proceed

immediately, since only efficacy in the new condition must be established.

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Prior to human clinical testing, pre-clinical testing of new drugs generally includes

three types of studies, all of which are performed in animals:

Pharmacology studies that include screening and comparative tests with other drugs

of known potency or activity; these determine what pharmacologic properties a

drug has and which body systems the drug will affect;

toxicology studies;

reproductive and teratology studies; these evaluate the effects of individual drugs

on reproductive activity, fetal development, lactation and postnatal neonatal

development in animals.

Phase I clinical trials involve the administration of the investigational drug to normal,

healthy male volunteers. Females are usually excluded from these trials due to the

possible teratogenic effect of a drug. The purpose of the studies is to determine human

tolerance to increasing single doses as well as multiple doses of the drug. As dosing

approaches the anticipated therapeutic range, blood, urine, and stool samples are

collected to determine the absorption, distribution, metabolism, and excretion (ADME)

properties of the drug and as well as the compounds into which the original drug is

transformed while in the body. An assessment of the rate and extent of a drug's

absorption pattern, called a bioavailability study, is also conducted. This type of study

forms the basis for establishing bioequivalence between two brands of the same generic

drug and can be used in an Abbreviated New Drug Application (ANDA)

demonstrating the bioequivalence of a generic brand of a drug in comparison to a brandname of the same agent. ANDAs are often approved by FDA on the basis of

bioavailability studies alone, saving generic drug makers the costly, time-consuming

safety and efficacy studies required from makers of novel drug therapies.

Following the establishment of a well-tolerated dosing regimen in Phase I studies, an

investigational drug enters Phase II clinical trials. In these studies, the drug candidate is

given to patients who have the condition for which the drug is intended. Phase II tests

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are designed to determine if the tolerated dose range is therapeutically effective and if

any adverse effects occur at an acceptable level of severity and frequency. Initially, the

side effect frequency is determined by comparing the experimental drug to a placebo.

Subsequently, the drug is compared to other active drugs with similar side effect

profiles that may be metabolized in a related manner. The studies, which range from

two weeks to three months, usually include from 200 to 300 volunteers. Shorter term

studies are referred to as early Phase II or Phase IIA studies, while longer studies are

designated late Phase II or Phase IIB studies. Adverse drug effects are analyzed by

organ system (cardiovascular, respiratory, renal, skin, etc.) then assigned a severity

rating (mild, moderate, severe) and the relationship between the reaction and the drug

is assessed as (possible, probable, remote, or definite). In addition, the incidence of

occurrence of the adverse effects is calculated and compared to similar data for patients

who received a placebo. If effectiveness of the drug appears encouraging in relation to

its side effect profile, the drug may be advanced to Phase III clinical investigations.

Phase III clinical studies are similar to Phase II studies, but they generally continue for

a considerably longer period of time so that the full effects of a drug candidate may be

studied and patients long term reactions to the drug examined. This may range from

several months to more than three years. Data on adverse reactions is typically

evaluated for frequency, severity and relationship to the test drug.

The New Drug Application (NDA) contains all of the drugs pertinent safety and

efficacy data that was accumulated during its pre-clinical and clinical testing. It may

consist of hundreds of volumes of data and is submitted to the FDA as evidence of

safety and efficacy of the drug candidate. FDA reviews the submission and either

grants approval of the application, states the application is approvable with the

clarification of certain issues, or tells the NDA sponsor why it has determined that the

NDA is not approvable.

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Pressure to approve drug candidates


market withdrawal of Mercks Vioxx in 2004, allegations of undue pressure onreviewers to approve new medicines date to well before this time.

In 1998, for example, consumer activist group Public Citizen surveyed FDA medical

officers who were the primary reviewers for new drug applications. Of 53 responses,

27 cited instances in which the medical officer thought a drug too dangerous to be

approved but approval occurred over their objection. Seventeen medical officers

categorized the standards of FDA review for safety and efficacy as "lower" or "muchlower" compared to those in existence prior to 1995, and several stated that they had

been instructed by their superiors to censor their reports.

FDA found similar results in its own internal study conducted three years later. In

2001, as FDA turnover rates among scientists and physicians rose, the agency

conducted an assessment of job satisfaction. It found that about one-third of medical

officers did not feel comfortable expressing differing scientific opinions, and a similar

number felt that decisions adverse to a drug were stigmatized within the agency.

Several reviewers said that decisions should be based more on science and less on

corporate interests.

A follow-up study in 2003 by the Health and Human Services Inspector General

indicated that 18% of surveyed FDA physicians and scientists felt pressure to

recommend that drugs be approved for sale despite their reservations about the drugs

safety, efficacy or quality. The report concluded: "Overall, these findings present a

significant warning signal." News reports since the Vioxx recall in September 2004

have cited rising numbers of FDA drug safety officers claiming to have been pressured

to approve products. A study released in July 2006 by the Union of Concerned

Scientists found that about 15% of almost 6,000 FDA staffers polled have been "asked

to inappropriately exclude or alter technical information or conclusions in an FDA

scientific document." In addition, 39% of the 997 respondents stated that the FDA

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wasn't "acting effectively to protect public health." Some FDA staff claim to have been

punished or ignored after voicing concerns about popular medicines. For example,

Rosemary Johann-Liang, former deputy director of the Division of Drug Risk

Evaluation in the Office of Surveillance and Epidemiology at FDA, lost authority to

approve strong safety recommendations after she agreed with a February 2006 review

that recommended a black box warning for GlaxoSmithKlines diabetes medication,

Avandia.

Future directions in the FDA drug approval process

The FDA has taken these cumulative allegations seriously, responding with a renewed

effort to reduce pressure on drug reviewers and foster a culture of integrity from the top

down. In addition to the practical goals of improving the dissemination of drug safety

information to the public, FDAs Fall 2007 Strategic Plan specifically calls for the

cultivation of a culture that promotes transparency, effective teamwork, and mutual

respect, and ensures integrity and accountability in regulatory decision making. This

encompasses the application of methods of scientific analysis with consistency,

uniformity, and integrity with decision processes that are transparent and open to

scrutiny, allowing for diverse points of view and vigorous debate.

To achieve these goals, the Strategic Plan states that FDA will undertake the following

specific actions throughout 2008:

Develop FDA Core Values Statement: FDA Workplace Culture Initiative Co-

Chairs will develop an FDA values statement, based on survey and focus group

input of staff throughout the agency, to serve as guiding principles for agency

operations. New FDA culture initiatives and the draft Values statement was

presented at an All-Hands Broadcast by the FDA Commissioner in September

2007.

Develop FDA Teamwork Best Practices: The Office of Commissioner will

coordinate a process to identify, document and share best practices that have been

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developed by centers and offices across the agency. This will result in a reference

list that will be compiled and shared with center and office managers.

Strengthen FDA Advisory Committees: To ensure that the public has confidence in

the integrity of advisory committee recommendations, the FDA has taken a variety

of steps to increase the information about advisory committees that is made

available to the public. It will also finalize guidance on advisory committee

conflicts of interest.

Given the severity of the drug safety issues that have been raised over the past several

years, these initial steps are likely to be followed with further actions to increase the

transparency of drug safety information and further reduce internal pressures to

approve new medicines.

Ensuring drug safety

Drug safety is the primary mission of the FDAs Center for Drug Evaluation and

Research (CDER). This group has evolved over time to address increasingly

complicated technological, scientific and marketplace issues.

Evolution of drug safety testing

Drug safety testing has been an ongoing process, with a large number of laws enacted

to strengthen FDAs oversight powers. Key developments are presented in Table 2.4.

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Table 2.4: Timeline of key FDA legislations

Event Impact

Food & Drugs Act of 1906 Required drug purity

Formation of the Food, Drug, Early framework of FDA establishedand Insecticide Administration (1927)

Re-naming of the Food and Drug FDA formally renamedAdministration (1931)

Federal Food, Drugs & Cosmetics Act of 1938 Required safety and efficacy testing of allmarketed drugs

Kefauver-Harris Amendment of 1962 Required extensive animal pharmacological

and toxicological testing before a drug couldbe tested in humans

Federal Advisory Committee Act of 1972 Prescribed the formal use of advisorycommittees throughout the federal #government including the FDA

Food and Drug Administration Modernization Gave manufacturers a period of marketAct (FDAMA) of 1997 exclusivity on drugs that they agreed to testin

children


Although a variety of laws were in place to protect consumers prior to 1906, these did

not specifically address drugs or medicinal products. Therefore, the environment prior

to the turn of the century was largely unregulated and characterized by many types of

products making unsubstantiated claims. This slowly began to change with the 1906

passage of the Food & Drugs Act, the 1927 formation of the Food, Drug, and

Insecticide Administration (renamed the Food and Drug Administration in 1931) andthe 1938 passage of the Federal Food, Drugs & Cosmetics Act. This latter law, which

prohibited the manufacture and interstate shipment of adulterated and misbranded

foods and drugs, represented a major step forward and laid the foundation for the

U.S.s present system of drug regulation. The 1906 Act, which addressed only the

purity of drugs, did not require that either safety or efficacy be established prior to

marketing. This was adequate during the period from 1906 through the mid 1930s,

since few new drugs were developed and marketed.

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The Federal Food, Drugs & Cosmetics Act of 1938, however, required proof of both

safety and efficacy. It followed the death of more than 100 people, many of them

children, who had taken a new sulfa drug called Elixir Sulfanilamide. The solvent used

in the untested product was a highly toxic chemical analog of antifreeze. Under the new

FDCA, toxicity studies of new drugs were required prior to marketing, and the active

ingredients in the approved product had to be listed on the label. Also, a New Drug

Application (NDA) had to be submitted by the sponsor and approved by the FDA

before a new drug could be promoted and distributed in the marketplace. The law

prohibited false therapeutic claims for drugs, formally authorized factory inspections,

and added injunctions to the enforcement tools that FDA could use to address products

it believed were unsafe. It was not until the births of thousands of deformed infants

whose mothers had taken the new sedative thalidomide, however, that the Act was

strengthened to tighten control over prescription drugs, new drugs, and investigational

drugs.

In 1962, the thalidomide crisis resulted in the Kefauver-Harris Amendment which was

passed unanimously by Congress. This required extensive animal pharmacological and

toxicological testing before a drug could be tested in humans. The data from these

studies had to be submitted in the form of a Notice of Claimed Investigational

Exemption for a New Drug (IND) and approved by the FDA before human clinical

studies can begin. The amendment also required that manufacturers submit to the FDA

more substantial evidence of the investigational drug's efficacy, as well as safety, in the

NDA. Post-approval, the amendment called for drug firms to send adverse reaction

reports to FDA, and drug advertising in medical journals was required to provide

complete information to the doctor including the risks as well as the benefits.

An ongoing series of legislative and regulatory actions since the 1962 amendment have

continued to expand FDAs role in the drug approval process. Among the more

significant of these was the Federal Advisory Committee Act of 1972, in which

Congress prescribed the formal use of advisory committees throughout the federal

government including the FDA. The Act, which requires committees to be renewed

every two years, has enabled the FDA to access a broad range of industry expertise.

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Such committees are also responsible for a variety of critical functions, including the

evaluation of new drug applications, Rx-to-OTC switches and issues pertaining to

marketed drugs. For example, FDAs Center for Drug Evaluation and Research

(CDER) currently contains 17 advisory committees delineated by therapeutic area

which each make recommendations on new drug approvals within their class. Although

it is not required, FDA typically follows advisory committee recommendations on such

approvals. CDER also includes an advisory committee for Drug Safety and Risk

Management as well as a committee for Pharmaceutical Science, which address issues

pertaining to all therapeutic drug classes. Table 2.5shows CDER advisory committees

operational as of March 2008.

Under calls from industry to improve safety data on drugs used by children, legislation

passed in 1997 provided drug makers with an additional six months of market

exclusivity in exchange for conducting clinical trials on children. While this has

provided important data on pediatric drug effects, which can differ significantly from

drug effects in adults, critics of the law allege that it has given rise to speedy clinical

trials largely designed to guarantee a positive finding for the drug.

In February 2005, in response to concerns that FDA mishandled information about

some drugs' potential safety risks, the Department of Health and Human Services

announced the creation of the FDA Drug Safety Oversight Board. This new group is

charged with monitoring and reporting information about potentially dangerous drug

reactions. However, its role is advisory, and while members can make generally

recommendations regarding safety issues, they do not have authority to influence a

particular drug application, remove a drug from the market or make changes to a drug's

sales practices.

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Table 2.5: CDER Advisory Committees, 2008

Advisory Committee Scope

Anesthetic and Life Support Drugs Addresses a broad range of productsAnti-Infective Drugs Includes antibiotics, antifungalsAntiviral Drugs Includes AIDS drugsArthritis Drugs Includes COX-2 inhibitorsCardiovascular and Renal Drugs Includes hypertension drugsDermatologic and Ophthalmic Drugs Addresses a broad range of productsDrug Safety and Risk Management Addresses safety issuesEndocrinologic and Metabolic Drugs Includes weight-loss drugsGastrointestinal Drugs Includes proton pump inhibitorsMedical Imaging Drugs Addresses drugs used in diagnostic imaging

Nonprescription Drugs Covers a broad range of therapeutic classesOncologic Drugs Focuses on cancer products

Peripheral and Central Nervous System Drugs Addresses a broad range of productsPharmaceutical Science & Clinical Pharmacology Primarily addresses generic drugsPsychopharmacologic Drugs Includes antidepressantsPulmonary-Allergy Drugs Includes nonsedating antihistaminesReproductive Health Drugs Includes contraceptives


However, the FDA continues to come under criticism for approving unsafe drugs. In

September 2006, a long-awaited review of the FDA by the Institute of Medicine claimsthat the agencys drug safety monitoring systems are inadequate and in need of reform,

hampered by bad management and subject to incessant internal disputes. The report

outlined a series of suggested changes including limiting initial drug approvals to five

years. As of early 2008, however, there does not appear to be any significant attempt to

implement this recommendation.

Pediatric safety testing

Because of their distinct physiologies, children often experience quite different effects

of drugs than adults. Drugs that have been extensively studied and found highly safe in

adults, for example, can behave quite differently in children even after dosages have

been scaled back proportionately. At the same time, most clinical testing for new

product candidates focuses on adults due to the far larger size of the adult population,

as well as the significantly greater expense and heightened complexity of testing drugs

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in children. This causes safety risks, since more than 75% of drugs that are prescribed

to children have only been tested in adults.

To address this problem, several initiatives have been undertaken including the Best

Pharmaceuticals for Children Act (BPCA) and pediatric exclusivity incentives. The

Best Pharmaceuticals for Children Act was originally enacted in 1997 and reauthorized

in 2002. The legislation provides incentives for drug manufacturers to conduct clinical

trials in children, gives pediatric medications priority status for FDA evaluation, and

promotes the dissemination of information related to the use of drugs in children.

Pediatric exclusivity provides up three years of additional market exclusivity for drugs

whose manufacturers conduct pediatric safety studies. Through the end of 2007, these

incentives have resulted in nearly 800 pediatric studies involving more than 45,000

children and updated pediatric labeling for more than 120 drugs.

Future directions in drug safety reviews

Officially, the FDA has not changed its overall standards for drug approval in many

years. On case by case basis, however, the agency appears to be requiring more data to

verify safety. This is likely tied to the recent spate of embarrassing drug recalls, and is

expected to continue into the foreseeable future. For example, the FDA is now

requiring long term studies examining cardiovascular risk for all new non-steroidal

anti-inflammatory drug (NSAID) candidates and in April 2007, issued a non-

approvable letter for Mercks Arcoxia. The letter stated that Merck would need to

provide additional data to support the COX-2 inhibitors benefit-to-risk profile, even

though the drug was already available in 65 countries worldwide.

In fact, even after granting approval, the FDA is expected to increase its requests for

safety data. For example, the new FDA Amendments Act of 2007 permits the FDA to

require companies to study the risks associated with drugs even after they have been

approved for sale when new safety information may have emerged. The agency can

then demand changes in product labeling, such as restrictions on use and distribution.

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This ability was also explicitly included in the 2007 reauthorization of the Prescription

Drug User Fee Act (PDUFA).

In 2007, entire sections were added to PDUFA regarding post market studies, risk

evaluation and risk mitigation. Among the most important is that drug sponsors

respond to an FDA notice of a post market safety issue with a supplemental label

change. FDA decides unilaterally when to make such notifications, and the

proposed label change is subject to review and discussions. However, such discussions

may last only 30 days following FDA notification, and within 15 days after conclusion

of discussions, FDA may issue an order directing the labeling change. Should sponsors

fail to respond appropriately to FDA post market safety or risk mitigation notifications,

the drug may no longer be sold in the U.S. Congress also authorized development of

post market risk identification and analysis methods that includes linkages among

multiple sources of data, proposing goals of at least 100,000,000 patients by 2012.

However, drugs and active ingredients produced outside the U.S. remain a safety risk

and are likely to continue to do so through the foreseeable future. This is a significant

concern, since foreign companies manufacture as much as 80% of all ingredients used

by American drug makers. In November 2007, the director of healthcare for the

Government Accountability Office testified before a Congressional subcommittee that

the FDA can't guarantee the safety of the U.S. drug supply because its oversight of

foreign drug manufacturers is lax. Due to poor record-keeping, the agency cant

determine which facilities haven't been inspected. Furthermore, at the current rate of

inspection, it would take the FDA 13 years to examine each known manufacturing site

once.

Reducing time to market

One of the most significant mechanisms the FDA has introduced to reduce drug

approval times has been the Prescription Drug User Fee Act (PDUFA). First

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established in 1992, PDUFA was designed to decrease review times by strengthening

the FDAs budget. Under the law, which was reauthorized in 1997, 2002 and 2007,

drug makers pay fees for review of applications that cover about half of the FDA's

budget, thereby resulting in more manpower to review applications. In 2007, these user

fees amount to roughly $400m. The law was proposed as a means to supplement

FDAs somewhat limited operating budget in its fiscal year 2006, for example, the

FDA received just $1.5 billion, compared with $5.8 billion appropriated to the Centers

for Disease Control (CDC) and Prevention and $28.6 billion for the National Institutes

of Health (NIH). To put this in perspective, the agencys funding as a proportion of the

CDCs budget has declined from 97% in 1986 to 39% in 1996 to 28% in 2006,

according to the Coalition for a Stronger FDA. This dearth of resources continues to

hamper the FDAs ability to achieve adequate staffing levels to meet its drug review

objectives.

In 2005, FDA made further internal changes designed to speed up the availability of

innovative medical technologies through the creation of the Medical Innovative Task

Force. This group proposed five recommendations including:

Entering into new or expanded memoranda of understanding with federal agencies

outside of HHS that play important roles in medical technology development;

streamlining HHS involvement in medical technology;

supporting standardization of e-clinical trials for drugs and medical devices;

improving collaboration and cooperation between the FDA and the Centers for

Medicare & Medicare Services (CMS) to speed approval and reimbursement

coverage for new products;

expanding scientific education and training to speed medical innovation.

Progress has been made in some of these areas. For example, FDA and CMS have

agreed to conduct parallel product reviews, at the request of an applicant. They will

also work together on joint program to increase FDAs use of CMS post market

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surveillance data. As a result of these and other initiatives, the FDA now attempts to

review and act on at least 90% of the New Drug Applications and Biologic License

Applications within 10 months of the date of filing and within six months for drugs

given priority review.

Fast track approvals

In order to provide speedier approval for certain drugs that address unique needs, the

FDA has established three categories within which applications will be reviewed on a

shorter timetable: Fast Track, Accelerated Approval and Priority Review.

The Fast Track process was designed to expedite the review of drugs to treat serious

diseases for which there is an unmet medical need. If there are existing therapies, a fast

track drug must show a significant advantage over available treatment, such as super

effectiveness and/or reduced side effects or toxicity. A drug that meets these criteria is

eligible to receive:

More frequent meetings with FDA to discuss the drugs development plan and

ensure collection of appropriate data needed to support drug approval;

more frequent written correspondence from FDA about such things as the design of

the proposed clinical trials;

eligibility for Accelerated Approval;

Rolling Review, in which a drug company can submit completed sections of its

NDA for review, rather than waiting until every section of the application is

completed before the entire application can be reviewed. NDA review usually does

not begin until the drug company has submitted the entire application to the FDA.

The Accelerated Approval process, which was first implemented in 1992, allows earlier

approval of drugs that treat serious disease and fill an unmet need based upon a

surrogate endpoint rather than a clinical outcome. This can considerably shorten the

time required prior to receiving FDA approval, since surrogate endpoints (markers such

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as a laboratory measurement, or a physical sign used in clinical trials as an indirect

measurement of improvement) can be faster to measure while clinical outcomes such as

survival or symptom improvement can take much longer to identify. The FDA bases its

decision on whether to accept the proposed surrogate endpoint on the scientific support

for that endpoint. For example, instead of waiting learn if a drug actually can extend

the survival of cancer patients, the FDA might approve a drug based on evidence that

the drug shrinks tumors because tumor shrinkage is considered a good predictor of

increased survival.

Priority Review, which was also established in 1992 with PDUFA, is given to drugs

that offer major advances in treatment, or provide a treatment where no adequate

therapy exists. The goal for completing a Priority Review is six months, compared

with the 10 month goal of Standard Review. Priority Review status can apply both to

drugs that are used to treat serious diseases and to drugs for less serious illnesses;

however, the drug must have the potential to provide significant advances in treatment.

This could include increased effectiveness, reduced adverse reactions, greater patient

compliance or evidence of effectiveness in a new subpopulation, such as children.

Orphan drug approvals

As in Europe, U.S. regulators have focused some attention on easing the approval

process for so-called orphan drugs. These are medicines that address diseases

affecting fewer than 200,000 people in the United States or low prevalence is taken as

prevalence of less than 5 per 10,000 in the community. The class was formally

established in 1983 with the passage of the Orphan Drug Act. The act recognizes that

medical research and development of drugs to treat such diseases is financially

disadvantageous, so it rewards companies that do so with tax reductions and marketing

exclusivity on such drugs for an extended time (seven years post-approval).

Under the act, nearly 1,700 medicines have been designated orphan drugs as of 2007,

and 249 have been approved for use. In contrast, the decade prior to 1983 saw fewer

than ten such products come to market. In late 2007, the FDA and EMEA came to an

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agreement whereby the same application could be

Download - Drug Approval Trend at the FDA and Emea

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