Living in a Bipolar World: Implications of the EPO Safety Debate (Part 1)

CMS’ coverage policy on erythropoietin has huge commercial implications for Amgen and J&J. It is also a wake-up call for the rest of the industry: there are now two regulators who control the keys to success in the pharmaceutical industry.

Michael McCaughan

The Centers for Medicare & Medicaid Services is about to make a decision that could cost Amgen Inc. and Johnson & Johnson billions of dollars.

The official who will make the call, Steve Phurrough, the head of the Centers for Medicare & Medicaid Services Coverage & Analysis Group, doesn’t think the agency is breaking any new ground. He has a very succinct answer when asked if the agency’s proposal to slash coverage of erythropoietin anemia products in cancer patients sets any precedents. "No."

That—to put it mildly—is not how Amgen Inc. and Johnson & Johnson see it. "This could be precedent-setting, should CMS restrict coverage in the way they have proposed," Amgen VP-global coverage and reimbursement Josh Ofman says.

J&J feels the same way. The agency "would set a new precedent in its coverage of treatments by ignoring the proven benefits of anemia treatment in these patients while giving greater weight to theoretical risks," Ortho Biotech Products LP President Joaquin Duato said in written comments submitted to CMS. And if CMS goes even further to restrict coverage (as the agency says it might), it would be "an extreme, overreaching and unprecedented interpretation of the current body of evidence, one that is simply without merit or support."

Amgen and J&J will take a huge hit from lost revenues from their EPO agents—darbepoetin (Aranesp) and epoetin (Procrit)—so they have every reason to sound the alarm. CMS is proposing to eliminate several large off-label markets for EPO, and—more troubling for the manufacturers—put restrictions on use of the drugs even for approved indications that go beyond anything in the product labeling. (See "Taking on CMS: EPO as a Case Study in Reimbursement Policy," in this issue (Also see "Taking on CMS" - Pink Sheet, 1 Jul, 2007.).)

Other manufacturers may be contentto let Amgen and J&J worry about this fight. There are many reasons that the EPO market is unusual, not least because CMS is the dominate payor through Medicare Part B, which covers drugs administered by a physician.

And Phurrough’s answer is literally true. CMS’ May 14 proposed coverage policy for erythropoiesis stimulating agents for non-renal disease indications is not fundamentally a departure for the agency from its usual methods in making national coverage determinations. It is just that CMS has never before made a decision with such a dramatic, immediate impact on the fortunes of two of the biggest Big Pharma companies.

That is why the rest of the industry better pay attention. Manufacturers need to understand an important new reality for drug development and commercialization: they can no longer think of just one regulator—the Food & Drug Administration—as holding the keys to commercial success.

In this, the first of two-part story on the EPO coverage policy, The RPM Report takes a close look at the interaction—or lack thereof—between FDA and CMS in addressing emerging safety issues surrounding erythropoietin stimulating agents (ESAs, or EPO).

One message comes through loud and clear: CMS can and will assert its own judgment in determining the appropriate role for medicines. Seen in that light, the EPO coverage decision should be a wake-up call for the entire industry.

Another Public Health Agency Asserts Itself

There is no question that the CMS coverage decision came as a shock—not just the severity of the restrictions, but also the timing. CMS issued its proposal a full four months ahead of the deadline. And, more importantly, just two business days after an FDA advisory committee review of the safety issues surrounding EPO in oncology that already had investors reeling. (See "The Other Agency," The RPM Report, June 2007 (Also see "The Other Agency: CMS Shocks Wall Street-and Amgen Takes a Hit" - Pink Sheet, 1 Jun, 2007.).)

It quickly became an accepted belief on Wall Street that the one-two punch was not a coincidence. "These actions appear to be in part politically motivated, and carefully coordinated between CMS and FDA," Bernstein Research biotech analyst Geoffrey Porges wrote immediately after the CMS policy came out. (See "Conspiracy Theories.")

That line of thinking is not being discouraged by Amgen. SVP-North America Jim Daly raised the question during a review of the EPO coverage issues at a June 13 Goldman Sachs investor meeting. "What is the interaction between FDA and CMS? We’re not sure, but based on recent history we know there is some type of interaction there. We are watching that very closely."

Wall Street’s supposition that the two agencies are working hand-in-hand is both fundamentally correct and profoundly off-base. The core observation is right: there is an important interaction between FDA and CMS on drug safety issues, one that all manufacturers need to understand.

But the conspiracy theories have it backwards. Amgen and J&J are not facing a carefully coordinated and unified regulatory attack. Instead, they are facing something much more chaotic and potentially unsettling: FDA and CMS are indeed interacting, but remain fundamentally—and even stubbornly—independent.

Both agencies are aware of the implications of their decisions on the other’s mission, but neither is willing to defer to the other on critical issues that define the appropriate use of medicines. This is not a carefully coordinated public health policy, but the product of two agencies tackling the same safety issues through different lenses. There is a feedback loop in place, but it is haphazard at best.

Companies have no choice but to approach each agency separately, aware that there are no secrets between them, but also that there is no guarantee that a persuasive argument with FDA will carry any weight with CMS, or vice versa.

For manufacturers, a conspiracy might be more comforting. At this point, Amgen and J&J can only wish there was just one place to go to fix what they see as misguided restrictions on EPO.

Not a Coincidence, But Not a Conspiracy, Either

You don’t have to be paranoid to see that FDA and CMS are working in concert on EPO.

CMS announced a coverage review for the products on March 14, just five days after FDA and the manufacturers added a "black box" warning to the labeling for Epogen, Aranesp and Procrit, warning of tumor progression and decreased survival in cancer patients undergoing cancer treatment.

CMS’ decision to initiate a coverage review at that time was not surprising, Amgen’s Ofman says. "It is perfectly appropriate for the regulators like FDA and the payors like CMS to evaluate their policies as new safety issues emerge."

Ortho Biotech VP-clinical affairs, oncology Craig Tendler agrees: "They are both focused on trying to define the safe and appropriate use of ESAs."

In the case of EPO therapy, the regional carriers contracted by CMS were already initiating coverage reviews in light of the new safety data. In cases where local carriers are beginning to make independent decisions about coverage, it is not unusual for CMS to step in to ensure national uniformity.

But there is an important implication of CMS’ decision to initiate a national coverage review in March. It is further evidence that the addition of a "black box" warning to labeling has commercial implications that it may not have had in years’ past. CMS views a "black box" as a triggering event that can justify decisions to stop covering a therapy; the agency articulated that policy in the context of the Medicare Part D prescription drug benefit. (See "Medicare Formulary Rules Add Bite to ‘Black Box’ Warnings," The RPM Report, June 2006 (Also see "Medicare Formulary Rules Add Bite to "Black Box" Warnings" - Pink Sheet, 1 Jun, 2006.).)

Shocking Timing

The timing of CMS’ decision to review coverage of EPO may not be surprising, but the publication of the agency’s draft decision memo certainly was.

Once again, CMS followed close on the heels of FDA, publishing its decision just four days after a May 10 FDA advisory committee recommended even tougher restrictions on EPO labeling than the "black box" warning. In this case, there was no obvious trigger for the publication date: CMS rules give it six months to publish a draft decision memo, so the EPO policy came out four months early.

For Amgen and J&J, the two decisions amounted to a one-two punch. Analysts assumed CMS knew where FDA was going ahead of the advisory committee meeting and anticipated the outcome; understandably, they linked the new, tougher recommendations from FDA with the unexpectedly strict coverage restrictions posed by CMS. But how carefully coordinated were the two?

Here is how CMS’ Phurrough describes the interaction. "Our review was conducted independently of FDA.When we identified FDA data needed for our review, we contacted FDA staff for assistance in obtaining such documents." Phurrough is clearly aware of the sensitivities surrounding questions of contact between the two agencies. Asked who in particular CMS worked with at the drug agency, he responded: "I’m not naming names at FDA."

FDA tells the same story. "Although FDA did provide technical information on ESAs to our sister agency, the Centers for Medicare and Medicaid Services, we did not participate in its proposed coverage decision." FDA is continuing with its own review of EPO safety, the agency adds.

FDA Transparency Changes the Game

Focusing on what, if any, influence FDA had in CMS’ coverage decision misses a more important point: the impact of FDA’s efforts to increase transparency—especially in the context of emerging safety concerns—means that payors have access to much more data than they would have in the past to make judgments about coverage.

CMS’ coverage memo reviews the literature on EPO safety, and includes a discussion of 13 terminated studies that seem to weigh heavily in its decision to restrict access. Most of the studies were never published in the medical literature that would be captured in a traditional literature review. Instead, CMS found out about them in a different way: by accessing internet postings by FDA. (See Exhibit 1.)

One big source for CMS was the public briefing documents for an Oncology Drugs Advisory Committee (ODAC) safety review of EPO in 2004. Though it now seems routine for the public to have access to both the FDA and sponsor briefing materials ahead of committee meetings, that was not the case until Public Citizen successfully sued the agency to make the materials available in 1999.

The other source of unpublished data cited by CMS is an FDA safety alert issued in March in conjunction with the new "black box" warning put on EPO products. FDA’s decision to make data available via public health alerts is a more deliberate policy decision, though it is certainly not without controversy in industry. (See "The Agency That Cries Wolf," The RPM Report, March 2006 (Also see "The Agency that Cries Wolf" - Pink Sheet, 1 Mar, 2006.).)

CMS officials also attended the May 10 ODAC meeting, scribbling notes furiously like anyone else with an interest in the topic. "The meeting provided additional expert opinion which we always consider in any of our decisions," Phurrough says.

One important point that Wall Street seems to have missed: CMS’ coverage policy does not rely on information presented at the most recent ODAC review. Indeed, CMS’ review of the regulatory history of ESAs ends with the "black box" warning put in place in March. That makes sense, since the "black box" triggered the coverage review in the first place. CMS "didn’t just put together a document with 500 references in the three days after ODAC," Ortho’s Tendler observes.

In fact, the only reference the coverage policy makes to the most recent advisory committee is to suggest that CMS should go farther in restricting access.

"In light of the issues discussed in our review of the evidence and serious safety concerns voiced in the May 10, 2007 FDA Oncologic Drugs Advisory Committee meeting, we are also interested in public comment on whether coverage for ESA therapy for Medicare beneficiaries with cancer should occur only within appropriately designed clinical research studies where informed consent and safety monitoring can be assured," the draft policy says.

Let FDA be FDA

Still, the timing of decision sends a clear message to industry: CMS is asserting its own role as a public health agency, and does not see the need to wait for FDA to take final action on issues involving drug safety.

In that sense, it is another unmistakable sign of the perils to industry of operating in a climate where confidence in FDA’s ability to protect the public health is shaken. When FDA is being second-guessed by Congress, outside academics, and even its own employees, it is unrealistic to expect other government agencies to take a back seat to FDA on important issues. (See "Tone Deaf: FDA Commissioner Hits the Wrong Note," The RPM Report, June 2007 (Also see "Tone Deaf: FDA Commissioner Hits the Wrong Note " - Pink Sheet, 1 Jun, 2007.).)

In theory, CMS could have waited for FDA to finalize new labeling for EPO therapies before proposing a national coverage policy. Holding off would have given CMS time to gauge the impact of the new labeling on utilization patterns.

Phurrough says the agency saw no need to do that. "FDA and CMS are independent agencies with different missions," he notes. "We did not need FDA to finish before taking action."

Not everyone agrees. "CMS should acknowledge the role of the FDA in its judicious evaluation of the safety profile of ESAs," Amgen told CMS, "and avoid using coverage policy to play the role of the FDA by issuing prescribing instructions." Ortho’s Tendler says making coverage decisions before FDA finalizes labeling "is putting the cart before the horse."

Amgen and J&J are especially concerned about instances where CMS is restricting coverage for on-label uses.

Amgen frames its arguments carefully, emphasizing scientific and patient care issues. CMS’ draft policy "raises all sorts of interesting issues for physicians who are trying to prescribe the drugs," Amgen’s Ofman says. "CMS’ decision is going to affect patient access to the drugs. FDA’s decisions will be about what instructions they give to providers about how to use the drugs, and what instructions are in the label about how to promote the drugs. They are very different things."

J&J raises the issue more bluntly: "The standard for FDA approval of an oncology drug product includes a finding by the Secretary of HHS that the drug is safe and effective for its labeled use, based upon substantial evidence consisting of adequate and well-controlled clinical trials," the company told CMS. "This standard is clearly higher than, and includes the determination of, ‘medically appropriate’the Secretary makes in determining coverage of a drug product."

In other words, CMS has no choice but to cover cancer products for an FDA-approved use. That argument suggests a basis for a potential legal challenge to CMS’ coverage policy. J&J, and especially Amgen, tread lightly in that arena, but plenty of surrogates make the argument more strongly. (See "FDA’s Unlikely Defenders," in this issue (Also see "FDA's Unlikely Defenders" - Pink Sheet, 1 Jul, 2007.).)

A third manufacturer—Genentech Inc. —is among those who argue loudly that CMS is overstepping its bounds. Genentech is concerned that CMS’ coverage policy could have an impact on use of its oncology agent Avastin, since CMS proposes not to cover EPO as supportive care when used with the drug.

But it is clear that Genentech is also worried about the precedents that may be set by CMS. That is not surprising, since, like Amgen, Genentech is unusually reliant on Medicare Part B coverage for its products. And it is in the midst of a doozy of a coverage fight of its own over the acute macular degeneration therapy Macugen. (See "An Eye for an Eye," The RPM Report, June 2007 (Also see "An Eye for an Eye: Lucentis and the New Pharmaceutical Value System" - Pink Sheet, 1 Jun, 2007.).)

"CMS is circumventing the role of the FDA," Genentech says. "CMS should wait to make decisions regarding Medicare coverage for a product until the FDA has completed its safety review of the product in question. By CMS making decisions regarding the safety and efficacy of various products already approved by the FDA, it is prematurely limiting the ability for patients to access products already approved by the regulatory agency responsible for making such decisions, and is, in essence, dictating the treatment decisions of physicians."

Maybe a court will end up telling CMS it can’t finalize its coverage policy, but that won’t change the implications of the agency’s stance. CMS is asserting its own role as a judge of appropriate use of medications—or, looking at it another way, its lack of confidence that FDA labeling alone is a good enough guide.

In that respect, CMS isn’t behaving much differently than many outside academics who are using the data FDA makes available on drug reviews as a basis to challenge the conclusions of FDA’s own analyses of those data. (See "Shadow FDA," The RPM Report, December 2005 (Also see "Shadow FDA? Researchers Are Taking Approval Matters into their Own Hands" - Pink Sheet, 1 Dec, 2005.).)

Two Missions, Two Agencies

How does FDA feel about all this? For now, at least, FDA is not picking a fight with CMS on the issue. The agency agrees with CMS’ point that the two reviews are separate. While FDA considers the advisory committee recommendations and discusses further labeling changes with the sponsors, "it is important to note that coverage and reimbursement issues are not being factored in to our decision making," the agency said.

Of course, there is no real way to separate the two.

During the May 10 ODAC review, committee members, public stakeholders, and even FDA officials acknowledged CMS’ ongoing coverage review—and worried about the impact of their recommendations on access to the therapies.

"One of the things we need to keep in mind is that many times the labeling and restrictions can also translate into reimbursement, so it does become an operational issue with regards to the patient population being targeted," committee chair Gail Eckhardt (University of Colorado) said.

The issue also came up when a committee member asked about the role of EPO in treating anemia of myelodysplastic syndrome—as opposed to myeloid cancers.

Office of Oncology Director Richard Pazdur stressed his view that "these are really different situations." He urged the sponsors to work with patient groups to collect data to support supplemental indications in labeling, but he also acknowledged that he was concerned about reimbursement in the meantime.

"Unfortunately, I do not want them to get swept away with this. We will discuss with our colleagues in CMS to make sure that that does not occur," Pazdur said.

CMS’ coverage policy released four days later nevertheless excludes the use of EPO in MDS from reimbursement by Medicare. So much for coordination with FDA.

Pricing Policy: The Hidden Heart of the Matter?

The discussion of reimbursement during the advisory committee review illustrates that the feedback loop between CMS and FDA works in both directions. In Amgen’s view, that played an important role in the negative outcome of the ODAC review of EPO.

Several speakers during the open public hearing portion of the ODAC meeting highlighted concerns about the reimbursement system for Medicare Part B, which they feel provides an incentive for doctors to use as much EPO as possible. (Those concerns were highlighted the day before the committee review in a front-page New York Times story.)

The Medicare Modernization Act was supposed to take the profit out of drug selection by physicians by shifting payment from the old "average wholesale price" model (with a huge built in profit "spread" for physicians) to the average sales price, more closely in line with the actual cost for a doctor to purchase a drug. But while the "spread" has certainly been reduced, physicians still have an incentive to use as much of a Part B medicine as possible. (See "Mind Your Bs and Ds," The RPM Report, June 2006 (Also see "Mind Your Bs and Ds" - Pink Sheet, 1 Jun, 2006.).).

The payment rate for EPO is clearly outside the jurisdiction of ODAC, but it nevertheless contributed to the strong restrictions recommended by the committee.

Emory University’s Otis Brawley cited the issue before the advisory committee voted on questions posed by FDA. "I was struck by one of the comments earlier today that said, let the doctors decide who gets the drug. The problem is that doctors get about $1,200 for every dose that they give patients, so the doctors are not necessarily objective."

That statement really got under Amgen’s skin. SVP Daly referred to it pointedly during the Goldman Sachs discussion, suggesting that it was outside the boundaries of the "scientific debate" that should be the basis of an advisory committee review.

Amgen is eager to discuss the risk/benefit profile of EPO, Daly said, and the company welcomes debate over the value of the therapy. Amgen is also not afraid to have "an ethical debate" about the payment system for physicians, Daly said. "But you can’t have an intelligent discussion if you are conflating one issue with another, or you are disguising one agenda as the other," he says.

CMS’ proposed coverage policy doesn’t talk about pricing or reimbursement at all; there is nary a whisper of the fact that EPO is the largest pharmaceutical line item in Part B, or of the many analyses of exactly how the payment by CMS does or does not match up with actual market costs.

Why? Because CMS’ rules state that it does not take cost into account when making coverage determinations.

But the agency is acutely aware of how much it spends on EPO—and, more importantly, that Congress, especially the feisty new chairman of the House Ways & Means Health Subcommittee, Pete Stark (D-Calif.), enthusiastically supports ideas to reduce spending on the drugs.

Stark has a broad and ambitious healthcare agenda in 2007, but one theme he has sounded from the first is his interest in reducing the spending on EPO. (See "The Stark Truth About Health Care," The RPM Report, February 2007 (Also see "The Stark Truth About Health Care" - Pink Sheet, 1 Feb, 2007.).)

Amgen disputes the thesis that the payment incentives in Part B lead to inappropriate care. "We are still looking for the unicorn patient who receives an ESA and doesn’t have anemia," Daly said. "We are looking, but we haven’t found him yet."

"If you look at the bulk of the data, the drugs are being used appropriately," he maintained. "You can find outliers if you look anywhere. You can probably go to the US Congress and find outliers in terms of what motivates behaviors."

Chickens Coming Home to Roost

That suggests another reason you don’t need a conspiracy theory to explain the tough line taken by both FDA and CMS on EPO: both agencies are responding to the same outside pressures surrounding issues of drug safety and appropriate use of medications.

Regulators, of course, never say they are making decisions in response to anything other than the scientific and policy issues in front of them. But like the Supreme Court, neither FDA nor CMS operates in a vacuum. Both agencies do react to the broader political environment.

But agencies’ decisions can be viewed as tangible signs of the cost to industry of its current political position. The central issue is the overriding interest in drug safety at a time of intense legislative activity surrounding FDA. In that sense, the EPO case is not fundamentally different than the challenges facing industry in flaps over products like Avandia or Zelnorm or even Vioxx. (See "The Death of Arcoxia: Drug Regulation in a ‘Whistleblower’ Climate," The RPM Report, May 2007 (Also see "The Death of Arcoxia: Drug Regulation in a "Whistleblower" Climate" - Pink Sheet, 1 May, 2007.).)

But because the response to safety concerns with EPO has involved two agencies in two well-documented reviews, it is possible to tease out several independent strands where concerns about industry practices played a role in the regulatory actions. These include:

(1) Pricing practices

(2) Direct-to-consumer advertising

(3) Publication bias and access to failed trial data

(4) Post-marketing commitments

On each point, Amgen and J&J’s own actions contributed to the regulatory backlash. But the companies are also being held accountable for perceived shortcomings of the regulatory system as a whole, as well as for the actions of others not involved in the EPO market.

There may be no other market that combines those four factors in the same politically volatile mix as the EPO market—but there is no market where at least one of these factors can’t play a role in shaping an adverse policy decision for manufacturers.

The DTC Backlash

During the May 10 ODAC review of EPO safety, there was palpable anger about the perception that direct-to-consumer TV ads sponsored by Ortho Biotech for Procrit suggest that the drug improves quality of life in cancer patients.

Several committee members said that use of Procrit and Amgen’s Aranesp is driven by the belief that they reduce fatigue, even though the drugs are not labeled that way. While they are approved to prevent transfusions in chemotherapy patients, labeling does not refer to any improvement in quality of life among patients.

The ads were criticized repeatedly by stakeholders who addressed the committee during the open public hearing, and then by committee members shortly before the first votes.

"One of the most important issues here is that most doctors and most patients think that this drug has been approved because it improves fatigue. I don’t see that in the FDA indication; I see it on late-night television," Emory University’s Brawley said. "There is a lot of sleight of hand here with what the drug is used for, and I think that is a real problem."

Committee chair Eckhardt noted that "we have all been struggling today with the advertising that we see versus the body of data that was presented to actually support the indication." She asked FDA’s Pazdur to explain "that dichotomy."

Pazdur responded by making clear his own objections to the ads, and calling on FDA’s ad review group and others to explain why they were allowed to air. (See "Tired of DTC.")

After the votes, the committee returned to the issue, with several members urging FDA to order the sponsor to run corrective ads. And Congress has picked up on those calls, with a Congressional committee asking for information about why the ads were allowed to air. (See "Go Ahead and Advertise—If You Dare," in this issue (Also see "Go Ahead and Advertise--If You Dare" - Pink Sheet, 1 Jul, 2007.).)

CMS’ coverage memo makes no mention of the ads—but the memo also does not discuss any quality of life benefits from EPO therapy. Amgen and especially J&J urge the agency to weigh that evidence more carefully before finalizing the policy.

So count the restrictions on EPO as another tangible sign of the commercial impact from the backlash against DTC. Though not as clear cut as, for example, Congress’ decision to exclude coverage of erectile dysfunction therapies from Medicaid and Medicare Part D, it is another instance where an ad campaign helped provoke a regulatory clampdown. (See "A Cold Shower for Viagra: How Congress Can Chill a Market," The RPM Report, December 2005 (Also see "A Cold Shower For Viagra: How Congress Can Chill A Market" - Pink Sheet, 1 Dec, 2005.).)

Show Me the Data

"Publication bias"—the phenomenon by which failed clinical trials tend not to be reported in the medical literature—is a longstanding issue for policymakers concerned about what they view as inappropriate overuse of medicines.

Those concerns are in play in the EPO regulatory reviews—especially after they became the subject of media attention when Amgen disclosed a negative Danish trial of Aranesp in February, four months after it was terminated.

That was clearly weighing on CMS’ mind when conducting the coverage review. "We are concerned that a number of trials have been terminated, suspended, or otherwise not completed, possibly due to signals of harm, and that the existing fund of published evidence may reflect a bias toward ESA use," the agency says. The memo then cites media reports that the "Securities and Exchange Commission (Atlanta bureau) is reported to be investigating Amgen for failure to disclose to investors until 2/2007 that a Danish study of darbepoetin use in head-and-neck cancer was terminated in 10/2006 for safety reasons."

"We cannot be sure of the completeness of the evidentiary database because of the question of unpublished data," CMS said. "The early termination of studies by data safety monitoring boards, investigators, and/or pharmaceutical sponsors because of a safety concern does not permit complete appraisal of the magnitude of safety risk."

"Early termination may reduce the statistical power of a safety finding," CMS added. "Nonetheless, evidence of harm is apparent despite these limitations."

In other words, CMS is concluding that it should act on signals seen in individual trials, even if a review of all available data indicates no signal. The premise: if the record were more complete, there would be more negative data.

Amgen sees the concerns about an incomplete publication record as a critical component of CMS’ policy decision. In comments submitted to the agency, Amgen began by stressing its commitment to transparency and assuring the agency that it "can be confident that Amgen has been diligent in our pharmacovigilance, has supplied all available data to the FDA in a timely manner, and has proactively shared these data with health care professionals. The entire body of relevant data is included in the analyses contained herein."

But in the current climate, will CMS trust Amgen that it has in fact shared all the data?

Making Sponsors do Studies

Publication bias is one thing, but an even bigger question is at work in the EPO debate: how to force sponsors to do trials that regulators (or payors) want done.

The inability of FDA to mandate post-marketing studies—or to punish manufacturers who fail to follow through on post-marketing commitments—is a dominant theme behind the drug safety bills in Congress. (See "Rethinking Phase IV," The RPM Report, May 2007 (Also see "Rethinking Phase IV: Congress Wants to Get Tough on Post-Marketing Requirements, but FDA May Soften the Blow" - Pink Sheet, 1 May, 2007.).)

FDA’s Pazdur highlighted his concerns with the sponsors’ follow-through on post-marketing commitments, indicating frustration that FDA still lacks patient-level data on a number of trials that were supposed to answer questions raised during a 2004 ODAC review of EPO safety. (See "Obligation to Deliver.")

Amgen told the committee to be patient, saying that most of the data to address the concerns raised in 2004 will be available over the next 12 months.

That, however, did not sway the committee.

"The burning question is, does this thing actually kill people in the doses that we think are reasonable and appropriate," the Angeles Clinic’s Silvana Martino said. "I would actually put a stop to all of these trials that are using higher doses than the recommended doses, because I don’t think they are going to add to our knowledge. They are going to continue to confuse us and waste patient resources."

Stanford University’s Michael Link asked FDA’s Pazdur why the committee should even consider new trials since FDA hasn’t yet gotten all the data from the trials it recommended three years ago. "If we say that you should do the next set of trials, how do we know that you are going to get the data from those trials?"

Pazdur responded by highlighting the limits of FDA’s post-marketing authority. "This is one of the problems that we face in post-marketing commitments for the FDA. We can…work with the sponsor to try to get these done in a timely fashion," he said. But "I cannot make a contingency on continued authorization of the drug based on getting this data at the present time."

The committee nevertheless voted unanimously that Amgen and J&J should conduct further studies of the safety of EPO. But the spirit of the vote was captured by the University of Michigan’s Bruce Redman, who joined his colleagues in voting yes, but added: "They will never be done."

The lack of confidence in the ability or inclination of the sponsors to complete post-marketing trials helps explain the strict limits recommended by the committee. It is not so much that there are new data demonstrating the risk of EPO therapies that proved pivotal in the vote; it is the lack of data demonstrating safety—a lack that seemed more pronounced given the discussion of post-marketing research three years earlier.

One way to encourage sponsors to complete post-marketing trials: take the toughest possible approach in labeling until the Phase IV data are in and demonstrate compelling reasons to lift restrictions.

Of course, product labeling does not by itself stop physicians from using the drugs however they see fit. That is where CMS’ coverage policy comes into play.

CMS’ proposed decision can be viewed as an effort by the Medicare agency to step into the post-marketing study debate by giving the sponsors an undeniably compelling reason to do more studies. CMS’ proposal raises the possibility of doing that more formally, by declining to pay for EPO therapies at all except in the context of clinical trials—and approach known as coverage with evidence development.

But even as it stands, the draft policy could amount to the same thing: if CMS holds the line and restricts coverage to ESAs beyond the labeling proposed by FDA, it will in effect be forcing Amgen and J&J to develop more data to support those uses (or else accept a dramatically smaller market).

And there is no question that CMS has the leverage to make restrictions hurt. Amgen’s SVP Daly put it succinctly during the Goldman Sachs presentation. "We are not seeing physicians being overly concerned about tumor progression," he said. "The FDA comments at the ODAC were incongruent with their experience and their reading of the literature. We are hearing that physicians were very disappointed at the quality of the scientific debate at ODAC."

"What we are seeing is behavioral changes in response to changes in reimbursement," Daly acknowledged. The rest of the industry should take note.

Editor’s Note: In part 2, The RPM Report will look at what the EPO says about the broader push by payors to encourage evidence-based medicine.