Regulatory Beat: Policy Makers will Focus on Drug Safety and Costs in 2005

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BioPharm International, BioPharm International-01-01-2005, Volume 18, Issue 1

The re-election of George W. Bush as president and continued Republican control of Congress will shape the healthcare policy agenda for the coming year. Major initiatives to expand healthcare coverage to the uninsured or reform Medicaid are off the administration's priority list, but social security and tax reform may provide additional tax incentives for individuals and small businesses to obtain health coverage and establish health savings accounts.

The re-election of George W. Bush as president and continued Republican control of Congress will shape the healthcare policy agenda for the coming year. Major initiatives to expand healthcare coverage to the uninsured or reform Medicaid are off the administration's priority list, but social security and tax reform may provide additional tax incentives for individuals and small businesses to obtain health coverage and establish health savings accounts.

Jill Wechsler


At the same time, rising healthcare costs and prices will draw intense scrutiny from both Republicans and Democrats anxious to restrain spending at a time of record budget deficits and escalating counterterrorism outlays. This concern may shape new regulations and policies for implementing the Medicare Modernization Act (MMA). The GOP victory diminishes chances for new legislation permitting the federal government to directly negotiate drug prices with Medicare pharmacy plans. Policymakers will be looking for ways to broaden access to new medical technologies without adding to mounting healthcare bills. When implementing the Medicare pharmacy benefit, officials will take a hard look at drug costs, utilization, and marketing and support efforts by Medicare drug plans to establish formularies and negotiate discounts. They also will closely examine payments for therapies administered in doctors' offices and already covered by Medicare.


Charges that FDA has allowed too many unsafe drugs on the market are prompting a re-examination of new-drug approval criteria and agency oversight of marketed products. Initial concerns about antidepressants causing suicidality in children and that patients using Merck's Vioxx may have an increased risk of heart attacks have expanded to include a much broader range of products. At a November Senate hearing, FDA Safety Officer David Graham cited serious safety issues with Astra Zeneca's cholesterol agent Crestor, GlaxoSmithKline's asthma therapy Serevent, Pfizer's COX-2 inhibitor Bextra, Abbott's weight loss drug Meridia, and Roche's acne treatment Accutane. At the same time, adverse event reports prompted FDA to stiffen warnings concerning pregnant women taking Accutane and proper use of the abortefeceant Mifeprex (mifepristone or RU-486).


These events generated calls for an independent drug safety office - although FDA officials counter that the Vioxx withdrawal and label changes demonstrate that the agency's post-marketing safety system is working well. Steven Galson, acting CDER director, noted that FDA's Office of Drug Safety already is independent of CDER's Office of New Drugs and termed Graham's charges "hysterical" and "baseless."

FDA has commissioned an Institute of Medicine (IOM) study on the effectiveness of its post-market system and the adequacy of its authority to regulate unsafe products. Critics consider the IOM analysis a waste of time, but it provides an opportunity to examine these issues more thoroughly and objectively. In addition, FDA has promised to publish final versions of three risk management guidances that were issued in May, to hold more public meetings to discuss complex drug safety issues, and to establish a formal program to review conflicting opinions of staff scientists. These actions may help, but Congressional committees are continuing investigations and planning more hearings.


In addition to drug pricing, access, and safety, manufacturers will face a broad range of related issues in coming months.

Vaccine shortages. The surprise shutdown of Chiron's Liverpool vaccine manufacturing facility in October and the resulting shortage of flu vaccine for this winter continues to focus public attention on vaccine manufacturing and oversight. Members of Congress are blaming FDA for failing to enforce manufacturing standards or recognize earlier the severity of the problems at Chiron's plant. The situation is raising questions about the adequacy of FDA's foreign plant inspection program and its enforcement approach.

Chiron must show in January that it can correct its manufacturing problems and regain its license in order to produce flu vaccine for next year. Failure to do so will ignite further calls for policies to encourage manufacturers to enter the US market. Policy makers will examine the viability of tax incentives for plant construction, a universal flu vaccination policy to broaden the market, increased support for research on new vaccine manufacturing methods, government guarantees to buy back unused vaccine doses, and legislation to mitigate vaccine and drug manufacturers liability.

Drug importing. Even though Democrats lost at the polls, the drug import campaign is not likely to die down. For both political and fiscal reasons, the White House will be looking for ways to identify safe foreign sources of less costly medicines. Several new Republican senators championed broader drug importing as one way to expand access to affordable medicines and will be seeking to fulfill their promises.

Push for generics. The Bush administration has supported generic drug development as a way to reduce pharmaceutical costs. Now generics makers are pressing for FDA policies that will facilitate production and marketing of generic versions of biotech therapies. FDA held a public meeting on "follow-on proteins" in September and is co-sponsoring a workshop in February on related scientific issues. Brand-name manufacturers maintain that full preclinical and clinical testing is needed to ensure that a follow-on protein is equivalent to an innovator product. Generic firms counter that advanced analytical and manufacturing systems permit development of similar biopharmaceuticals with abbreviated testing. FDA is examining whether its current regulatory approach can be extended to this area, but new legislation probably will be needed for FDA to approve generic versions of biotech drugs.

Spurring innovation. A short time ago, FDA efforts to lay out pathways to speed more new therapies to market would have been at the top of the 2005 priority list. Now there is concern that all the turmoil about unsafe therapies will lead to tighter drug approval policies and limit R&D at companies embroiled in legal and regulatory battles. Despite these developments, FDA acting Deputy Commissioner Janet Woodcock will continue efforts to turn March's Critical Path report into new models for drug R&D. The agency has prepared an "opportunities list" of priority research activities that it believes will spur R&D and is seeking support from industry and academia in pursuing them. Key objectives are developing new biomarkers and enriched study designs to streamline the costly clinical trial process. FDA also hopes to launch initiatives to develop research standards, test protocols, and more efficient data collection systems.

FDA officials also will continue to implement new programs and policies designed to modernize Good Manufacturing Practices (GMPs). Regulators and manufacturers will be examining the need for new approaches to process validation, product specifications, and inspection programs to spur adoption of modern production systems.

Going global. The flu vaccine shortage and drug import campaign testify to the increasingly international nature of the biotech industry. The Bush administration is under pressure to boost support for the international campaign against the AIDS epidemic, and cloning and stem cell research are drawing international scrutiny. These global health crises will challenge intellectual property protections for biotech products.

FDA will continue efforts to harmonize drug development and regulatory oversight in different nations, this year focusing on global quality manufacturing standards. FDA also is encouraging manufacturers to test systems for tracking pharmaceuticals using radio frequency identification (RFID) technology. All these activities will further focus attention on international price differentials for drugs and whether the US should underwrite biomedical research for the rest of the world.

New offices, new names. A major change at FDA will take place when it relocates most new drug reviewers and chemists to a new agency campus in Maryland. The move will be accompanied by organizational and program changes for CDER's Office of New Drugs and Office of Pharmaceutical Sciences, along with new approaches to reviewing applications and collecting information.

The administration recently nominated former Utah Governor and Environmental Protection Agency head Michael Leavitt to replace Tommy Thompson as Health and Human Services Secretary. If confirmed, one of Leavitt's first tasks will be securing a permanent head of FDA, which has lacked a confirmed leader during most of the Bush administration. Confirmation hearings for Leavitt as well as a new FDA commissioner will provide a forum to air concerns about FDA's drug safety monitoring capabilities and efforts to protect against bioterrorism.

Jill Wechsler is BioPharm International's Washington editor, 7715 Rocton Avenue, Chevy Chase, MD 20815, 301.656.4634