FDA Amendments Act: More Regulation = More Comfort and More Products

Pharma companies are beginning to go to the financial community with an odd message: the companies are delighted to be getting more regulation from the Food & Drug Administration. The reason: the companies see a regulatory environment becoming ever more cautious and risk averse. The only solution is to make FDA more confidence about its decisions. The companies believe more regulatory authority for FDA on safety issues will make for a more confident and predictable regulatory agency.

It gets bleakest just before dawn, and it has been very bleak for pharma in the US this summer. But many drug sponsors are seeing the dawn ahead. The first glint of sunlight is coming from Congressional agreement on new regulatory powers for FDA.

By Cole Werble

Pharma companies are beginning to go to the financial community with an odd message: the companies are delighted to be getting more regulation from the Food & Drug Administration.

The reason: they see a regulatory environment becoming ever more cautious and risk averse. The only solution, drug manufacturers say, is to make FDA more confident about its decisions. The companies believe more regulatory authority for FDA on safety issues will make for a more confident and predictable regulatory agency.

The message could not have been clearer from Novartis AG at a day-long meeting with the financial community in East Hanover, New Jersey on September 12.

The company’s global head of pharma development, James Shannon, predicted that a better day is just around the corner based on the passage of the major agency reform act, the FDA Amendments Act (FDAAA).

"FDA has become very conservative on drug safety questions," Shannon said, conceding that Novartis "underestimated" the degree of that conservatism during its torturous dealings with the agency over the diabetes drug vildagliptin ( Galvus). He expressed hope, however, that with the new FDAAA drug safety tools the agency will "feel more comfortable" and be ready again to make more difficult approval decisions. ( See "A Grim Picture, No Matter How You Look at It," The RPM Report, February 2006 .)

It is only natural for pharma to try to reassure Wall Street that the new FDAAA provisions will not create an adverse commercial environment. Pharma, like any regulated industry, stops its dire public predictions about the impact of a new authority the closer the new legislation comes to becoming law. The complaints will start up again in 2008 as FDA begins to implement and interpret the new provisions.

But there is more to pharma’s rhetoric as FDAAA arrives on the scene. There is a true sense of relief: a sense that the new authority may be what is necessary to end the tough three years since Vioxx was pulled. There is also a sense that FDA may be headed to a new system for controlling drugs that fits the larger trend in medical research: the tailoring of products more precisely to smaller groups of patients. ( See "FDA’s Drug Safety Changes: Safe Legislation; Unsafe Climate," The RPM Report, January 2007 (Also see "FDA's Drug Safety Changes: Safe Legislation; Unsafe Climate" - Pink Sheet, 1 Jan, 2007.).)

Novartis: The Unwilling Drug Safety Poster Child

Novartis had little choice but to come out and address the impact of the legislative changes because of the timing of their meeting (while Congress was working on the final touches of FDAAA) and because the Swiss firm has faced several high-profile drug safety situations this year.

In each challenge that Novartis has experienced recently, the company has come face-to-face with FDA’s reluctance to find solutions to address products with safety issues. "Increasingly," Novartis’ Shannon said, "we hear from FDA, ‘Why should we take the risk when there are other therapeutic modalities available?’"

Novartis has suffered from FDA’s cautious approach three times this year: in the decisions to delay and issue an approvable letter to Galvus; in the request for a withdrawal of the irritable bowel syndrome drug tegaserod ( Zelnorm); and the dim prospects for the cox-2 inhibitor lumiracoxib ( Prexige), which has a late September NDA action date but no chance for approval at this point.

Shannon focused on one piece of the new legislation that could be the catalyst to unplug the pipeline: the REMS (risk evaluation and mitigation strategies). He noted that under the REMS authority the agency will be getting the power to set more restrictive distribution, education and tracking requirements for marketed products.

Novartis may not be relishing the thought of FDA gaining power to coerce sponsors to create patient registries and limit distribution to certain medical specialties, but the company isn’t scared either.

Shannon told analysts that the new controls are necessary because FDA has clearly given up on one of its older tried-and-true regulatory tools: professional labeling.

Labeling solutions to risk just don’t work for the agency anymore, Shannon said. "They really have a decreasing trust in the ability of practicing physicians to manage risk in the clinic; they believe that physicians do not read labels." The agency further does not "believe that physicians stick to approved indications."

Nothing New for Novartis

Novartis claims to be ready for tighter systems of product delivery. The company has had two major experiences with the new REMS-style controlled distribution systems. Although the Swiss firm doesn’t talk about the experience much anymore, Novartis was a pioneer in the area in 1989 with a tight distribution system for its antipsychotic medication clozapine ( Clozaril). Because of a serious white blood cell side effect, Novartis required blood monitoring on a continued basis as part of the prescribing and dispensing process for getting the drug. ( See "The Risk of Risk Management," The RPM Report, January 2007 (Also see "The Risk of Risk Management" - Pink Sheet, 1 Jan, 2007.).)

Currently, Novartis is working with Genentech Inc. on a tightly controlled distribution and product administration program for omalizumab ( Xolair) and both companies profess to like the system. The forced contact with physicians and tightly monitored network of administrations sites for the injectable product is opening up a number of new areas for working more closely with both the physician and patient as customers.

For the physician, Novartis has been working to get higher payments for the time spent administering the product and watching the patient for post-injection reactions.

For the patient, Novartis is offering treatment reminders, surveys and hotlines to create a closer tie and stimulate better compliance with prolonged drug use.

Novartis, in fact, highlighted several features of the restricted distribution system as attractive marketing support and customer relations tools in one slide during the September 12 meeting. (See Exhibit 1).

Xolair: Thriving on Risk Management

Without the marketing restrictions on Xolair, the product would probably be off the market now instead of heading toward over $500 million in worldwide sales for 2007. Novartis says that there are about 40,000 patients on the drug currently; Genentech says that 57,300 patients had used the drug between launch in June 2003 and December 2006.

Because the product was brought to the market in the middle of 2003 with a restricted distribution system, Novartis and Genentech were in good position to respond quickly to an increased concern about unpredictable anaphylaxis reactions at the beginning of this year.

In February, FDA issued an ominous safety alert on Xolair based on spontaneous reporting to the agency through FDA’s MedWatch program. The agency estimated a doubling of the frequency of anaphylaxis from Xolair administration from 0.1% in clinical trials to 0.2% from post-marketing experience.

FDA also noted that the side effect was more unpredictable than originally thought. Cases of anaphylaxis occurred at various times after injection (almost a third of cases occurred after more than two hours). It was difficult to associate the side effect with the number of times that the patient had been exposed to the product: 39% of the anaphylaxis occurred on first administration; 32% occurred after more than three doses. That kind of serious and unpredictable side effect could have really caused trouble for Xolair, an expensive, $1,000-or-more per month treatment.

Because the companies had a restricted distribution system already in place, they were able to convince FDA that with a little tweaking that system could be expanded to handle the higher reports of anaphylaxis.

Explaining REMS to Investors

As Genentech product development president Susan Desmond-Hellmann describes it, the revised distribution system is less a challenge to the product than an opportunity or upgrade that will make it easier to market the product in the future.

Desmond-Hellmann got a crack at explaining the new risk management plans to Wall Street several months ahead of the Novartis comments on September 12. At the end of the first quarter, after the initial FDA warning on Xolair, she was asked what the commercial impact of the discussions with FDA would be.

She told the financial community that FDA was going to require a risk management plan (a RiskMAP in the regulatory lingo used prior to the enactment of FDAAA) to keep the product on the market. And she made the new regulatory tool sound like a way to resolve a tricky situation with FDA.

Noting that many of the analysts might not be familiar with the RiskMAPs "because they are relatively new," Desmond-Hellmann cast the new regulatory tool in a favorable light as an addendum to labeling intended to "maximally protect patients from having the adverse events." She characterized the discussions with FDA as a dialogue and said the types of issues related to how to revise the instructions to physicians on choosing patients and observing them after administration.

Eventually, Genentech worked out a plan in early July for a revised RiskMAP for Xolair that has five features.

Box Warning: The anaphylaxis warning moves to the top of professional labeling, highlighted in FDA’s standard heavy black box. The gist of the warning reinforces the importance of administration of the product under the supervision of a doctor and a waiting period following administration.

Patient Medication Guide: Patients are to be given a brochure highlighting the potential anaphylaxis risk before each injection.

Patient observation after injection: The risk minimization plan stresses that physicians should keep patients in their offices for an adequate period of time after administration of the shot to watch for a reaction. That has been traditional practice with Xolair since its commercial introduction. A study done in 2005 for Novartis indicates that patients generally wait about 2 hours in the doctor’s office after receiving an injection. FDA does not specify a waiting time under the new RiskMAP. The two-hour observation period, however, would catch the onset of about 60% of cases of anaphylaxis according to the time of onset of the cases observed to date.

Follow-up surveys: Genentech will follow-up with doctors administering the drug (mostly allergists and pulmonologists) and with patients to find out how the educational materials are working to reduce cases of anaphylaxis.

Two post-marketing studies: One will look for a skin test for use with Xolair to try to address the unpredictable nature of the side effect. The second test is a version of closer product surveillance through creation of an observational repository of cases of hypersensitivity reactions associated with Xolair and appropriate control cases.

Turning REMS into a Competitive Advantage

How onerous are the new requirements? Not very, according to Novartis.

FDA is undeniably using the companies to serve as surrogates for the agency to make sure that physicians are paying attention to the increased warnings in labeling. That fits with Novartis’ view that FDA does not trust physicians to pay close attention to just labeling changes alone.

But the components or the RiskMAP translate quickly into good marketing/sales support techniques as well as ways to improve the safe use of the product.

The skin-test, for example, will provide the doctor with a quick way to identify the right patients to receive the product. The new tests as part of a "high impact" program "to ensure customer satisfaction by simplifying and accelerating patient screening and ultimately making sure that the right patients get Xolair," according to Novartis global marketing and sales head Emmanuel Puginier.

The post-administration monitoring period in the doctor’s office similarly adds to the product’s commercial appeal. The waiting period serves to increase the value of the treatment to the doctor, increases the doctor’s comfort in using the product and protects the patient.

Novartis has already done work on the amount of time and resources used by the administering offices to argue for an increase in administration fees from payers. The added precaution for the patient could lead to a higher payment for the doctor, making the product more attractive to the medical practice.

From the perspective of Novartis, the follow-up surveys help to solidify a strong relationship between the patient and physician and between both patient and physician and the company.

"To achieve prescription growth over time," Puginier said, "we must insure that the feedback loop between patients and doctors functions well so that patients can tell their doctors about their positive experience with Xolair." A main objective of Novartis’ support efforts for specialty products like Xolair is to improve patient "compliance with activities linking doctors and patients."

Other experienced FDA observers also see the new marketing and distribution controls as a benign, and potentially helpful, stimulus for pharma to increase its contact with customers.

Former Wyeth EVP Bruce Burlington sees the REMS agreement as a variant of the training programs used in the medical device field to train new users and assure safe introduction of new products.

Burlington who was a senior FDA official and head of the agency’s medical device center before joining Wyeth in 1999 told a recent Food & Drug Law Institute meeting that the most truly new devices approved by FDA devices "are ‘restricted’ devices, but the restriction usually means that there has to be a training program on how to use the device."

Burlington says the system as it has developed for devices "works well for the industry and it works well for the users." The use of distribution restrictions for devices has been handled very reasonably, Burlington says. "I think there is a general sense that FDA has figured out a way to use these authorities rationally and appropriately," he told FDLI. Burlington left Wyeth in September to become a private consultant.

Genentech, however, maintains that the REMS-style programs are very different from marketing support activities. Genentech says there is a clear line between sales and customer support and the RiskMAP. The company says that "the RiskMAP is in no way a promotional activity." Genentech says that its sales force will not be used to conduct any of the follow-up surveys agreed to in the risk management plan.

The implementation of the RiskMAP, Genentech says, "will require significant time and effort by the companies as well as physicians and is focused exclusively on education about the risk of anaphylaxis as described in the updated Xolair label."

That time and effort is likely to become one of the hallmarks of successful product management by pharma in the future. Whether elaborate risk management plans like the one for Xolair are described as sophisticated product support or plans to assure safety, they will be crucial to convince FDA to permit products to get to market, to ensure that products stay on the market, and to make them commercial and treatment successes.