Pharma Forecast: Into the Woods - Pharmaceutical Executive

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Pharma Forecast: Into the Woods


Pharmaceutical Executive


Patent-reform legislation will also pick up speed. "Basically, there's no one-size-fits-all solution," says Kracov. "The current bill suits the software industry and could hit pharma and biotech very hard." The Supreme Court has also gotten in on the act, to equivocal effect. While seeming to raise the bar on "obviousness"—and thereby on standards for a patent—it has also signaled that decisions must be made on a case-by-case basis. Meantime, the US Patent Office is instituting new rules to curtail the number and variety of claims covered by a single application. Generic shops are licking their chops.

Also over at the Supreme Court, the question of whether plaintiffs' right to sue drug companies under state law is preempted by FDA is likely to be partly or temporarily decided this year, following arguments in two key cases. With the Bush administration backing pharma and the court increasingly conservative, the industry may score a victory—and cut its legal bills.

Plus, the battle over the New Hampshire law banning the commercial use of prescribing data may also make its way onto the Supreme Court docket, says VOI Consulting's Todd Clark.

Among the Regulators

Pharma frustration with FDA is at an all-time high. Many in the industry are frankly disgusted with what they perceive as the agency's capitulation to Congress on drug safety.

Analysts predict that 2008 will only be worse. "In 2008, FDA would rather have pharma do additional tests for every possible safety signal than see Charles Grassley or John Dingell once again drag an FDA reviewer before Congress to justify his or her decision to approve a new drug," says Tufts' Kaitin.

Expect slower approvals, narrower indications, and more black-box warnings, and approvable letters demanding more clinical evidence. Says IMS's Aitken: "This will raise the level of uncertainty faced by companies not only about deciding when to seek approval but whether to even continue developing certain products." FDA's December knockdown of Avastin for breast cancer may signal a new get-tough approach to the coming cascade of cancer drugs.

At the same time, the agency faces its own uncertainty about top-level management. A Democratic White House would likely appoint not only a new commissioner but new office heads, possibly upping the power of the safety side in its war with the reviewers.

All this unfolds as current management begins to implement FDAAA and PDUFA IV. The industry and its trade associations fought hard to get Congress to pass progressive, practical legislation, but the prevailing atmosphere of frayed trust has made many industry insiders wary. Setting up preapproval REMS (risk evaluation and mitigation strategies) and rolling out postmarketing studies will require increased collaboration between drugmakers and FDA officials.

"Overall, the legislation's emphasis on safety, transparency, and accountability should allow FDA—and ultimately the industry—to reestablish credibility with the public," says Arnold & Porter's Kracov. But he worries that "the agency will not be given the room or resources to do it right. Will FDA be able to project emerging safety issues while still approving drugs swiftly? Or will it just turn into a policeman?"

On other regulatory fronts, pharma paid $2 billion to settle fraud cases with the Department of Justice in 2007—75 percent stemming from Medicare and Medicaid cases. With Medicare Part D expanding the roster of drugs over which the federal government has control—and with the benefit programs speeding toward bankruptcy—analysts predict a fiercer crackdown this year. Rumor has it that six drugmakers will pay fines of more than $1 billion each and sign sweeping corporate integrity agreements.

The Office of Inspector General will also launch a new offensive in the war on fraud. Says Polaris Management's Andy Bender: "We'll see many investigations on the medical side of the house looking at compliance in clinical trials and conflicts of interest between sponsor and principal investigators."


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