FDA releases proposals for PDUFA IV; federal report addresses cost of drug development

A public forum scheduled this month will help to solidify proposals FDA unveiled in January for reauthorization of the Prescription Drug User Fee Act (PDUFA). Once public comment from the February 16 meeting is received and incorporated into the finalized proposal, negotiations between the agency and the federal government over the fourth incarnation of this important funding mechanism will be key in determining FDA's fiduciary future.

As it stands prior to public comment, FDA's PDUFA proposal seeks an increase of $87.4 million in annual user fees collected by the agency, bringing total fees to $392.8 million. The agency would use $29.3 million of the additional fees to enhance programs in the area of drug safety for on-market medications, including improved surveillance and the hiring of additional employees to perform postmarketing safety work.

Another $4.6 million of the increase would go toward the hiring of additional staff and the implementation of good review management principles and guidelines for clinical trial designs and other areas. A $4 million portion of the additional user fees would fund the agency's goal of moving toward an "all-electronic" environment. The agency also would use the funds to adopt new approaches and improve existing tools, including databases, with a goal to detect and prevent adverse events and analyze drug safety signals.

FDA also proposed the creation of a second user fee program that would collect new fees from pharmaceutical companies that seek FDA advisory reviews of their direct-to-consumer (DTC) advertisements.

FDA also is seeking the elimination of a statutory provision that limits the use of PDUFA funds to assess drug safety to the initial 3 years that a medication is on the market.

According to a former FDA staff member, the agency's PDUFA proposal appears to coincide with current needs.

"I don't see any big surprises," said Donald Segal, JD, a partner at Washington, DC, law firm Alston & Bird and associate chief counsel at FDA from 1979 to 1991. "While I haven't seen anything that is likely to upset Congress, they may feel that FDA has not gone far enough."

In the give-and-take of negotiations between FDA and Congress, the PDUFA proposal could go through substantial changes. According to Segal, potential areas targeted by lawmakers could include approval times, priority review, risk assessment, generic biologics, black-box warnings, and post-approval study obligations.

Findings from a study performed last year by the Institute of Medicine (IOM) that was commissioned by FDA to review the agency's structure and drug safety process also could enter into the process when Congress takes up PDUFA, Segal said.

"They may seek specific adoption of some of the IOM recommendations, including the creation of a separate office on safety," Segal said. "It is too early in the game to speculate, but I would expect a lively debate and the consideration of a variety of other issues."

MIXED PERSPECTIVES ON R&D

Meanwhile, a report issued in December 2006 by the Government Accountability Office (GAO) states that although spending by pharmaceutical companies on research and development increased 147% from 1993 to 2004, new drug applications (NDAs) submitted to FDA for new molecular entities (NMEs)/new biologics, new formulations, and new indications did not keep pace, increasing by 38% over the same time period. Specifically, the number of NDAs submitted to FDA for NMEs/new biologics increased by 7%.

In the report, GAO's panel of experts identified several factors contributing to the higher research and development costs, including "limitations on the scientific understanding of how to translate research discoveries into safe and effective drugs, business decisions by the pharmaceutical industry, uncertainty regarding regulatory standards for determining whether a drug should be approved, and certain intellectual property protections."

"There is no clear expectation of when the industry will become more productive-that is, producing greater numbers of new drugs, and more specifically, those representing significant therapeutic advances," the report stated.

Recent data from PhRMA not included in the GAO study demonstrate that industry-wide investment in research and development reached its highest point thus far, $51.3 billion, in 2005. In 1993, the beginning of the period covered by the GAO report, industry spending on R&D was $16 billion, according to PhRMA.

According to GAO analysis of FDA data, the annual number of NDAs submitted to FDA for NMEs/new biologics, new formulations, and new indications generally grew from 74 in 1993 until a peak of 129 in 1999. After that, NDAs to the agency generally declined to a total of 102 in 2004, according to the report. Specifically, NME NDA submissions to FDA peaked in 1995 with 50, then generally declined to a total of 30 submissions in 2004, according to GAO.

"Given the uncertain nature of research and development efforts, it is unlikely that expenditures and NDA submissions would grow at the same rate," the report stated. "However, many analysts and experts assumed that the trend in NDA submissions would also generally be one of consistent increases."

The trend the GAO report observed between spending and a perceived lack of industry productivity isn't new, according to one expert.

"Part of this is the normal fluctuation of company pipelines," said Ken Kaitin, PhD, director of the Boston, Mass-based Tufts Center for the Study of Drug Development. The drug industry tends to have periods during which many agents receive approvals followed by periods during which there aren't as many, he said.

Dr Kaitin said he agrees with GAO's theory that the focus of some companies on what are known as follow-on or "me-too" drugs has dampened industry innovation.

"The problem is these drugs tend to enter very crowded marketplaces and so the manufacturers, instead of actually reducing costs by developing a product that already exists, end up spending more because they have to demonstrate that their products are not only safe and effective, but also better than the competition," Dr Kaitin said.

Despite the GAO report's observation that the industry might presently be in a period of creative stasis, there are some reasons for optimism, according to Dr Kaitin and the Tufts Center for the Study of Drug Development Outlook 2007 report.

"What we're seeing is a tremendous amount of activity in the small- to mid-tier pharmaceutical sector," Dr Kaitin said. "Because of the productivity problems in large pharma, many of the smaller companies are benefiting from having investment in them from large pharmaceutical companies."

The Tufts Center report said the number of products entering clinical trials from the top 10 pharmaceutical firms from 2003 to 2005 increased by 52% over the annual rate observed from 1998 to 2002.

A reinvigoration of FDA involvement in drug development and safety via its Critical Path Initiative also should encourage new approaches to drug development in the near future. The industry can look forward to improved safety and efficacy assessments by the agency, which will allow physicians to be better informed when administering treatment, according to Dr Kaitin. The collaborative Biomarkers Consortium, announced in October 2006, uniting industry, academia, and patient groups, as well as public sector entities such as FDA and the National Institutes of Health, also could have an effect on drug development, he said.

"The fact of the matter is, it could easily serve as a model for industry working together with academic and public groups to find better tools to determine which products should enter clinical testing," Dr Kaitin said.

SOURCES Food and Drug Administration. Prescription Drug User Fee Act; public meeting. Federal Rgister. 2007;72:1743–1753. Available at: http:// http://www.accessdata.fda.gov/scripts/oc/ohrms/dailylist.cfm?yr=2007&mn=1&dy=16. Accessed January 16, 2007.

FDA proposes new measures to strengthen drug safety under PDUFA reauthorized user fee program [press release]. Washington, DC: US Food and Drug Administration; January 11, 2007. Available at: http:// http://www.fda.gov/bbs/topics/news/2007/new01544.html. Accessed January 11, 2007.

US Government Accountability Office. Science, business, regulatory, and intellectual property issues cited as hampering drug development efforts. Washington, DC: US Government Accountability Office; December 2006. Report GAO-07-49. Available at: http:// http://www.gao.gov/cgi-bin/getrpt?gao-07-49. Accessed January 16, 2007.

Food and Drug Administration. Original new drug application (NDA and BLA) approvals, November 2006. Available at: http:// http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseaction=reports.neworiginalNDA/. Accessed January 8, 2007.

Food and Drug Administration. Number of NDAs received by calendar year. Available at: http:// http://www.fda.gov/cder/rdmt/numofndareccy.htm. Accessed January 18, 2007.

PhRMA statement on GAO report [press release]. Washington, DC: Pharmaceutical Research and Manufacturers of America; December 19, 2006. Available at: http:// http://www.phrma.org/news_room/press_releases/phrma_statement_on_gao_report/. Accessed January 10, 2007.

Despite development challenges, drug developers have reason to be optimistic [press release]. Boston, Mass: Tufts Center for the Study of Drug Development; January 3, 2007. Available at: http://csdd.tufts.edu/newsevents/newsarticle.asp?newsid=75. Accessed January 11, 2007.

Outlook 2007. Boston, Mass: Tufts Center for the Study of Drug Development; January 2007.