Politics & PDUFA - Pharmaceutical Executive


Politics & PDUFA

Pharmaceutical Executive

Fees first

A top priority for pharma companies is to renew the Prescription Drug User Fee Act (PDUFA), which has to be reauthorized by October 1, 2012, for FDA to continue collecting nearly $700 million in fees to support its review process for drugs and biologics. Although that legislative deadline may seem far away, FDA wants to have a PDUFA V plan ready for public review by fall in order to transmit it to Congress by early 2012; failure to reauthorize user fees by summer next year theoretically would force FDA to lay off hundreds of staffers and shut down the review process.

In April 2010, FDA's Center for Drug Evaluation and Research (CDER) launched a two-year process for revising PDUFA. CDER director Janet Woodcock noted that 65 percent of human drug review funding comes from user fees, a situation that some critics claim makes the agency overly dependent on industry. Yet, despite some qualms about the current program, no one suggests that FDA curtail any activities or cancel the fees.

Pharma companies support user fees in general, but complain that multiple postmarketing requirements have slowed reviews and undermined approval time frames. Patient advocates, pharmacists, and doctors agreed that the proliferation of risk evaluation and mitigation strategies (REMS) make drug development more costly and complicates prescribing and dispensing. Consumer groups focused more on direct-to-consumer drug advertising, seeking user fee support for mandatory pre-review of DTC ads, clearer prescribing information, better protection of patients in clinical trials, and more comparative studies to ensure that new drugs are superior to those already on the market.

FDA has been discussing these and other issues at meetings with manufacturers, patient and consumer groups, and healthcare professionals, part of a broad, transparent consultative process required by the FDA Amendments Act (FDAAA) of 2007. A main FDA goal for PDUFA V is to gain more flexibility in meeting review time frames, possibly by extending the review clock for more complex applications, such as those with REMS, that require advisory committee meetings, or that involve inspections of foreign manufacturing facilities. However, that could mean extensions for almost all important applications.

Fees for generics?
The overarching issue is to what extent industry fees should fund FDA initiatives to improve drug development and regulatory science. FDA proposes to tap fees for more staff consultations on innovative clinical trial designs, on utilizing biomarkers in drug development, on complex manufacturing issues, and to standardize electronic submissions. The agency's wish list also seeks support for the Sentinel active surveillance system, meta-analysis standards, biomarker qualification, rare disease treatments, and improved dose selection and drug safety assessments. But this year's fee to process a new drug application (NDA) with clinical data already exceeds $1.5 million, and manufacturers fear that expanding the pool of activities supported by PDUFA would up the ante disproportionately.

Because PDUFA is "must-pass" legislation, members of Congress are lining up with proposals for a broader FDA reform bill. Legislators want to refine the REMS program, curb drug advertising, expand drug re-importation, ban pay-for-delay deals between innovator and generics firms, require that drugs demonstrate comparative superiority, and grant FDA authority to pull drugs off the market and to issue subpoenas. Stay tuned for more.

Billions in Penalties

With healthcare consuming an ever-growing portion of federal and state budgets, authorities are looking hard to save money by cracking down on healthcare fraud and abuse. The Justice Department announced last 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 $2.3 billion settlement for promoting unapproved drug uses, the largest healthcare fraud payment in history. AstraZeneca agreed to a $302 million civil settlement, Novartis paid $193 million, and Teva was hit with a $100 million fine.

There's no sign of any letup: In October 2010, GlaxoSmithKline signed a $750 million settlement. Merck negotiated a $950 million deal with the Justice Department related to Vioxx. And last month brought in $421 million from Abbott, Boehringer Ingelheim, and B. Braun.

Evidently dozens of pharma cases are under investigation, and the number will rise as layoffs breed dismissed workers eager to blow the whistle on former employers. Regulators and prosecutors are looking to convince CEOs that compliance with the rules is important by levying criminal charges against individual executives considered responsible for serious violations. The first shoe fell in November 2010 when the Justice Department 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.

If the threat of jail doesn't compel manufacturers to clean up their acts, the prosecutors also are looking to ban companies committing fraud from doing business with Medicare and Medicaid. The HHS inspector general says it's aggressively pursuing exclusion penalties against executives who should or could have known of illegal behavior; the CEO of KV Pharmaceutical Co. was axed last year as a result, and more pharmaceutical executives may follow.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at


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