Early Biosimilars Face Hurdles to Acceptance

P&T Journal - June 2016 for the original article go HERE.

The FDA Has Approved Few, So Lack of Competition Is Keeping Prices High

The Food and Drug Administration (FDA) approval of Inflectra (infliximab-dyyb) in March as the second bio-similar cleared for sale in the U.S. gave the agency a small victory in a war of sorts that it has been losing badly. But the agency’s green-lighting of a biosimilar is no guarantee that the market will receive the product with open arms, as the experience of Zarxio (filgrastim-sndz) proves.

Five years after Congress gave the agency the authority to approve supposedly cheaper alternatives to budget-busting biologics, the FDA has cleared only two. “I know people are anxious to see more progress and certainty,” admits Janet Woodcock, MD, head of the FDA’s Center for Drug Evaluation and Research. “Most of the progress so far has been under the hood.”

Pfizer’s Inflectra will compete with Janssen’s Remicade, the reference drug. Zarxio (marketed by Novartis subsidiary Sandoz) competes against both Amgen’s Neupogen (filgrastim) and Teva’s Granix (tbo-filgrastim); the latter was approved as a biosimilar in Europe but as a biologic in the U.S. Pfizer says it will be selling Inflectra by the end of 2016, once all legal barriers fall. Hospital pharmacists are eagerly awaiting its arrival. In usage, infliximab is typically at or near the top among the drugs in a hospital pharmacy. Hospitals use it for rheumatoid arthritis, Crohn’s disease, colitis, and a host of secondary and tertiary off-label purposes. Moreover, doses typically escalate. Remicade’s cost was $3,159 per administration and $18,129 per beneficiary in 2013, according to a June 2015 report from the Medicare Payment Advisory Commission.¹

But Zarxio’s early experience shows that biosimilars, when first introduced, face hurdles. “Our P&T committee has not reviewed Zarxio yet and we have not used it in patient care,” says John Fanikos, Executive Director of Pharmacy at Brigham and Women’s Hospital in Boston, Massachusetts. “Granix was not approved as a biosimilar but through the biologics license application pathway. Since its list of indications is comparable to Neupogen but not all-inclusive, we added it to the formulary as our preferred growth factor.”

When Zarxio first came to market, it was more expensive than Granix but less expensive than Neupogen. “We could not see a reason to use Zarxio on the inpatient or outpatient sides of care,” Fanikos explains. “Sandoz has recently come forward with a contract favorable in terms of pricing, but the other companies have made adjustments in their pricing, too.”

Moreover, physicians haven’t been clamoring for Zarxio. “I was somewhat shocked; many of physicians had no idea what the biosimilar process even is,” states one hospital pharmacist who did not want to be named. “Even those that do would have to be aware of the differences between Neupogen, Granix, and Zarxio. Physicians who have prescribed filgrastim for years are likely to keep prescribing Neupogen rather than going down the list to filgrastim alternatives with suffixes,” he adds.

Even if physicians were totally up to speed on biosimilars, neither Granix nor Zarxio is available in a vial. Because children use filgrastim in lower doses, children’s hospitals need it in a vial. Their only alternative is Neupogen. Pediatric hospitals such as St. Jude’s Children’s Hospital and Children’s Healthcare of Atlanta make up about 5% to 10% of the client base for Vizient, Inc. “That is very influential when organizations like those cannot use a product in question,” says Steven Lucio, Senior Director of Clinical Solutions and Pharmacy Program Development for Vizient, a large group purchasing organization that represents academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks, and nonacute health care providers. Vizient represents almost $100 billion in annual purchasing volume.

Biosimilars in different therapeutic categories face different challenges. For example, Pfizer won’t have to deal with a Granix-like competitor once Inflectra comes to market. The biosimilar will go head-to-head with Remicade. However, infliximab is a mono clonal antibody and therefore a more complicated biologic than filgrastim. Infliximab patients are not immune-compromised, which means the prescribing physician has to be much more concerned about potential side effects. Filgrastim patients are already immune-compromised. “Rheumatologists, dermatologists, and other physicians using infliximab will have to have more of a clinical conversation with patients before using Inflectra since it is not an exact copy of Remicade,” Lucio says. “And that will pose a higher hurdle for its use.”

The FDA Is Part of the Problem

The FDA’s assignment of suffixes is one of a number of controversial regulatory issues that stymie acceptance of biosimilars. The agency published a proposed rule on suffixes² in the summer of 2015 and has still not produced a final rule. The agency received different opinions from different parties as to whether a suffix ought to mimic a biosimilar marketer’s name, as is the case with filgrastimsdnz, or whether the suffix should not conjure up the marketer’s name, or whether the reference drug ought to have a suffix, which is not now the case. Neupogen is simply filgrastim.

Numerous, important guidance documents are also stuck in the FDA’s maw. The FDA’s slow pace is not fully its own fault. Congress has never appropriated segregated funds for the biosimilars program. As part of the Patient Protection and Affordable Care Act (PPACA), the agency was allowed to charge companies user fees for submitting applications. But given the regulatory uncertainty, few applications have been submitted. Instead, the agency has charged companies for meetings during which the FDA advises them on what they need to do prior to submitting an application. Those fees totaled $6 million, $13 million, and $23.8 million in fiscal years (FY) 2013, 2014, and 2015, respectively. Meanwhile, a study by the consulting firm Eastern Research Group (ERG)³ commissioned by the FDA had the agency spending $23.6 million in FY 2013, $21.4 million in FY 2014, and $28.7 million in FY 2015. That $74 million total compares to the $42 million the agency raised in user fees. Still, the mismatch in funding only partly explains why the agency has missed quite a few deadlines it set for itself in terms of answering sponsors’ questions posed during user-fee meetings.

“The FDA infrastructure put into place for BsUFA I is insufficient to meet the objectives and manage the workload it currently faces,” says Hubert C. Chen, MD, Chief Medical Officer of Pfenex. “This is consistent with the experience of Pfenex, as we have worked with the agency across multiple programs in diverse therapeutic areas.” BsUFA is the Biosimilar User Fee Act included in the PPACA.

Dr. Woodcock paints the early troubles of biosimilars with the brush of perspective. She argues the small-molecule generic-drug approval program launched by the Hatch-Waxman law in 1984 took a while to gain momentum. “We didn’t have success overnight with that program,” she says. “But today, over 88% of prescriptions are filled by generics.”

Of course, three decades ago the eight leading drugs in U.S. sales were not expensive biologics, all costing Medicare, for example, more than $1 billion a year and sapping the savings of Americans in all walks of life. So the exigencies surrounding the need for faster biosimilar introductions are magnitudes greater than they were for chemical generics in the 1980s. Express Scripts, one of the largest U.S. pharmacy benefit management organizations, estimates potential savings of $250 billion in the next decade with the approval of just 11 biosimilar products.⁴ A 2014 RAND Corporation study estimates that biosimilars will lead to a $44.2 billion reduction in direct spending on biologic drugs from 2014 to 2024, with anti–tumor necrosis factor agents such as infliximab accounting for the largest chunk of savings (Figure 1).⁵

However, because of the shortage in funding, the FDA’s progress on biosimilars may well get worse before it gets better. As of January 21, 2016, 59 proposed biosimilar products to 18 different reference products were enrolled in the Biosimilar Product Development (BPD) Program. “What I am concerned about is that the program is going to explode and we will not have the staff to handle it,” Dr. Woodcock says.

At hearings of the House health subcommittee on February 4, 2016, Mary Jo Carden, RPh, JD, Vice President of Government and Pharmacy Affairs for the Academy of Managed Care Pharmacy expressed concern about the ability of biosimilars to reach their full potential in the United States because of incomplete guidance from the FDA, confusing federal and state regulatory guidance, and lack of clarity related to payment, coding, and reimbursement.

FDA Guidance Documents Are Coming Slowly

The FDA cleared Inflectra two months after the House subcommittee hearings. Manufactured by Celltrion, it is being marketed in the U.S. by Pfizer’s Hospira subsidiary. Inflectra is approved for a half-dozen uses, including psoriasis and five other conditions in which the immune system attacks the body’s tissues. The drug helps reduce inflammation and control the immune system, which slows those diseases. Remicade, first approved in 1998, is the top-selling medicine of Johnson & Johnson (Janssen’s parent company), with sales of $6.56 billion in 2015.

Inflectra and Zarxio were approved while many critical FDA guidance documents were incomplete. Although the Biologics Price Competition and Innovation (BPCI) Act does not require the FDA to issue guidances before approving a biosimilar application, the FDA understands the importance of guidances in helping to ensure successful implementation of this new pathway.

Perhaps the most important upcoming guidance concerns interchangeability. The FDA did not deem Inflectra interchangeable with Remicade; the same was true for Zarxio, which is not interchangeable with Neupogen. If they were interchangeable, a pharmacist could substitute the biosimilar for the reference product without checking with the physician first. The FDA has not yet established the standard it will use when judging whether a biosimilar is interchangeable.

The FDA expects to publish the eagerly awaited draft interchangeability guidance by the end of 2016. To meet the standard for interchangeability, an applicant must provide sufficient information to demonstrate biosimilarity and also to demonstrate that the biological product can be expected to produce the same clinical result as the reference product in any given patient. The applicant must also demonstrate that if the biological product is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between the use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switching.

“Interchangeability is the thing about biosimilars that makes a lot of physicians nervous,” explains Donald Miller, PharmD, a Professor of Pharmacy Practice at North Dakota State University. “Interchangeability means a pharmacist could switch products without physician authorization, and thus potentially expose a patient to a product with slightly different immunogenicity without the physician being aware of it.” Dr. Miller is a member of the FDA advisory committee that recommended approval of Inflectra in February.

While the FDA will determine interchangeability, the states will control automatic substitution—and states are already approving a variety of limits on that still-to-come process.

Even if pharmacists don’t have to notify physicians when a biosimilar is rated interchangeable, pharmacists could still be in an uncomfortable position. Pharmacists may feel that they are “under the microscope” when switching to a biosimilar based on their own judgment, and they may hope that any unilateral substitution doesn’t come back and cause trouble for them, for whatever reason.
However, the publication of draft guidance does not suddenly quiet controversy. That wasn’t the case after the FDA published its draft labeling guidance in March.⁶ The guidance says biosimilars can use the clinical data gathered by reference product sponsors. That is a point of controversy, with some companies and patient groups saying the company producing the biosimilar ought to include its own clinical trial data on the label. Regulators would also allow biosimilar labels to include the statement that the product is biosimilar to the reference product.

That doesn’t mean the biosimilar’s label has to be identical to the reference product label. It does not. It needs to reflect currently available information necessary for the safe and effective use of the product. Certain differences between the biosimilar and reference product labeling may be appropriate. For example, biosimilar product labeling conforming to the physician labeling rule and/or pregnancy and lactation labeling rule may differ from reference product labeling because the reference product labeling may not be required to conform to those requirements at the time of licensure of the biosimilar product. In addition, biosimilar product labeling might have to reflect differences such as administration, preparation, storage, or safety information that do not otherwise preclude a demonstration of biosimilarity.

The Generic Pharmaceutical Association (GPhA) and its Biosimilars Council praised the draft guidance. Chip Davis, Jr., GPhA President and Chief Executive Officer, says the guidance takes steps to avoid confusion and in many aspects mirrors the protocol for the labeling of generic drugs. For example, a statement defining biosimilarity would be included rather than lengthy and already established scientific data proving biosimilarity. And immunogenicity details would mirror the label content of the reference product. “GPhA and the council are especially pleased that the proposed label contents avoid causing confusion or raising unnecessary questions about the safety and efficacy of biosimilar products,” he adds. “We also commend the agency for postponing guidance on interchangeable biologic labeling at this time.”

Andrew Powaleny, Senior Manager of Communications for Pharmaceutical Research and Manufacturers of America, declined to provide his group’s views on the draft guidance in advance of the deadline for written comments.

The Undermanned FDA

The FDA’s tentative decision in the draft labeling guidance not to require biosimilar companies to cite their own data from their own clinical trials may be a practical necessity given that the FDA clearly does not have the staff to review all that data. Budget begets staff, of course, and budgets have not been kind to the FDA’s biosimilars program. The ERG study proved that.³ User fees have simply not been sufficient for the FDA to provide necessary staff resources for prospective biosimilar marketers who pay for one of five types of meetings the FDA offers under its BsUFA program. The number of those meetings has far outpaced what the FDA projected when the user-fee program was put in place. There were 59 BPD program participants as of November 2015. When the BsUFA went into effect, the FDA had anticipated a total of 11 participants in the BPD program by FY 2015.

In December 2015, the FDA held a meeting to get input on the changes it needs to the biosimilar fee program. Any modifications would be made by Congress when it reauthorizes the BsUFA. David R. Gaugh, RPh, Senior Vice President for Sciences and Regulatory Affairs at the GPhA, says the meetings the FDA holds with potential biosimilar sponsors are extremely useful, but at times there are uncertainties about the outcomes. “With that said, the meetings should have well-defined objectives, clear outcomes, and meaningful decisions about future development options,” he explains. “Where the outcome or guidance is unclear to the sponsor, there should be an opportunity for a timely follow-up teleconference to promote better understanding, communication, and transparency.”

Critics Complain About Medicare Policy, Too

Criticism over biosimilar policy has also encompassed the Centers for Medicare and Medicaid Services (CMS). In October 2015, the CMS clarified its policy on reimbursement for biosimilars, which are paid for mostly under Medicare Part B, where physicians administer the drugs in their offices or outpatient infusion clinics provide the drugs. But reimbursement also goes through Part D when patients are able to self-administer. The new policy managed to offend nearly every pharmaceutical sector; both generic and brand-name industry associations decried a number of aspects of the new policy, in some instances the same aspect.

The final rule clarifies that the payment amount for a biosimilar is based on the average sales price (ASP) of all National Drug Codes assigned to the biosimilars included within the same billing and payment code.⁷ So all biosimilars citing Remicade as their reference drug would be paid the same. This is the way Medicare pays for chemical generics, which are considered multiple-source drugs. The CMS would assign the first biosimilar, such as Zarxio, a code under the Healthcare Common Procedure Coding System (HCPCS). All other Remicade biosimilars would have the same HCPCS code. Zarxio’s code is Q5101 Injection, Filgrastim (G-CSF), Biosimilar, 1 mcg. Zarxio would then pick up a modifier to help track its use and potential adverse effects. For Zarxio, that would be ZA-Novartis/Sandoz.

Sandie Preiss, Vice President of Advocacy and Access for the Arthritis Foundation, says, “We believe that treating biosimilars as multiple-source products stands counter to other biosimilar policies and the intent of Congress in passing the Biologic Price Competition and Innovation Act. Further, this proposal is not consistent with other CMS reimbursement policies, which treat biosimilars as single-source drugs within certain Part D programs and Medicaid.”

The Cost of Biosimilars Is at Issue

Based on the experience in Europe, where biosimilars have been available longer, it had been a given that a biosimilar coming onto the U.S. market would have a price somewhere in the neighborhood of 15% to 25% lower than the reference drug. But early anecdotal experience with Zarxio doesn’t bear that out.

Vizient’s Lucio says the prices of Neupogen, Granix, and Zarxio have all come down between 15% to 20% since Zarxio’s introduction in September 2015. Typically Neupogen is the most expensive of the three, with Granix and Zarxio trading second and third place depending on the market they are selling to. But the price difference between the three is normally not great. “Until you have two or three biosimilar providers for same-molecule competitors to branded [products], biologicals will not be priced definitively lower,” Lucio says.

Some of the other biosimilars now in the application phase at the FDA (there are seven or eight, but the FDA doesn’t confirm those numbers) will be much more likely to be self-administered than Zarxio or Inflectra. That means they will ostensibly be available for retail purchase, and therefore reimbursed under Medicare Part D and outpatient drug plans in the private sector or through the PPACA. A study from the consulting firm Avelere, published in April, found that Medicare patients in Part D plans are likely to pay more for biosimilars than for the reference drug.⁸ That is because the Part D plans, under federal law, get a discount from the brand-name manufacturer when a Medicare recipient hits the so-called “doughnut hole,” the gap in Part D coverage where a senior must pay more of the cost of a drug. The reference-drug manufacturer must provide rebates to Part D plan members who fall into that coverage gap. Biosimilar marketers cannot match those rebates. “Any voluntary point-of-sale discounts would be viewed by the OIG [Office of the Inspector General] as a kickback and would likely lead to punitive action,” says Caroline Pearson, Senior Vice President at Avalere.

“The unintended consequence of the ACA is that consumers have a financial disincentive to switch to a lower-cost biosimilar,” Pearson adds. “While the Medicare program will save money if beneficiaries take biosimilars, higher consumer out-of-pocket costs are a barrier to patient adoption.”
It may be that biosimilars will become a boon to patients, payers, and providers. But until the FDA moves more quickly to approve biosimilars and they start to populate therapeutic categories in numbers that lead to lower prices, their success won’t be a given.

Author bio: 

Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

Brand and Generics Companies Unite to Pressure FDA

P&T Journal - August 2015 - for the original online article go HERE or for a PDF version go HERE.

One wouldn’t think that the idea of drug companies red-flagging safety concerns about a product would be that controversial in this day and age. Yet the Food and Drug Administration (FDA) has encountered stiff opposition in its effort to allow generic drug companies to change their labels quickly, without prior agency approval, when they discover adverse effects in patients once their generic reaches the market. Brand-name drug manufacturers can do that via submission of a “changes being effected” (CBE) supplement, but generics manufacturers cannot. However, once the FDA reviews and approves the CBE supplement, all drug manufacturers selling that product must change their labels. That FDA review can take nine to 12 months, according to David Gaugh, Senior Vice President for Sciences and Regulatory Affairs of the Generic Pharmaceutical Association (GPhA).

A 2013 FDA proposal to put generics companies on the same “automatic” footing as brand-name companies¹ has raised all sorts of objections, from patent-holders and generics companies alike, on both ostensibly substantive and legal grounds. Gaugh says the proposed changes exceed the FDA’s authority and are contrary to provisions of the Federal Food, Drug, and Cosmetic Act. “The proposed rule would contradict Hatch-Waxman’s goal of encouraging competition, by driving competitors out of the market,” he adds. Generics companies are most worried about product liability lawsuits against them if they suddenly get the responsibility of unilaterally changing safety labels once adverse information about a drug they sell comes into their possession. Brand-name companies can be sued, and frequently are, for not adding new safety warnings to labels quickly enough.

Product liability suits are costly to defend, even when the company wins. In June 2015, for example, a state court in Philadelphia sided with Pfizer in a trial in which its labeling of Zoloft (sertraline) was at issue. Plaintiffs argued that Pfizer had failed to disclose that pregnant women taking Zoloft could deliver children with birth defects. The Zoloft label warns physicians to weigh the benefits of using the medication against its risks to pregnant women before prescribing it. Pfizer lost patent protection in 2006, and sertraline is now available in generic form.

Possible customer confusion also worries generics companies. Theoretically, numerous generics companies could update their labels with different safety warnings simultaneously if the FDA proposal becomes final. “We believe the methodology FDA is proposing with multiple manufacturers submitting different label changes will ultimately do more harm than good by creating confusion for all stakeholders,” says John Ducker, President and Chief Executive Officer of Fresenius Kabi U.S.A., which specializes in medicines and technologies for infusion, transfusion, and clinical nutrition. The Fresenius portfolio comprises more than 100 injectable drugs and approximately 400 dose presentations, including anesthetics, analgesics, and a wide range of anti-infective and other critical-care drugs.

It isn’t just the generics manufacturers who oppose the FDA proposal. So do brand-name companies and pharmacy groups. Jeff Francer, Vice President and Senior Counsel of the Pharmaceutical Research and Manufacturers of America (PhRMA), calls the FDA plan problematic. “By allowing multiple different drug warnings for the very same bioequivalent medicine when there’s more than one manufacturer of the same drug, the proposed rule would increase confusion for pharmacists, doctors, and other health care professionals, and put patients at risk,” he says.

The American Pharmacists Association (APhA) agrees that the plan could sow confusion and subject pharmacists to new liability, because they, physicians, and perhaps consumers might be obligated to check a new FDA website set up to track safety-label changes. Could a pharmacist be sued for dispensing a medication without telling a customer about a new safety alert that just popped up on an FDA website? The APhA thinks the answer may be “yes.”

“We would like FDA to clarify that health care providers, including prescribers and pharmacists, and patients would not be required to check a website for generic safety information before prescribing, dispensing, or using that medication, as the case may be,” states Thomas E. Menighan, Executive Vice President and CEO of the APhA. “Such a requirement could expose health care providers to new liability and would also interrupt established workflows for providers prescribing or dispensing these medications.” He wants the FDA to make it clear that any FDA “alert” website is for informational purposes only, and that providers, including physicians and pharmacists, are not required to check the website before prescribing or dispensing medications. As part of its proposal, the FDA would post new labels on a website immediately. Ostensibly, that would provide some clarity for consumers, according to the agency.

The PhRMA and the GPhA, often on opposing sides of regulatory battles, have issued a joint alternative proposal that the FDA is now considering,² to the dismay of consumer groups. It is called the expedited agency review proposal.

“This whole situation is complicated,” concedes Janet Woodcock, MD, Director of the FDA’s Center for Drug Evaluation and Research. At a hearing in March, Dr. Woodcock said that 86% of all drugs dispensed in the outpatient setting are generics, underlining the importance of generic drug labels.

Emotions Run High at Public Hearing

The political complexities bedeviling the FDA’s proposal were on full display at the public meeting the agency held on March 27, 2015.³ Six people told heart-breaking stories of children or themselves being hurt by generic drugs.

Emily Mitchell, a 29-year-old woman from Chattanooga, Tennessee, told of taking fluoxetine, the generic form of Prozac, after being diagnosed with obsessive-compulsive disorder. She continued to take it while pregnant. Her son was born with a congenital heart defect and died in her arms days later. She told the FDA hearing that she had watched a TV commercial while she was pregnant asking viewers whether they had a child with a heart defect, and if so, it might be because the mother had been taking Prozac or fluoxetine during pregnancy. “My heart sank,” she recalled. “I grabbed my medication bottle, and there wasn’t any type of warning on it about taking while pregnant. I want justice, and I want the FDA and all drug companies to put safety first.” Mitchell’s expenses to visit Washington were paid by the American Association for Justice, the professional lobby for trial lawyers.

Two representatives of different groups of African-Americans made conflicting statements. Derrick Humphries represented groups such as the National Association for the Advancement of Colored People and the National Urban League. Maryland State Senator Catherine Pugh is President of the National Black Caucus of State Legislators (NBCSL). Humphries said the FDA’s proposal jeopardizes patient safety, safe access for patients, physicians, pharmacists, and payer accessibility to generic medicines. He favored the PhRMA/GPhA alternative. Pugh said Humphries may be correct about the proposed rule limiting minority communities’ access to medications because it may add costs to generic drugs. But Pugh added, “We at NBCSL believe that safety of these drugs trumps costs, and unsafe generic brand-name drugs pose a threat to our communities, as it would others. We at NBCSL support the concept of making safety information for generic drugs available as soon as possible.”

FDA Responds to Supreme Court Decision

The FDA decided to propose the rule after a 2011 Supreme Court decision. The court ruled in PLIVA v. Mensing, by a 5–4 vote, that Gladys Mensing could not recover damages for debilitating injuries she received from a drug with an inadequate warning label because her prescription was filled with a generic version of the drug rather than with the brand-name version.⁴ The court had previously held in Wyeth v. Levine that federal law does not pre-empt failure-to-warn claims against brand-name drug manufacturers. The Mensing decision created an arbitrary distinction, whereby a court’s ruling on whether or not a consumer can obtain relief turned solely on the happenstance of whether his or her prescription was filled with a brand-name drug or a generic drug.

Brand-name companies have been allowed to make safety changes to their labels since 1985 via the CBE process. In 2013, the FDA proposed to give generics manufacturers the same opportunity by allowing them to file with the agency a CBE-0 supplement. The proposed rule also would amend the regulations to allow submission of a CBE-0 labeling supplement for certain changes to the “Highlights of Prescribing Information.”

The proposed rule requires a company with an approved abbreviated new drug application (ANDA)—that is, a generics company—to submit a CBE-0 supplement if the company obtains or receives new information that should be reflected in product labeling to accomplish any of the following objectives:

• To add or strengthen a contraindication, warning, precaution, or adverse reaction for which the evidence of a causal association satisfies the standard for inclusion in the labeling under §201.57(c), the requirements for full prescribing information in FDA regulations.
• To add or strengthen a statement about drug abuse, dependence, psychological effect, or overdose.
• To add or strengthen an instruction about dosage and administration that is intended to increase the safe use of the drug product.
• To delete false, misleading, or unsupported indications for use or claims for effectiveness.

The ANDA holder would be required to send notice of the labeling change proposed in the CBE-0 supplement, including a copy of the information supporting the change, to the holder of the new drug application (NDA) for the reference listed drug—that is, the brand-name company—at the same time that the supplement to the ANDA is submitted to the FDA (unless approval of the NDA has been withdrawn). To make the safety-related changes to drug labeling described in a CBE-0 supplement readily available to prescribing health care providers and the public while the FDA is reviewing the supplement, the FDA proposed to establish a dedicated Web page where the FDA would promptly post information about labeling changes proposed in a CBE-0 supplement.

Critics Make Multi-Pronged Attack on Proposal

Criticism of the proposed rule has centered on the possibility of consumer confusion when a generic label differs from the brand-name label. Concerns have also been voiced about higher generic costs, with a consultant to the GPhA publishing a controversial study forecasting a $4 billion-a-year hit to consumers. Those increased costs would arise as generics companies passed their expected and actual legal costs to consumers. Product liability suits could result from several scenarios, according to the GPhA:

• If the first ANDA applicant’s proposal is accepted, every other ANDA applicant that did not submit its own CBE-0 or that submitted a CBE-0 with different language will be subject to state-law tort suits (including the NDA holder).
• If a proposal submitted by an ANDA applicant following the first ANDA applicant’s submission is accepted, the first ANDA applicant and every other ANDA applicant that did not submit its own CBE-0 or that submitted a CBE-0 with different language will be subject to state-law tort suits (including the NDA holder).
• If the FDA rejects the proposals submitted by all applicants and instead adopts its own language, all applicants will be subject to state-law tort suits (including the NDA holder).
• In each instance, all manufacturers will be subject to state-law tort suits for not making a change earlier.

Candis Edwards, Senior Vice President of Clinical Regulatory Affairs at Amneal Pharmaceuticals, says she is not convinced that the FDA’s proposed rule as it now stands would change some of the outcomes that some consumers have been experiencing. “And so Amneal is taking the position that we actually oppose the proposed labeling rule,” she states. She reiterates a common theme sounded by representatives of generics companies: An active ingredient can be sold in generic form by many companies, sometimes as many as 20. Amlodipine has 29 different ANDA approvals listed in the FDA’s Orange Book.

Douglas Boothe, Executive Vice President and General Manager for Pharmaceutical Products at Perrigo Corporation, says, “Currently, there are over 300 companies with 15 or more approved ANDAs, some of those ANDAs held by companies marketing over-the-counter [OTC] products.” He wants OTC products removed from the scope of the proposed rule.

Generics companies have procedures for monitoring adverse effects, of course. Marcie McClintic Coates, Vice President and Head of Global Regulatory Affairs for Mylan, Inc., says interpreting post-marketing safety data is complex. It involves analysis of post-approval clinical data, detailed review of adverse drug experience reports, the context of relevant clinical studies, estimates of drug usage, adverse drug experience reporting dates, estimates of background, and rates of the adverse event, among other relevant information. According to Coates:

Generic companies lack access to all of the required data to make a scientifically substantiated label change; although, the rule as written would require generics to unilaterally make label changes and distribute the label before FDA’s review of this comprehensive data. As a result, patient safety would be compromised when generic drug manufacturers distribute revised labeling that also includes risk information that FDA may later determine, based on the full dataset, is not scientifically accurate.

The GPhA–PhRMA alternative would establish defined time parameters for the FDA to act on label changes that are made following the FDA’s receipt and review of new safety information from either an NDA or ANDA holder, or following receipt of data through the sentinel system or any other database that appears to suggest a need for a label change. If the FDA decides a labeling change is warranted, it would notify all NDA and ANDA holders within 15 days, and they would have 30 days in which to issue revised electronic labeling.

Countering Industry Arguments

An economist working for the American Association for Justice disputed the $4 billion estimate of added costs to consumers made by Alex Brill, CEO of Matrix Global Advisors. The FDA contends that although the proposed rule would eliminate the pre-emption of certain failure-to-warn claims with respect to generic drugs, it would nonetheless not result in higher costs to generic manufacturers. “I find these two assertions to be patently inconsistent,” Brill states.

But Frank Ackerman, Senior Economist of Synapse Energy Economics, said the Brill estimate was fundamentally mistaken on three separate grounds: in terms of the understanding of what the cost–benefit analysis should include, in terms of the specifics of the calculation, and in terms of the significance of the calculation were it found to be correct. His major criticism is that Brill based his calculation on what American industry in general spent on product liability insurance in general between 1980 and 1984. “So this is a fresh up-to-the-minute picture of what product liability insurance cost when President Reagan first thought it was morning in America,” Ackerman chides.
Public Citizen’s Health Research Group disputes the contention that generics companies do not have enough information to change safety labels unilaterally, without the FDA’s approval. “You don’t need access to the totality of the data to make important safety updates,” says Michael Carome, MD, Director of the Health Research Group. His group has successfully petitioned the agency to add new safety warnings, including boxed warnings, to the labels of multiple drugs, based on its review of FDA reports and the scientific literature. Its petition to add boxed warnings about the risk of tendon rupture to the labels of all fluoroquinolones, many of which were generic, was based on reports in the FDA Adverse Event Reporting System. “Generic companies have access to that same data,” Dr. Carome states.

The PhRMA–GPhA alternative doesn’t sit well with some groups, either. The Alliance for Justice argues that the alternative would shelter brand-name companies from product liability lawsuits once the first generic competitor enters the marketplace. At that point, changes to either the brand-name or generic label would require prior approval by the FDA. No longer would manufacturers be permitted promptly to update a safety warning in advance of the FDA’s review of the change, irrespective of the critical safety information that the change may provide. So a drug company could defend itself by saying: “The FDA approved our change.”

Even the AARP, which submitted a brief in the 2011 Supreme Court case supporting Gladys Mensing and which believes generics companies should be liable for labeling under state tort law, has problems with the FDA’s proposed rule. David Certner, Legislative Counsel and Legislative Policy Director for Government Affairs, explains the AARP’s concerns:

It is essential for generic drug manufacturers to be able to make appropriate updates to their labeling without having to wait for changes to be initiated by a brand-name drug manufacturer. While the AARP wholeheartedly supports the goal of ensuring new drug safety information is available to consumers as quickly as possible, we do have some concerns that the proposed rule could lead to inconsistent labeling information on multiple versions of equivalent drugs for a substantial period of time. The resulting confusion could affect confidence in generic drugs and complicate decision-making conversations between providers and consumers about appropriate drug therapies based on their safety, efficacy and quality.

The AARP’s alliance with the drug manufacturers on this issue probably spells withdrawal of the FDA’s original proposal and issuance of a new proposal that hews closer to what the PhRMA and GPhA have proposed.

Author bio: 

Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

Generic Prices Take Flight

P&T Journal - December 2014 - for a PDF copy of the published version go HERE.

The FDA Is Struggling to Ground Them

Over the past few years, safety and effectiveness have been the issues plaguing generic pharmaceuticals. But concern has largely faded about the quality of active pharmaceutical ingredients manufactured in places such as India or China, or the bioequivalence of products such as Budeprion XL 300 mg. Now a new series of question marks hovers over generic drugs.

The price of generics looms largest. Still prized for their low cost, some generics have lifted off into the dollar stratosphere—though admittedly they haven’t reached the moonlike some new brand-name drugs, such as Gilead’s Sovaldi. That said, the number of generics posting higher prices, and the height of those leaps, worry consumers, payers, and some members of Congress.

A variety of reasons account for the increases. Loss of momentary competition in a category because one manufacturer stops producing, for any number of reasons, comes into play. So does the dropping of product lines. New products in existing generic markets find the door to entry barred, sometimes by competitors already selling into that market, sometimes by a Food and Drug Administration (FDA) besieged by applications and understaffed to handle them.

The FDA must approve abbreviated new drug applications (ANDAs) filed by generic drug companies, and the agency was thought to be making big strides in light of $300 million a year in new user fees from generic companies thanks to the 2012 Generic Drug User Fee Amendments (GDUFA). The fees were supposed to guarantee faster approval, leading to lower costs to companies and lower prices for new drugs that would be introduced more quickly.¹ But some industry experts think that GDUFA has failed to deliver, and that the FDA has gone backward on approval speed.

Walter Jump, President of Cornerstone Regulatory (a consulting firm that works with both generic and brand-name companies), says that costs for industry have increased since the passage of GDUFA. “Nothing provided for in GDUFA will decrease costs to industry. Although the Generic Drug User Fee Amendments propose to reduce the current delays in the drug approval process, currently there is no proof that the delays in the current approval process are being addressed,” Jump says. In fact, the FDA’s ANDA backlog has increased. Currently, Mylan Inc. has 288 ANDAs awaiting FDA approval that represent $111.5 billion in annual brand sales, according to IMS Health. Forty-three of these pending ANDAs are potential first-to-file opportunities, representing $28.7 billion in annual brand sales for the 12 months ending June 30, 2014, IMS Health adds.

During a meeting at the FDA on September 17, 2014, called to air a number of GDUFA issues, David R. Gaugh, RPh, Senior Vice President for Sciences and Regulatory Affairs of the Generic Pharmaceutical Association (GPhA), said that in 2013, the median time for generic drug approvals jumped to 36 months and is projected to reach 43 months in 2014 once the final numbers are in.

Jump hypothesizes that the slowdown in approval times may be related in part to the need for more-experienced FDA drug reviewers to spend part of their time training new drug reviewers who have been hired thanks to the $300 million infusion. Such training will take time to ensure that all these new employees are consistent in their reviews.

“The generic supply chain has become very fragile. For many generic drugs, there are only a few suppliers,” says Adam J. Fein, PhD, of Pembroke Consulting, Inc. “Any supply shock to the system, such as a manufacturing problem or FDA action, can rapidly create a shortage because alternative capacity isn’t ramping up to meet demand.”

Tetracycline shortages, for instance, have resulted in much higher generic prices. Watson Pharmaceuticals stopped producing tetracycline tablets in December 2013 and was acquired by Activis PLC in 2014. Activis has not restarted production. As of October 2014, Teva Pharmaceutical Industries Ltd., a one-time producer of tetracycline, was no longer selling the product because of a raw material shortage. Heritage Pharmaceuticals Inc. markets the brand-name version of tetracycline, called Achromycin V. In October 2013, Heritage announced it was making available generic tetracycline HCl capsules in 250- and 500-mg strengths. Not surprisingly, then, with only one manufacturer in the game, the price of tetracycline 500-mg and 250-mg tablets increased from $0.05 and $0.06 per capsule in July 2013 to $8.59 and $4.26 in July 2014. Those are increases of 17,714% and 7,340%, based on pricing data from Drug Channels, a website written by Dr. Fein.²

The Importance of Generics

The importance of generics to slowing the growth of health care costs is obvious. The FDA has approved more than 8,000 generic equivalents to brand-name drugs; as a result, generics represent more than 85% of all U.S. prescriptions and have saved U.S. consumers and the health care system $1.5 trillion in the past decade alone, according to the GPhA.

For years, the discounted price of generics was the glittering jewel in their crown. Not any more. Escalating prices have hit hospital pharmacies, drug stores, and consumers alike. This year, Walgreens fired its chief financial officer and the president of its pharmacy, health, and wellness division because they underestimated the cost of generic drugs and overestimated pharmacy unit earnings for the fiscal year ending in 2016.

Insurance plans are responding in order to mitigate the price pressures. Dr. Fein states, “Some payers are already establishing a ‘nonpreferred’ or ‘more costly’ generic tier for products that have experienced significant inflation. If generic inflation continues, I expect to see more plans with multiple generic tiers.”

Hospitals are suffering from generic drug price increases, too, since drug costs for any inpatient “event” are bundled into the cost of reimbursement for that patient, whether Medicare, Medicaid, or a private insurer is paying. Any generic drug price increase will not be reflected in the global payment from private or public insurers, paid on the basis of a diagnosis-related group (DRG)—at least not any time soon. True, generic costs make up a tiny percentage of any DRG reimbursement. But over the course of a year, they may add up. Hospitals also face potential cost implications on the outpatient pharmacy side. “The average selling price for the generic will not be updated for up to six months after the actual price increase, meaning hospitals will have to pay the difference for that six-month period,” explains Bill Woodward, MS, RPh, Senior Director of Pharmacy Contracting for Novation, a contracting and information company that serves 100,000 members and affiliates of VHA Inc. and UHC, two national health care alliances; Children’s Hospital Association, an alliance of the nation’s leading pediatric facilities; and Provista, LLC.

Generic price increases have caught the attention of some in Congress. On October 2, Representative Elijah Cummings, ranking member of the House Committee on Oversight and Government Reform, and Senator Bernard Sanders, Chairman of the Subcommittee on Primary Health and Aging of the Senate Committee on Health, Education, Labor, and Pensions, sent letters to 14 generic drug manufacturers requesting information about the escalating prices they have been charging for generic drugs.³ “When you see how much the prices of these drugs have increased just over the past year, it’s staggering, and we want to know why,” says Cummings.

Huge Generic Price Increases

In their letters, Cummings and Sanders cited data from the Healthcare Supply Chain Association on purchases of 10 generic drugs by group purchasing organizations for which prices have skyrocketed in the past year. Among the citations:

• Albuterol sulfate, used to treat asthma and other lung conditions, increased 4,014% in price, from $11 to $434 for a bottle of 100 2-mg tablets.
• Doxycycline hyclate, an antibiotic used to treat a variety of infections, increased 8,281% in price for a bottle of 500 100-mg tablets (from $20 to $1,849).
• Glycopyrrolate, used to prevent irregular heartbeats during surgery, increased 2,728% in price for a box of 10 0.2-mg/mL, 20-mL vials (from $65 to $1,277).

It doesn’t appear that any of the 10 drugs cited in the letters are marketed by only one company, so competition should keep prices from breaking through the roof. But in some instances, that competition is limited. Albuterol sulfate is sold by Mylan and Mutual Pharmaceuticals. Doxycycline hyclate is sold by 10 companies, with three representing most of the market share. West-Ward, Inc., dominates the market for glycopyrrolate.

Mylan, Teva, and Lannett Company, Inc., are among the companies that received the Cummings/Sanders letter. The first two did not respond to a query asking for a response. In its 2013 annual report, Lannett said: “Gross profit improved considerably to $57 million from $39 million. As a percent of net sales, gross margin rose to 38% from 32%, with the increase primarily due to favorable sales mix, price increases, and enhanced manufacturing efficiencies.” Asked about the extent of product price increases, spokesman Robert Jaffe says, “Lannett’s management respectfully declines to be interviewed.”

Why the Price Hikes?

A number of factors can cause a spike in a generic price, justifiable or perhaps not. There are also reasons why drug prices won’t drop. A number of mega-consolidations have taken place in the industry over the past few years. One by one, generic companies are disappearing. Competition in each category is diminishing. Earlier this year, Mylan acquired Agila Specialties Private Ltd., giving Mylan a strong hold on the generic injectables market. In that instance, the FDA forced Mylan to divest drugs in a number of categories before it approved the acquisition. For example, Mylan divested etomidate injection, ganciclovir injection, and some other injectables to JHP Pharmaceuticals. Earlier this year, Par Pharmaceutical Companies, Inc., acquired JHP. Valeant Pharmaceuticals International, Inc., is trying to acquire Allergan, Inc., and promises, if successful, to put a plug in its research pipeline. Teva acquired Cephalon, Inc., in 2012. Also in 2012, Valeant bought Ortho Dermatologics, Inc., from Johnson & Johnson and Dermik Laboratories, Inc., from Sanofi.

New products are not entering the market as quickly as had been hoped in the wake of GDUFA passage. And when they do enter the market, it is after the manufacturer has spent more in development and regulatory costs than might otherwise have been necessary. The GDUFA was supposed to pave the way for eliminating ANDA approval backlogs by mandating, for the first time, that generic suppliers pay “user fees” to the FDA. In return, the agency committed to approving ANDAs—submitted when a generic company wants to sell a copy of a patented pharmaceutical—according to specified time frames. The fees amount to about $300 million a year. The GDUFA required the FDA to publish five guidance documents that lay out how the agency planned to meet the approval deadlines in its GDUFA “commitment letter.” For example, the FDA has committed to review and act on 90% of original ANDA submissions within 10 months from the date of submission in year 5 of the program, which begins on October 1, 2016.

Of course, generic companies themselves are responsible for many delays. They fight like Hatfields and McCoys over whether one or the other should have its ANDA approved, whether as the “first-time” generic in a category or as a new competitor to an existing generic. One example is Apotex Corporation’s filing of a citizen petition with the FDA in January 2014 to block Forest Laboratories’ generic version of Apotex’s Namenda XR (memantine hydrochloride extended release capsules). The Apotex drug was approved in June 2010 and first became available in June 2013. Apotex argued that since its drug only became available in June 2013, it would have been impossible, time-wise, for Forest to conduct the required bioequivalence studies. The FDA rejected the petition on June 12, 2014. Ross Maclean, PhD, Senior Vice President for Scientific and Regulatory Affairs at Apotex, did not return a call asking for comment.

In filing its citizen petition, Apotex was trying to prevent Forest from claiming 180-day market exclusivity, which has price implications, too. (Forest disappeared last February when it was swallowed by Actavis). The 180-day period was put into law in 1984 as part of the Hatch-Waxman Drug Price Competition and Patent Term Restoration Act of 1984. It is supposed to function as an incentive for a generic company to be the first to submit an ANDA for a brand-name drug coming off patent. Since GDUFA was signed into law, at least 19 first applicants have forfeited 180-day exclusivity because they failed to get timely FDA approval, according to the GPhA. Typically, once a paragraph IV ANDA is filed, a 30-month clock starts if the brand-name company challenges the generic company’s right to sell a product because of patent infringement. If the FDA fails to review an ANDA prior to the expiration of the patent being challenged, the 180-day exclusivity may be lost. With the patent or patents expired, any generic company can sell a copy of that brand-name drug. So that 180-day “incentive” is not much of an incentive these days.

The confusion over exclusivity can affect pricing in opposite directions. Michael D. Shumsky, an attorney for Kirkland and Ellis, LLP, and an outside counsel to Teva, explains that if a first generic applicant believes it is entitled to exclusivity, it typically will produce enough product to satisfy the entire market. But it could wind up with substantial inventories that it will never be able to sell if the FDA subsequently holds that the applicant is not entitled to exclusivity. The resulting losses are then passed on to consumers in the form of higher prices, which undermines the statute’s basic goal of lowering prescription drug costs.

The reverse is also true. If a first generic applicant believes that the FDA will find it has forfeited or otherwise lost its exclusivity, it may not prepare sufficient quantities of a product to supply the market—leaving it unable to fulfill consumer demand in the event that the FDA finds the applicant has maintained its eligibility for exclusivity. That likewise increases costs for consumers.

The GDUFA: Promises and Pitfalls

The 180-day exclusivity period and the FDA’s policies for granting it were among the topics on the agenda of the FDA’s September 17 meeting. Also up for discussion were the five draft guidance documents the agency has issued as follow-ups to its GDUFA commitment letter. At the time of the GDUFA’s passage in 2012, more than 2,700 generic applications were awaiting FDA approval, and the average approval time for an application stretched beyond 30 months—five times longer than the statutory six-month review time called for by the Hatch-Waxman Act. That backlog had been reduced to about 2,100 when Greg Giba announced his departure as director of the FDA’s Office of Generic Drugs (OGD) in March 2013. Giba, whose appointment had been announced only the previous July, quit because a reorganization left him with less resources than he felt he needed. A new permanent director has not been appointed.

But the ANDA backlog (Figure 1) remains a cause célèbre for the generics industry. So does its impact on company costs, which affects product pricing. The FDA has said several times that one objective of GDUFA was to reduce costs to generic manufacturers. But Jump, of Cornerstone Regulatory, says that costs for industry have increased since GDUFA’s passage:

In fact, since the law has gone into effect, user fees have been instituted, requirements for the production and submission of three registration batches for each product strength, and the refusal to accept stability data with less than six months of stability data have all increased the costs to industry. The potential for earlier approvals, which has not been seen to date, can at best only potentially increase industry revenue, but it cannot decrease development costs.

The September 17 meeting, held as the October 1, 2014, start of the first iteration of GDUFA timetables was looming, touched on five guidance documents the FDA had issued in draft form. They are supposed to give the industry a clearer idea of what the FDA expects in an ANDA in various areas. The five guidance documents are:

• ANDA Submissions—Content and Format of ANDAs⁴
• ANDA Submissions—Refuse to Receive for Lack of Proper Justification of Impurity Limits⁵
• ANDA Submissions—Amendments and Easily Correctable Deficiencies Under GDUFA⁶
• ANDA Submissions—Prior Approval Supplements Under GDUFA⁷
• Controlled Correspondence Related to Generic Drug Development⁸

Most of these draft guidances were published this past summer. They are too mind-numbingly arcane to discuss here. Suffice it to say that the response to most of the draft guidance documents has not been particularly positive. With regard to “Content and Format of ANDAs,” Jump complains, for example, that his clients “are dismayed” that the FDA is requesting that the cover letter contain the same information contained in the common technical document (CTD) and the 356h form. This is an unnecessary duplication of information. “Repeating the same information in multiple places only increases the chances that inadvertent mistakes can be made,” Jump states. “These inadvertent mistakes are frequently the cause of deficiency comments from the agency asking which information is correct.” The CTD is the international format for what should be included in the ANDA. For instance, manufacturing site and contact information are requested in the FDA 356h form and specific sections defined within the ANDA. Now companies will have to include that same data in a third place, the cover letter, increasing the chances that there may be inadvertent discrepancies among the three. An FDA reviewer might kick back the application for that reason.

The problem these days is that reviewers aren’t “kicking out” approved applications. “I agree there are some major issues at the Office of Generic Drugs,” says Bob Pollock, Senior Advisor and Outside Director to the board of Lachman Consultants. Pollock, who left the FDA in 1994 as Acting Deputy Director of the OGD, writes a blog on the Lachman website. “One thing that surprises me is that there is more emphasis on process, policy, and procedure. They also need more attention to moving the freight. Folks in the industry are scratching their heads, wondering when things are going to improve.”

Author bio: 

Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

The Clinical Trial Model Is Up for Review

P&T Journal - October 2014 - for a PDF copy of the published version go HERE.

Time, Expense, and Quality of Results Are at Issue, As Is the Relationship to Drug Pricing

The storm seeded by the pricing of Sovaldi has led payers, patients, and the federal government to seek cover from what some view as problematic pharmaceutical industry practices, including a few partly outside of the industry’s control.

Sovaldi’s $84,000 list price for a course of treatment has raised questions about how a company such as Gilead Sciences, Inc., decides on a price tag. The answer may hinge—in small or large part, depending on who’s talking—on the length and complexity of the clinical trials a company must conduct in order to win approval from the Food and Drug Administration (FDA) for the new drug. Sundeep Khosla, MD, Dean for Clinical and Translational Science at the Mayo Clinic, says clinical trials are subject to the “Valley of Death.” He explains, “This refers to the fact that the average length of time from target discovery to approval of a new drug currently averages approximately 14 years, the failure rate exceeds 95%, and the cost per successful drug exceeds $2 billion, after adjusting for all of the failures.”

According to Robert J. Meyer, Director of the Virginia Center for Translational and Regulatory Sciences at the University of Virginia School of Medicine, “It is well documented that one of the major categories of expenditure in developing a new therapeutic is the expense of conducting randomized, phase 3 clinical trials, which are intended to address the regulatory expectations in the U.S. and beyond.” However, Meyer doesn’t think the clinical trial costs for Sovaldi are substantially higher than those for similar drugs, much less those with a list price of $84,000 for a 12-week regimen. “I think pricing is driven by what the market will bear, including the value of the drug’s ability to forestall later disease,” he states. “But I can’t say clinical trial costs have no relationship to the price of drugs. The company must amortize those costs, especially the costs of the 50% of drugs that fail in phase 3 trials.”

Gilead has declined to provide data on the cost of clinical trials for Sovaldi. On March 20, 2014, U.S. Rep. Henry Waxman (D-Calif.) and colleagues sent a letter to John Martin, PhD, Chief Executive Officer of Gilead, asking for information about the methodology Gilead used to establish Sovaldi’s pricing.¹ One of the things Waxman wanted to know was “the value to the company of the expedited review provided under the priority review and breakthrough therapy designation and how any savings provided by the expedited review factored into pricing decisions for the drug.” The priority review and breakthrough therapy designations are new tools that Congress has given the FDA in the past few years that enable the agency to approve a drug faster based on abbreviated clinical trials.

Cara Miller, a Gilead spokeswoman, says the company met with Waxman’s staff to “share our perspective on the scientific and medical evidence for treating a disease that causes significant morbidity and mortality in the U.S. and the benefits of Sovaldi.” But that perspective is not public, nor has Waxman himself published anything that Sovaldi may have shown his staff. Miller declines to discuss the costs of Sovaldi clinical trials or the relationship of those costs to Sovaldi pricing.

A Waxman spokeswoman says Gilead was “not able to answer all our questions, and [was] not able to provide us with information that adequately justified the cost of the drug.”

It is not just the cost of conventional clinical trials that is at issue, but also their inclusiveness. In an interview with the Wall Street Journal on August 4, 2014, Arvind Goyal, MD, Medical Director of the Illinois Department of Health Care and Family Services, raised questions about the population enrolled in the Sovaldi clinical trials.² He complained that Gilead did not include people with alcohol and drug problems, which are prevalent among his state’s Medicaid population. “If someone is using a street drug such as heroin,” he said, “I can’t be sure they are compliant taking Sovaldi. It is a total waste.”

Miller, the Gilead spokeswoman, says: “Patients with ongoing illicit drug use such as cocaine and heroin were excluded from the clinical trials. Patients who were actively abusing alcohol were excluded from the clinical trials. However, a history of alcohol abuse or ongoing alcohol use was not exclusionary; approximately 5–10% of patients in the phase 3 studies self-reported this medical history.”

Congress Looks at Possible Reforms

Because of the many structural imperfections that prevent faster, cheaper, more accurate clinical trials, Democrats and Republicans in Congress are considering what they can do to inject doses of modernity into a dusty system. The House Energy and Commerce Committee, as part of its year-long “21st Century Cures” hearings, has been exploring varieties of unconventional clinical trials—often grouped under the rubric of “adaptive” clinical trials—and looking at ways useful flexibility can be injected into FDA requirements. At hearings in July, Jay Siegel, MD, Chief Biotechnology Officer and Head of Scientific Strategy and Policy at Johnson & Johnson, said, “I believe that we now face an extraordinary opportunity to reinvent our approach to clinical trials and, as a result, to greatly increase the quality of medical care and the quality of life itself.”
The President’s Council of Advisors on Science and Technology succinctly stated the problem in its 2012 report on drug innovation:³

Unfortunately, there is broad agreement that our current clinical trials system is inefficient. Currently, each clinical trial to test a new drug candidate is typically organized de novo, requiring substantial effort, cost, and time. … Navigating all of these requirements is challenging even for large pharmaceutical companies, and can be daunting for small biotechnology firms.

U.S. Rep. Joe Pitts (R-Pa.), Chairman of the House Health Subcommittee, detailed the shortcomings of the clinical trial system when he welcomed Janet Woodcock, MD, Director of the FDA Center for Drug Evaluation and Research, to a hearing on July 11, 2014. “Widespread duplication of effort and cost also occurs because research is fragmented across hundreds of clinical research organizations, sites, and trials, and information regarding both the successes and failures of clinical trials is rarely shared among researchers,” Pitts said. “It is often difficult to identify potential participants due to a shortage of centralized registries, low awareness of the opportunity to participate in clinical trials, low patient retention, and lack of engagement among community doctors and volunteers.”

Dr. Woodcock said the FDA has been doing what it can to reduce clinical trial requirements, consistent with maintaining patient safety, but “some of these challenges need to be addressed by those outside of FDA.” The FDA issued guidance in December 2012 on clinical trial enrichment strategies. She pointed to Novartis’ Zykadia (ceritinib), a new drug for patients with a certain type of late-stage, non–small-cell lung cancer, which the FDA approved in April 2014 via a breakthrough therapy designation. “It took less than four years—versus the roughly 10 years it used to take—from the initial study of the drug to FDA approval,” she stated.

The FDA granted Zykadia a conditional approval based on a phase 1, single-arm study of 163 people that investigated the maximum tolerated dose, safety, pharmacokinetics, and preliminary antitumor activity of Zykadia. Dana Cooper, a Novartis spokeswoman, declined to provide details on what the company has spent so far on clinical trials for the drug. “As we manage our research investment across a portfolio of medicine in development, we do not provide estimates of research costs for individual molecules,” she says. The company is continuing phase 2 and 3 trials as a condition of FDA conditional approval. The average wholesale price for a 30-day supply of Zykadia at the recommended daily dose is $16,197, according to Red Book.

Recent FDA Efforts to Cut Approval Times

The cost of clinical trials and their required length to completion have been the subject of criticism within the pharmaceutical industry for some time. Over the past decade or so, Congress has provided the FDA with authority to approve new drugs more quickly in certain circumstances, sometimes on the basis of shortened clinical trials.⁴ With Sovaldi, for example, Gilead asked for and received a priority review, which reduces the FDA review goal date from 10 to six months. The FDA also awarded Sovaldi a breakthrough therapy designation, which allows a company to submit a new drug for approval based on preliminary clinical evidence “that the drug may have substantial improvement on at least one clinically significant endpoint over available therapy.” In addition, the FDA offers drug developers accelerated approval, which can be granted on the basis of studies establishing that the drug or biologic “has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.”

Some drugs the FDA has approved with its new authorities, based on truncated trials, have turned out to be problematic in the post-marketing period. Avandia and Avastin are two examples. “The recent history of drug misadventures provides numerous examples of rare but catastrophic side effects overlooked at current levels of testing in broader patient populations,” says Thomas J. Moore, Senior Scientist at the Institute for Safe Medication Practices and Lecturer in the Department of Epidemiology and Biostatistics at The George Washington University School of Public Health and Health Services.

Moore is skeptical about the FDA’s efforts to establish a new “alternative approval pathway for certain drugs intended to address unmet medical needs.” Congress directed the FDA to do so in the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012,⁵ the law that established the breakthrough therapy designation. The 2012 law also included language expanding the types of evidence the FDA can use to assess whether a surrogate endpoint is likely to predict clinical benefit and encouraged usage of a broader variety of endpoints for accelerated approval. Moore says the alternative approval pathway “could compromise patient safety, is unnecessary given seven existing expedited approval programs, has no clear public health justification for exposing patients to increased risks, and is insufficiently researched and documented to permit a clear evaluation.”

The FDA held a hearing in February 2013 to seek input from industry and the public on the viability of a new alternative pathway. Paul Huckle, Chief Regulatory Officer for GlaxoSmithKline PLC, stated, “We believe that the proposed pathway should be considered in parallel, and in addition to, already existing regulatory pathways such as accelerated approval, fast track, priority review, and breakthrough therapy designation, and if implemented should be applied at the sponsor’s request.” The FDA has not published any draft, much less final, guidelines offering a new alternative pathway.

Need for More Flexibility and Infrastructure

Speeding up the FDA review process, though, is essentially nibbling around the edges of an antiquated system, where one drug is tested in a large population of people suffering from one disease, be that lung cancer, hepatitis C, or any of the conditions that afflict much smaller populations. There is broad agreement that this “one drug, one condition” methodology must change. Winds of change—actually, they are more like light breezes—are blowing through the hallways of contract research organizations and academic medical centers, which do the majority of clinical testing. The reforms include use of biomarkers to select participants, use of “adaptive” clinical trials sponsored jointly by drug companies, and establishment of nationwide academic networks with access to electronic medical records. Study participants are chosen because they have a specific genotype that is thought to be responsive to a specific agent. Large groups of patients across numerous academic centers are recruited because those genes are found in a very small percentage of those volunteers. Often new patients are recruited on a rolling basis, under a master protocol that test sites adhere to across the country. A number of agents are tested at the same time, each one in a separate small group consisting of patients who all have the same target gene.

Lung-MAP, which is testing five lung cancer agents, is a clinical trial now getting under way that uses many of the new clinical trial techniques. It is expected to screen as many as 1,250 patients each year for more than 200 cancer-related genomic alterations. Participants will eventually be divided into five “baskets,” each including patients with an identical genotype thought to be responsive to a single agent. Five agents are being tested by five companies, all of them cooperating. None of the five companies, on their own, could recruit that many patients. That kind of large population is important because each of the five biomarkers will be found in a very small percentage of people, so it is necessary to recruit large numbers in order to have enough participants in each of the five baskets.

Moving Straight From Phase 2 to Phase 3

“Another distinctive feature of Lung-MAP is the ability for a drug that is found to be effective in phase 2 to move directly into the phase 3 registration components, incorporating the patients from phase 2,” explains Roy S. Herbst, MD, PhD, Ensign Professor of Medicine, Chief of Medical Oncology, and Associate Director for Translational Research at Yale Cancer Center. “This unique statistical approach can save both time and the number of patients that would be needed to program compared to conducting separate phase 2 and phase 3 studies.”

As its endpoint, the trial is using “median progression-free survival,” which Dr. Herbst concedes is a surrogate endpoint. He explains that any of the five agents could show a positive effect as early as the first year. But clearly nothing is certain: the efficacy of the agents, the viability of the trial’s structure, or the cost savings to the five companies compared with what they would have spent had they embarked on singular, conventional trials.

Not everyone thinks the potentially fast transition from phase 2 to phase 3 is a blessing. “While this sounds attractive, this kind of adaptive trial raises many significant issues—not the least of which is the loss of the ability to conduct a true ‘learn and confirm’ development paradigm, which is the very heart of cogent drug development,” explains the University of Virginia’s Meyer. “If there is any message in the rising failure rate of phase 3 trials, I think it is that the increasingly parallel drug trials paradigm, rather than the serial learn-and-confirm model, does not allow for enough careful thought of past results to properly inform future designs.”

That kind of skepticism may explain why the FDA has not opened the door very wide to adaptive studies. The agency published draft guidance in March 2010,⁶ but final guidance has never appeared. Industry generally applauded the FDA’s draft, but felt it was too restrictive. The draft talked about “familiar” and “less familiar” approaches, and seemed to bestow approval on the former and skepticism on the later. “The less familiar design methods incorporate methodological features with which there is little experience in drug development at this time,” the draft stated.

Industry and Academia Slow to Help

To some extent, the fact that clinical trials take as long and cost as much as they do is partly the fault of the companies that conduct them, according to Meyer. He calls some of the steps in phase 3 trials “self-inflicted.” A recent Tufts University study⁷ showed the number of endpoints and procedures in clinical trials went up more than 60% from 2002 to 2012. At the same time, this study showed that a minority of the procedures, endpoints, and related trial costs in phase 3 trials were driven by regulatory requirements. This study estimated that non-core elements of these trials cost $4 billion to $6 billion in aggregate spending across the industry.

A significant portion of those “self-inflicted” costs come from companies reinventing the wheel every time they conduct a clinical trial. Those costs include setting up a network and developing and implementing a protocol. Some of those costs disappear when companies and academic centers avail themselves of clinical trial networks. But these networks are few and far between.

The National Institutes of Health inaugurated a Clinical and Translational Science Awards (CTSA) program in 2006.⁸ It is active at 62 sites, mostly academic medical centers, and is funded at a level of nearly $500 million. The hope was for those centers to work together on specific clinical trial projects. A 2013 report from the Institute of Medicine (IOM)⁹ said the program is “contributing significantly” to clinical research. But based on the number of recommendations made to improve the program, that praise seemed pro forma. The report described the program as being in an infant stage, with little cross-center or center-public collaboration, and hamstrung by a bureaucratic structure. It said: “The IOM committee envisions a transformation of the CTSA program from its current, loosely organized structure into a more tightly integrated network that works collectively to enhance the transit of therapeutics, diagnostics, and preventive interventions along the developmental pipeline; disseminate innovative translational research methods and best practices; and provide leadership in informatics standards and policy development to promote shared resources.”

Even for a clinical trial network such as the one being developed by Lung-MAP, one can see what a huge task it is to assemble 5,000 patients, obtain and massage their personal health data, and de-identify that data. Paula Brown Stafford, MPH, President of Clinical Development at Quintiles, a major contract research organization, thinks Congress should create a central repository of accessible, securely de-identified patient-level data and make it available for research use through appropriate licensing. “And just think about the amount of time that would be cut out of the trial,” she says, “from four years [for] finding patients down to 14 days because we have the data that gives us access to identify the patients.” Dr. Herbst says, for example, that Lung-MAP registered 10 patients in the first two months the trial was in progress.

No one would argue the merits of a more national clinical trial infrastructure, backed by national disease registries and fueled by electronic medical records. The use of biomarkers to select trial participants is a bit more dicey, given its reliance on diagnostic tests that may or may not have received FDA approval.

Congress is likely to include clinical trial reforms in the next reauthorization of the Prescription Drug User Fee Act (PDUFA). In past reauthorizations, the emphasis has been on speeding FDA approval, not clinical trials. Helping companies get to the FDA with a new drug application more quickly and more cheaply, in a way consistent with protecting safety and efficacy, should be the focus this time. Given the importance of this objective, it shouldn’t be necessary to wait until 2017, when PDUFA is scheduled to be reauthorized for the sixth time.

Author bio: 

Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

New U.S. Drug Tracing Regime Stirs Concern

P&T Journal

July 2014 - for a PDF copy of the published version go HERE.

A mob descended on the big conference room at the Food and Drug Administration (FDA) White Oak campus in Maryland on May 8 and 9. It wasn’t a revolt, but change was in the air and the crowd was on edge. The FDA, at Congress’s direction, was considering how to implement a new law that requires manufacturers, wholesalers, and pharmacies to trace drug products as they move through the distribution chain.

The law kicks in on January 1, 2015. Between now and then, and even afterward, some degree of turmoil will enfold pharmaceutical industry players as they figure out how to comply with the new regulatory regime.

During the May 8 morning session, while discussing the provisions of the Drug Supply Chain Security Act (DSCSA) that Congress passed last November,1 Connie Jung, RPh, PhD, the FDA official running the workshop, looked up at the audience, stopped, and said, “I hear some snickering.” The unhappy murmuring was directed at some of the drug product tracing provisions in the Pharmacy Distribution and Security Act (PDSA), one of the two titles in the DSCSA.

The FDA held the two-day workshop to get industry input on the draft guidance it is scheduled to release in November. It will guide drug manufacturers, wholesalers, and pharmacies on how to comply with the first wave of DSCSA requirements. Starting January 1, 2015, manufacturers will have to give wholesalers compliance information, either on paper or electronically, in the form of transaction information, transaction statement, and transaction history (TI/TS/TH). That will be a single document called the “DSCSA compliance document.”

The wholesaler, who is next to receive ownership, makes some changes and sends a clean DSCSA document to the pharmacy. If a secondary distributor is part of the chain, he passes along information, too. The pharmacy must verify the document, determining that the drugs it has received are the drugs that originated with the manufacturer. The pharmacy has to record the information, save it for six years, and be able to retrieve it in the event that the manufacturer or the FDA asks the pharmacy to search for “suspect” or “illegitimate” products, which the law defines. Moreover, the pharmacy cannot even accept a product unless it comes with a transaction history.

From January 1, 2015, to November 27, 2017, products will be traced by their lot numbers. After that, manufacturers must imprint unique serial numbers on each unit-level product and package, introducing a much more accurate tracing and tracking system.

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Law’s Idiosyncrasies Complicate Compliance

The law contains some idiosyncrasies that will complicate implementation in some instances. For example, the pharmacy’s life will be a little easier when it receives ownership from a primary wholesaler: McKesson, AmerisourceBergen, or Cardinal. In that instance, the primary wholesaler will send a paper DSCSA document to the pharmacy. The TI/TS/TH will be on the document, but the lot number won’t be included. It will be printed on the container of 500 pills or on whatever unit container arrives.

The primary wholesalers were exempted from providing lot numbers because they argued to Congress that it isn’t feasible. That is because they put many different products with different lot numbers into a single container destined for a single pharmacy. The lot numbers are printed on each package. They cannot be individually scanned and uploaded to a database because of the limitations of technology. So considerable manual effort is needed to record those lot numbers and tie them to the DSCSA document. The wholesalers did not want to do that, and they implied there would be a cost impact if they were forced to do so.

Congress, in its wisdom, or in acceding to political pressure, exempted them, thinking that counterfeits are not an issue when the primary wholesaler buys directly from the manufacturer. So why worry about lot numbers? There are not going to be any counterfeits in that shipment. Of course, the absence of lot numbers on documentation makes it harder for the pharmacy to trace a particular container in the event of a recall.

Pharmacies also buy from secondary distributors, who can sometimes provide a product when the primary wholesaler cannot get it. The law says secondary distributors—the broken link in the chain where counterfeits typically come in—do have to send the pharmacy the lot number, but it does not have to be included in the paper documentation. That is a problem for pharmacies, says Susan Pilcher, Vice President of Policy and Regulatory Affairs for the National Community Pharmacists Association:

This is of great concern to the pharmacy community, particularly in light of the fact that during the PDSA discussions about this topic, there were some secondary wholesalers that indicated that the only manner in which they planned to “pass” the lot number information was on the actual bottle of medication that was being sold to the pharmacy. In order to be able to comply with the record retention requirement of the law and in order to respond to requests for information from the FDA, it is essential that pharmacies receive this information in a single document—whether in paper or electronic format.

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Initial Tracing Based on Lot Number

The DSCSA defines the elements that need to be included in each of the three items of the TI/TS/TH. For example, a TI must contain 10 pieces of data, including the lot number and the National Drug Code for each item in a particular shipment. Until November 2017, when manufacturers are required to print a unique serialized identifier on each unit package of each drug, the key piece of the TI is the lot number. If a manufacturer sells one million saleable items in a year, and it has 10 packaging events during that year where 100,000 units are packaged, then 10 different lot numbers would be assigned, and that number would be printed on each saleable unit (sometimes on a syringe, for example) packaged during that “event,” on the container the unit is packaged in, on the carton it is shipped in, and often on the pallet the carton is placed on.

The system based on lot numbers, however, is leaky. An unscrupulous distributor could purchase 10 cases of legitimate product from a wholesaler. He now has a record of what he received, including the lot numbers. Nothing prevents him from going out and purchasing 40 cases of counterfeit product. When he sells the counterfeit product to the pharmacy, the bad guy simply shows the legitimate document with legitimate lot numbers he received from the primary wholesaler. The pharmacy is none the wiser.

Compliance with DSCSA requirements starts January 1, 2015, for manufacturers and wholesalers, and six months later for dispensers, primarily pharmacies. Those initial requirements will be spelled out in greater detail based on the FDA’s publication of “Standards for the Interoperable Exchange of Information for Tracing of Human, Finished, Prescription Drugs, in Paper or Electronic Format.”

The FDA is supposed to issue that guidance by November. It will specify in more detail than the congressional bill exactly how documentation must be passed, i.e., in what form, and what that document should include. That will give trading partners precious little time to implement the form of their DSCSA compliance document, including getting software systems up and running (unless, of course, they are using paper). Even before the November deadline, the FDA has to issue separate guidance documents on what constitutes a suspect or illegitimate product. Complicating the issue further, the rules will be “draft” standards, meaning their longevity is in question. The final guidance, whenever that appears, may contain changes. Moreover, “guidance” has minimal legal standing. The FDA cannot fine a company for ignoring guidance.

“There is a lot the FDA has to do to stand this up,” says Anne Marie Polak, a director at FaegreBD Consulting, which represents the Pharmaceutical Distribution Security Alliance.

The short window between publication of draft guidance and the need to comply with that guidance explained why uncertainty was the order of the day at the FDA workshop. No one expects the FDA to issue that draft guidance before November, although there were multiple pleas from the audience to do so. The FDA could move more quickly if it had more staff assigned to this very technical task, and/or it had more technical people with knowledge of pharmaceutical industry distribution channels on its roster. But neither is the case. It was clear that the FDA officials writing the guidance have very little understanding of how each player in the distribution chain creates and receives shipping documents, and the differences within various categories of documents.

But perhaps the FDA cannot be faulted for lacking technical understanding. Even members of the audience were flummoxed over terminology and definitions, both regarding aspects of how the DSCSA document would be passed down the line and what form each of the 10 TI items must take. Differences of opinion from sector to sector were clear. For example, is a shipping document created by computer in PDF form and then sent to a trading partner an “electronic,” interoperable document? How many digits should a National Drug Code (NDC) have?

“What does interoperability even mean?” asked one attendee among the many who grabbed the microphone during the free-for-all discussion on the morning of May 9.

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Interoperable Tracing: “How” Will Be Difficult

Although a DSCSA document is supposed to be interoperable starting January 1, 2015, only those passed down in electronic format will be … maybe. The format favored by manufacturers and wholesalers is called the Electronic Data Exchange (EDI) Advanced Ship Notice (ASN), sometimes called an 856 document. EDI documents, including the ASN, are based on standards established by the American National Standards Institute. A second alternative is the Electronic Product Code Information Service (EPCIS) method, which is a GS1 global standard. Both are based on standards, so they offer the promise of uniformity within the drug distribution chain. The third option would be an electronic invoice.

The ASN is the tool of choice because it has been around for decades, there are numerous vendors around who can install the system, and it is being used by the major manufacturers and major wholesalers. But it is not used by the minor wholesalers and definitely not by the pharmacies, which could not receive an ASN. Still, the ASN appears to be the best choice, even though it is not structured to include the transaction statement or transaction history, which for now may be recorded in a text field without a standard format. The ASN is an electronic text document passed from manufacturer to wholesaler.

“While electronic is a favored approach, we are going to have to bend the ASN standard, which was never meant for trade history, in order to include previous transaction, and that may get somewhat unruly. EPCIS on the other hand is designed to provide current and past transactions but must be updated to support tracking by lot number and is much less widely used.” explains Bill Fletcher, Managing Partner at Pharma Logic Solutions, LLC.

The GS1 standard calls for the TI to be encoded in a Datamatrix two-dimensional barcode on the carton and the unit dose package. It was developed so that manufacturers can print a unique serial number on each package. The DSCSA requires this by November 27, 2017. Until them, tracing of products is done via the lot number, which, again, is one of the elements of the TI. The current version of GS1 does not allow for inclusion of lot numbers. Version 2.0 will be out this spring or summer. But that will not give manufacturers enough time to test it and incorporate it into their packaging, to the extent that manufacturers are using GS1 tags now (and few are).

Electronic invoices are problematic for a number of reasons. They could be sent in the form of a PDF. But invoices generally go to accounting offices, not shipping docks. And they arrive after, sometimes long after, a shipment has reached a wholesaler or a distributor. Nor is there a standard for electronic invoices. Lastly, the manufacturers include drug pricing information on an invoice, which they consider proprietary. That information is not in an ASN. The manufacturers are very wary of having their pricing out there for obvious competitive reasons.

But even the ASN and GS1 formats, electronic though they are, are not interoperable between one another. They do not conform to the same standards. For example, a trading partner can only use EDI to communicate directly with other trading partners that also use EDI. Even two trading partners both using ASN may have interoperability trouble. Sarah Spurgeon, Assistant General Counsel for Pharmaceutical Research and Manufacturers of America (PhRMA), says, “For example, even if all of a trading partner’s customers use EDI, each customer may receive unique data sets due to the customization that is allowed by the Healthcare Distribution Management Association’s (HDMA) implementation guideline for the ASN 856. Manufacturers customize their EDI mappings based on trading partner requirements.” But Spurgeon admits customization does not necessarily complicate DSCSA implementation, since mapping, testing, and adjusting of documents with each customer is something that occurs in the regular course of business.

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Paper Documents Aren’t a Good Option

Of course, a DSCSA document in paper form isn’t interoperable, either, although that is the least of its limitations. Pharmacies may have to log in hundreds of paper invoices a week, since they are not set up to receive ASNs and are not likely to make the investments to be able to do so. Some manufacturers send paper invoices in the form of packing slips with the shipment, in addition to an ASN, or by mail or fax to transfer relevant information to downstream trading partners. These methods are not based on a standard. But, probably for the benefit of their pharmacy customers, manufacturers are likely to send both ASNs and paper invoices with TI/TS/TH.

Paper packing slips have considerable shortcomings for pharmacies. They currently do not include the name of the manufacturer who initially owns the product; instead, they include the name of the entity shipping the product. Including both the transaction statement and transaction history will be cumbersome, especially for those trading partners that must transmit this information in a single document. There may be timing issues in cases of split shipments (i.e., portions of a single order shipped separately, possibly on different days), since the packing slip would only be attached to one portion of the shipment.

The paperwork burden is significant, too. Fletcher says that pharmacies could scan paper invoices with transaction information, turn them into electronic PDF documents, and search for particular lot numbers. “They might have some false returns but they could likely find documents with a specific lot number,” he states.

Pharmacies will have two alternatives to keeping paper invoices on the premises. They will be able to avoid having to log them in if they opt to subscribe to a cloud-based data supplier such as TraceLink. It counts eight of the 12 major U.S. drug manufacturers among its clients, all of whom connect to the TraceLink Life Sciences Cloud, using it to exchange their DSCSA documents with trading partners. For customers, there are subscription costs involved, of course. But TraceLink offers the advantage of a single connection to a company’s entire supply network while allowing manufacturers, wholesalers, pharmacies, and others to “talk” to one another in different electronic voices, such as ASN versus EPCIS, with TraceLink enabling each company to use its preferred format. One challenge facing the industry is that there is no common standard, as there is for EDI and EPCIS, for portal-based communications that were discussed as a key to exchanging DSCSA compliance documents with independent pharmacies.

The second alternative is for the pharmacy to pay its wholesalers to store the DSCSA documentation and give the pharmacy access to it if need be. Wholesalers aren’t going to do this for free.

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Transaction Elements: “What” Is Complicated, Too

Defining the “how” is probably a bigger challenge for the FDA than defining the “what.” One wouldn’t expect a lot of confusion there given that Congress listed the 10 items to be included in the transaction information.

But Anita T. Ducca, Vice President of Regulatory Affairs for the HDMA, says her members are confused about these elements: “number of containers,” “container size,” and “NDC number.” She adds:

It is illogical and unnecessary for the wholesale distributor to inform the dispenser as to the number of containers of the pharmaceutical it received from the previous owner. Including that detail may even be confusing and counterproductive by distracting the dispenser/purchaser from rapidly identifying other, and far more important, TI information for the customer’s purposes.

PhRMA’s Spurgeon says the “date of transaction” requirement could pose a particular challenge to manufacturers. “Industry relies on countless arrangements with complex and varying contractual terms related to sale, shipment, ownership, and billing and invoicing,” she explains. “A single approach to the term ‘date of the transaction’ that is applicable to every arrangement across the manufacturing industry is not feasible.” PhRMA wants the FDA to provide manufacturers with flexibility to determine what date to use for the “date of the transaction” as long as the date used is reasonable for a company’s given business arrangements and ensures the ability to establish the relevant chain of control for a product as part of an investigation consistent with the intent of the DSCSA.

Trading partners are also unenthusiastic, to say the least, about passing along a transaction statement. The DSCSA defines that statement as the sender affirming it:

1. is authorized as required under the DSCSA;
2. received the product from a person who is authorized as required under the DSCSA;
3. received transaction information and a transaction statement from the prior owner of the product;
4. did not knowingly ship a suspect or illegitimate product;
5. had systems and processes in place to comply with verification requirements;
6. did not knowingly provide false transaction information; and
7. did not knowingly alter the transaction history.

Primary wholesalers recommend that the FDA permit the phrase “DSCSA compliant” to satisfy the transaction statement requirements. Other, longer statements would create enormous data storage burdens that could significantly undermine the adoption and usefulness of electronic transactions.

Whatever new regimen the FDA imposes will be imperfect in many ways. Aside from the holes that Congress either inadvertently created or did not anticipate, the system’s biggest flaw, perhaps, is that it starts with the manufacturer and ends with the pharmacy. There are no security requirements around the chemicals the manufacturers receive as ingredients for their drugs. Nor does a lot number allow a pharmacy to identify which patient received “suspect” or “illegitimate” drugs.

“Ideally, we would want to find the patient who received a particular drug and tell him or her to stop taking the drug, but the law doesn’t drive to that point,” says Fletcher. “We don’t get a true picture of the lineage of the product, just the middle life. There are many examples of ingredients resulting in harm, and if we must recall all of a drug because we cannot pinpoint the recipient, we impact the health of those who are not at risk by denying them their needed medication.”

Author bio: 

Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

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REFERENCE

1. Food and Drug Administration. Title II of the Drug Quality and Security Act: Drug Supply Chain Security. Available at:  http://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/Drug-SupplyChainSecurityAct/ucm376829.htm. Accessed May 29, 2014.