“The Pink Sheet” – Most Notable Stories Of 2012

Developments in off-label enforcement and scrutiny of economic superiority claims, new approaches to R&D, and biosimilars are among issues that captured readers’ attention last year.

The year 2012 turned out not to be a garden-variety one for biopharma enforcement, as one key ruling may redraw the boundaries for FDA actions on off-label enforcement and some government prosecutors are looking to move beyond safety and efficacy claims to newer fields of economic claims.

Developments in enforcement policy were among the issues drawing the most interest by readers of “The Pink Sheet” this past year.

Late in the year, stakeholders in many quarters were taken by surprise by a federal appeals court ruling in United States v. Caronia that the government cannot prosecute drug makers or their representatives under the Food, Drug and Cosmetic Act for speech promoting the lawful, off-label use of an approved drug. Top FDA officials see potentially nightmarish consequences of the ruling.

Many observers had already noted a decreasing emphasis on off-label enforcement after the high-profile actions of the last several years. One U.S. attorney, for example, said investigators might increasingly look at whether possibly false or unproven claims of economic superiority fraudulently induce purchase of a product. Interest is also growing in how manufacturers interact with pharmacy and therapeutics committees to affect formulary placement. This area of enforcement could stay in the spotlight as new health care delivery models look to tightly manage drug spending and as pharma faces changing pressures with more brand drugs encountering generic competition.

Readers also are closely watching how industry colleagues revamp their approaches to R&D, FDA’s implementation policies for review of biosimilar products, and challenges and opportunities in the FDA Safety and Innovation Act, signed into law in July.

Below are the 15 most notable stories published in “The Pink Sheet” during 2012, chosen by editors from among the most-read stories as measured by online reader views.

Enforcement Goes Into New Directions

• Off-Label Enforcement, Not Promotion, May See First Changes After Free Speech Ruling (Also see "Off-Label Enforcement, Not Promotion, May See First Changes After Free Speech Ruling" - Pink Sheet, 10 Dec, 2012.)

In a watershed decision, a federal appeals court declares in U.S. v. Caronia that manufacturers cannot be prosecuted under the FD&C Act’s misbranding provisions solely for speech promoting off-label use of a drug. Industry attorneys predict the decision, if it stands, will change the government’s approach to pursuing such cases.

Center for Drug Evaluation and Research Deputy Director For Clinical Science Robert Temple has expressed deep reservations about “what the consequences would be if people could promote uses that they hadn’t established, hadn’t bothered to get through the system” (Also see "Off-label Ruling’s Potential Fallout Is “Terrifying,” FDA’s Temple Says" - Pink Sheet, 17 Dec, 2012.). Some pharma stakeholders have suggested that FDA’s regulatory mission and pharma’s interest in informing health care providers could both be protected by focusing regulation on objective factors of whether the communication is truthful and non-misleading (Also see "Off-Label Ruling Opens Window For Shift In FDA Regulation, PhRMA Says" - Pink Sheet, 24 Dec, 2012.).

• Economic Superiority Claims, Manufacturer/Payer Relationships Ripe For Enforcement Scrutiny (Also see "Economic Superiority Claims, Manufacturer/Payer Relationships Ripe For Enforcement Scrutiny" - Pink Sheet, 6 Feb, 2012.)

The era of big pharma off-label promotion cases may be coming to a close, but federal prosecutors are eyeing other industry practices for enforcement, including unsupported promotional claims of economic superiority and superior efficacy, and manipulation of the average sales price system.

And on the regulatory side, manufacturers have asked FDA to clarify how it interprets a provision in the 1997 Medicare Modernization Act, which is intended to permit drug companies to proactively provide economic information to formulary committees with certain restrictions (Also see "Requiring Clinical Trial Support For Every Sec. 114 Economic Claim “Unwarranted,” PhRMA Tells FDA" - Pink Sheet, 15 Oct, 2012.). To date, there has been little agency enforcement activity in this area, but it is unclear how much of this type of activity is occurring (Also see "Health Economic Promotions To Formulary Managers: Seldom Used Or Under The Radar?" - Pink Sheet, 15 Oct, 2012.).

• Merck’s Post-marketing Study Delays Prompt FDA To Unsheathe New Enforcement Power (Also see "Merck’s Postmarketing Study Delays Prompt FDA To Unsheathe New Enforcement Power" - Pink Sheet, 5 Mar, 2012.)

Januvia and Janumet are misbranded, FDA tells Merck & Co. Inc. in a warning letter noting that rodent safety studies for the sitagliptin diabetes drugs were 20 months behind schedule. The letter marks the first time FDA has used its powers under the 2007 FDA Amendments Act to take enforcement action against a pharma company for such a delay.

Pipelines And R&D Innovation

• MedImmune Pipeline Primed To Produce (Also see "MedImmune Pipeline Primed To Produce" - Pink Sheet, 16 Jul, 2012.)

MedImmune LLC, the biologics unit acquired in 2007 by performance-challenged AstraZeneca PLC, is poised to lead its parent company into more prosperous times, with positive signals coming from Phase II trials in oncology and asthma and a stake in cancer immunotherapies. Medimmune is teaming up with two non-profit groups to test combinations of three monoclonal antibodies (Also see "MedImmune Turns To Venture Philanthropy For Cancer ImmunoRx Combination Trials" - Pink Sheet, 10 Oct, 2012.).

With the August appointment of former Roche/Genentech Inc. exec Pascal Soriot as CEO, AstraZeneca is helmed by a chief executive with expertise in overseeing the merger of biotechs and multinational firms (Also see "AZ Taps Outsider Soriot As CEO, While Roche Anoints 25-Year Veteran O'Day To Head Pharma Division" - Pink Sheet, 28 Aug, 2012.).

• Pfizer Revamps Neuroscience R&D – New Site, New Mandate, New Leadership (Also see "Pfizer Revamps Neuroscience R&D – New Site, New Mandate, New Leadership" - Pink Sheet, 30 Jul, 2012.)

Pfizer Inc. has thoroughly revamped its approach to neuroscience R&D, emphasizing disease biology and neural circuitry, moving its research team from Groton, Conn. to Cambridge, Mass., and hiring eminent neuroscientist Michael Ehlers to lead the group. The company will focus on legacy indications such as pain and schizophrenia, new indications such as neurodegenerative disease or autism, and orphan opportunities such as familial amyloid polyneuropathy, rather than therapeutic areas such as depression or anxiety where new mechanisms have thus far failed to improve on existing therapies and address unmet medical need.

• GSK Is Getting Ready For A Return To The ’90s (Also see "GSK Is Getting Ready For A Return To The ’90s" - Pink Sheet, 10 Dec, 2012.)

Though it has left behind the “industrialized” R&D approaches from the 1990s, GlaxoSmithKline PLC thinks its R&D revolution has produced strong growth that will get it back into major markets and maintain an output of three to five significant drug approvals per year. With that progress in sight, the firm is ready to transform its manufacturing and commercial model like it did in R&D, creating small-scale commercial teams akin to its Discovery Performance Units.

Biosimilars – Approaching A Turning Point?

• FDA’s Biosimilar Guidances Win Praise For High Hurdles, Flexibility (Also see "Biosimilars: Exclusivity Guidance Possible; Head-To-Head Comparison Studies Sinking In" - Pink Sheet, 28 May, 2012.)

Merck BioVentures and Hospira executives say FDA’s three draft guidances on biosimilar product development are consistent with their approach to biosimilars development.

• Teva’s G-CSF Product Clears FDA, Leaving Appeal Of Biosimilar Pathway Uncertain (Also see "Teva’s G-CSF Product Clears FDA, Leaving Appeal Of Biosimilar Pathway Uncertain" - Pink Sheet, 3 Sep, 2012.)

Teva Pharmaceutical Industries Ltd. is the first company to win FDA approval of a version of Amgen Inc.’s Neupogen (filgrastim) in the U.S. But since the product was filed as a full biologics license application rather than as a biosimilar, the terrain of the new 351(k) approval pathway remains untested.

FDA has tried to balance a message that the 351(k) biosimilar approval pathway offers an abbreviated process with the guidance requirements for clinical studies as part of applications. The agency has not yet received a 351(k) submission (Also see "Biosimilar Meeting Requests Increase, But FDA Cancels Some For Lack Of Data" - Pink Sheet, 11 Dec, 2012.).

Market Segments Poised For Change

• Xalkori And Zelboraf: The Highs And Lows Of Commercializing Targeted Cancer Drugs (Also see "Xalkori And Zelboraf: The Highs And Lows Of Commercializing Targeted Cancer Drugs" - Pink Sheet, 10 Sep, 2012.)

When Pfizer’s lung cancer drug Xalkori and Roche’s melanoma drug Zelboraf launched in 2011, they were heralded as the first in a wave of next-generation personalized cancer drugs, approved with companion diagnostics to identify the patients most likely to respond to treatment. But a slow launch trajectory compared to other recent cancer drugs points to pitfalls for marketing a drug to just a subset of patients.

• Hemophilia Market Snapshot: Long-Acting Products Poised To Transform Market (Also see "Hemophilia Market Snapshot: Long-Acting Products Poised To Transform Market" - Pink Sheet, 26 Nov, 2012.)

The staid hemophilia market may soon see the introduction of long-acting factor products, reshuffling segment shares, moving patients to prophylactic use, and expanding an already substantial global market. Biogen Inc. will likely be first to market, followed by established players. But will the improvements be enough to sway providers and payers?

• In A Changing Diabetes Drug Market, Who Will Come Out On Top? (Also see "In A Changing Diabetes Drug Market, Who Will Come Out On Top?" - Pink Sheet, 16 Jul, 2012.)

New treatments for type 2 diabetes are driving the optimism underlying Bristol-Myers Squibb Co. and AstraZeneca’s proposed acquisition for Amylin Pharmaceuticals Inc. and leading to a re-alignment of allies and competitors focused on the disease. Companies are enthusiastic about the vast opportunity, yet worried about the costs and risks of full-scale commitment to it.

• Multiple Sclerosis Drug Category Heats Up; So Does Spending (Also see "Multiple Sclerosis Drug Category Heats Up; So Does Spending" - Pink Sheet, 20 Feb, 2012.)

MS drug spending is skyrocketing due to premium-priced new drugs and defensive price hikes across the category, making the therapeutic area a management priority for payers. Insurers are largely relying on aggressive contracting with manufacturers to manage the category, but new launches are unlikely to secure preferred formulary placement without comparative safety and efficacy data.

Policy Developments At FDA and CMS

• Buying Time: Industry Sacrifices Early To Gain Later With PDUFA V Review Model (Also see "Buying Time: Industry Sacrifices Early To Gain Later With PDUFA V Review Model" - Pink Sheet, 1 Oct, 2012.)

NMEs and novel biologics will see reviews allotted two additional months under the revised model launching Oct. 1 under user fee renewal provisions of the FDA Safety and Innovation Act. Industry expects to gain more communication and first-cycle approvals, while FDA hopes it can receive more complete applications at submission and improve transparency.

• FDA Expanding Accelerated Approval Through Guidance, Collaboration (Also see "FDA Expanding Accelerated Approval Through Guidance, Collaboration" - Pink Sheet, 12 Mar, 2012.)

Even as Congress was debating provisions to expand use of accelerated approval mechanisms as part of user fee renewal, FDA said it would develop guidance for sponsors on when accelerated approval is appropriate and would review standards of evidence needed. The agency acknowledged that the pathway is “underutilized in many areas.”

FDASIA was signed into law with accelerated approval provisions as well as a new “breakthrough therapy” designation. Given the variety of expedited mechanisms now available, including priority review and fast-track designation, FDA is developing a comprehensive reference guide to help industry keep it all straight (Also see "FDA To Provide Expedited Approval Desktop Reference" - Pink Sheet, 29 Oct, 2012.).

• Looking Ahead To 2012: ACOs Get In Gear, Accelerating The Need to Prove Biopharma Products' Overall Value In Health Care (Also see "Looking Ahead To 2012: ACOs Get In Gear, Accelerating The Need to Prove Biopharma Products' Overall Value In Health Care" - Pink Sheet, 2 Jan, 2012.)

For any biopharma manufacturers standing on the sidelines as Medicare accountable care organizations take shape, the time has arrived to get involved. The first group of ACOs began operations at the start of 2012, and from day one their focus was on improving patient outcomes while also reducing the growth of health care costs. Manufacturers that connect with ACOs and convince them that their products contribute to both of those goals stand to gain share in what could be a very influential program.