BIOSIMILARS TAKE SHAPE

Another important FDA initiative is to establish standards and policies governing the development and approval of "similar" versions of biotech therapies. Patient and consumer groups and health plans and payers are pressing for a clear biosimilar development pathway to facilitate access to less costly therapies, a goal that will be increasingly important as more biologics come on the market. The FDA held a two-day public meeting in November 2010 to launch the process for establishing a framework for approving biosimilars, as stipulated by the Affordable Care Act (ACA) enacted in March 2010 (see the December 2010 Regulatory Beat column, BioPharm International).

A long list of brand and generic-drug manufacturers testified on the scope and size of tests and data needed to document the safety and efficacy of such products, and the The FDA will be digesting these and other comments in the coming months. FDA officials appeared interested in identifying a middle ground between ensuring product safety and efficacy, and making affordable new treatments available to patients.

COMPARING EFFECTIVENESS

Obama's healthcare reform legislation also expanded federal support for comparative effectiveness research (CER), and that initiative has already begun to take shape. The governing board for the Patient-Centered Outcomes Research Institute (PCORI) held its first meeting in November. It adopted bylaws and explored operating procedures and is now conducting a search for an executive director. Additional priorities are to work with the Institute's new Methodology Committee and to develop a communications plan, including guidelines for interacting with interest groups and for disseminating PCORI findings.

Before PCORI awards any grants for new CER projects, the Board wants to assess what research and analysis already is going on in this field and where there are information gaps to fill. The US Department for Health and Human Services (HHS), the National Institutes of Health, and the Agency for Healthcare Research and Quality have dispersed $1.1 billion to CER projects during the past two years—the funds were provided by the economic stimulus legislation of 2009, and most of these initiatives are up and running.

PCORI may gain assistance for conducting an environmental scan of current CER work from a planned HHS initiative to establish an online CER catalog. Similarly, the Partnership to Improve Patient Care is creating a database of federally funded CER projects to provide patients and healthcare professionals with information on treatment options. PCORI also would like to review state and private CER initiatives sponsored by insurance companies and research organizations to help identify opportunities for early projects that can increase general understanding of CER and further illuminate PCORI's role.

Although comparative effectiveness is not a formal component of drug development in the US, increased government involvement in this field is slated to pressure pharmaceutical companies to demonstrate the value of new therapeutics, especially for crowded drug classes. The development of CER standards and methodologies promises to impact the scope of evidence required by regulators to reduce uncertainty, which will be an important development for manufacturers.

COSTS DRIVE COMPLIANCE

By steering patients and providers to the most effective treatments, CER advocates hope to improve healthcare quality, while also reducing spending on medical services and products. With healthcare consuming an evergrowing portion of federal and state budgets, authorities are looking hard at all opportunities to save money, and healthcare fraud and abuse seems to be a prime target. The Justice Department announced in November that it had recouped $3 billion in civil settlements and judgments last year, much of it from pharmaceutical companies.

At the top of the list is Pfizer's (New York) $2.3-billion settlement for promoting unapproved drug uses and illegal marketing, the largest healthcare fraud payment in history. That surpassed an earlier $1.4-billion deal with Eli Lilly (Indianapolis) for illegal marketing of its pain reliever Bextra. Astra Zeneca (London) agreed to a $302-million civil settlement, Novartis (Basel) paid $193 million, Teva (Jerusalem) was hit with a $100 million fine, and Forest Laboratories (New York) doled out $93 million.

There's no sign of any let-up: in October, GlaxoSmithKline (GSK, London) agreed to a $750-million settlement, in this case for failing to correct manufacturing problems at a Puerto Rican plant that resulted in adulterated products. And Merck & Co. (Whitehouse Station, NJ) negotiated a $950-million deal with the US Department of Justice (DOJ) to settle marketing violations related to Vioxx (on top of the $5.6 billion the company has paid out to settle various Vioxx lawsuits and claims). Extensive layoffs throughout the pharmaceutical industry will only encourage more dismissed workers to blow the whistle on malfeasance by former employers. And industry cost-cutting appears to be eroding plant maintenance and increasing reliance on foreign suppliers, giving rise to serious product quality problems and product recalls and shortages.

The crackdown on illegal drug company behavior is slated to intensify as regulators and prosecutors look for more stringent enforcement actions to convince corporate leaders of the importance of complying with FDA marketing and manufacturing rules and of addressing violations cited in warning letters. One strategy is for the federal government to bring criminal charges against individuals considered responsible for serious violations. The first shoe fell in November when the DOJ charged a former GSK executive with making false statements and blocking an FDA investigation into off label uses. The trial begins in February, and conviction could bring a jail term as well as fines.

In addition to the threat of jail time, prosecutors also are looking to ban companies committing fraud from doing business with Medicare and Medicaid. The HHS inspector-general issued guidelines in October 2010 that signal more aggressive pursuit of exclusion penalties against executives who should or could have known of illegal behavior. Last year, KV Pharmaceutical (Bridgeton, MO) had to sever ties with its CEO when he was hit by an exclusion order that would have halted company sales to federal agencies.

KV is one of several leading pharmaceutical companies embroiled in drug manufacturing and quality control issues that have drawn the scrutiny of the FDA and Congress. Johnson & Johnson (J&J, New Brunswick, NJ) made front-page news throughout 2010 with multiple recalls of McNeil Consumer Healthcare's over-the-counter painkillers and cold medicines. Pfizer and J&J also had to recall thousands of drug packages tainted by foul odors that evidently came from chemicals applied to shipping pallets used in Puerto Rican plants. Glass flakes have been found in intravenous drugs made by Amgen (Thousand Oaks, CA) and Novartis.

The FDA wants to conduct more inspections of foreign plants and to move aggressively against manufacturers found in violation of the rules. In addition to waving the enforcement stick, agency leaders talk of more guidance and assistance to help companies meet quality and safety standards and to bring high quality drugs more quickly to patients. The challenge is for industry and regulators to find the resources and appropriate policies to achieve these objectives in the coming year.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, jwechsler@advanstar.com
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