With all the controversy around whether or not insurers should be forced by Washington to cover birth control pills, there’s another big drugs story that has gotten short shrift: the quintennial reauthorization of the Prescription Drug User Fee Act, the law that has come to govern the pharmaceutical regulatory process at the FDA. This time around, legislators and biotech concerns have been trying to use the process to make important reforms at the FDA that will help speed innovative medicines to market. But they have been undermined by a seemingly unlikely source: big pharma.

One of the best ways to save lives, one that helps charge rather than retard the economy, is medical innovation. However, as former FDA Commissioner Andrew von Eschenbach notes in yesterday’s Wall Street Journal, thanks to bureaucratic inertia at the FDA, clinical trials from 2003-2006 were 70 percent longer, requiring far more complexity and cost, than those conducted from 1999-2002. As he points out, the problems are especially bad in the most common diseases like heart disease and diabetes.

The old, constrained "accelerated approval" process

As a result of this inertia, medicine’s innovators in the biotechnology have mostly opted out of addressing these large, common disorders, leaving them in the hands of the lumbering R&D giants like GlaxoSmithKline and Pfizer. Instead, increasingly, the upstart biotechs are focusing on more specialized diseases, like rare cancers, where they can conduct inexpensive clinical trials, and gain approval after mid-stage phase II studies, using what’s known as the accelerated approval process.

The accelerated approval process, instituted in 1992 at the behest of AIDS activists, gives the FDA a mechanism to tentatively approve drugs after phase II if a drug shows promise in a serious disease using a surrogate endpoint. “For example,” explains the FDA on its web site, “instead of having to wait to learn if a drug actually can extend the survival of cancer patients, the FDA might now approve a drug based on evidence that the drug shrinks tumors because tumor shrinkage is considered reasonably likely to predict a real clinical benefit.  In this example, an approval based upon tumor shrinkage can occur far sooner than waiting to learn whether patients actually lived longer.”

A real-world example of the accelerated approval process was the approval of Avastin in breast cancer. Avastin was approved in 2008 based on evidence that the drug improved progression-free survival in combination with Taxol, compared to patients on Taxol alone. (Progression-free survival indicates that a patient continued to live without growth in the size of her tumors.) But the drug failed to show a benefit on the more rigorous overall survival endpoint, which measures how long patients lived, irrespective of tumor growth. Last year, the FDA revoked its approval of Avastin in breast cancer, based on the new information.


A slower FDA is a boon to big pharma

While this problem has harmed patients by making it harder for them to gain access to new treatments, it’s been great for the big pharmaceutical companies. As my colleague Matthew Herper recently showed, from 1997 to 2011, twelve multinational pharma companies spent $802 billion to gain approval for just 139 drugs: a staggering $5.8 billion per drug. While these companies have been remarkably unproductive on the R&D front, they do have one huge advantage: they generate billions of cash from their already-approved drugs, a luxury that smaller biotech companies don’t have.

As a result, the small biotechs are forced to partner with the big pharma companies to get their drugs to market. The biotechs are forced to give up the economic upside of success for their innovations, while big pharma skims the cream off of biotech pipelines for their own purposes.

Sen. Kay Hagan (D., N.C.) is attempting to do something to address this problem. Today, she is introducing a bill called the Transforming the Regulatory Environment to Accelerate Access to Treatments (TREAT) Act, which seeks, among other things, to incrementally the accelerated approval process.


A bold new pathway for “progressive and exceptional approvals”




Instead, big pharma gets to keep its “cut of the action”


“There were four major groups that played a role in the change,” one well-placed insider told me. On the pro-innovation side were the biotechnology industry, as represented by its trade group BIO, and reformist legislators on Capitol Hill, such as Sen. Hagan and Sen. Mike Enzi (R., Wyo.). In favor of window dressing were PhRMA and the FDA, which “wasn’t ready” for the change, according to my source.

In addition, other sources tell me, certain consumer activist groups raised concerns that the change would allow unsafe drugs to make it to market. This charge is most usually made out of context, insofar as it fails to take into account how overweening regulatory conservatism drives up the cost and the risk of drug development, preventing and delaying life-saving treatments from reaching patients.

Big pharma was all too happy to jump onto the “consumer safety” bandwagon. “Big pharma says ‘don’t dilute safety measures for new drugs,’” said University of Michigan professor Erik Gordon in a Bloomberg interview. “That sounds better than ‘we want to keep our cut of the action.'”


With Washington bureaucracy and left-wing consumer activists lined up against real reform, it would have been tough enough to get strong pro-innovation bills through Congress. It’s an election year, after all. But when big pharma joined the anti-innovation chorus, small biotech didn’t stand a chance.

Today, BIO chief Jim Greenwood praised the TREAT Act, claiming that it will “help break the institutional barriers to a faster idea-to-market pathway and speed new cures to patients most desperately in need.” But make no mistake: entrepreneurial medical innovators, and the seriously ill patients they serve, got rolled.

UPDATE 1: Eli Lilly, at its Campaign for Modern Medicines blog, says that my assertion that big pharma quashed broader reform "couldn't be further from the truth" (emphasis added):



Josh Bloom, of the American Council on Science and Health, is concerned about safety risks under a progressive approval process: "It's inevitable that we will see additional safety problems in phase III trials are circumvented." My argument, of course, is that we are too concerned with the safety problems of phase III, and not concerned enough about the benefits that come from stimulating medical innovation.

UPDATE 2: Charles Hooper, writing in Medical Progress Today, points out that a conditional approval process would be a win-win for patients, because conservative patients could still wait for the full data to come out, while bolder patients could voluntarily choose to jump in:

In economic terms, this is a Pareto improvement over our current situation. The more conservative patient, say Patient C, could wait for the full efficacy data. The bolder patient, say Patient B, could try new drugs sooner and actually help create efficacy data. Both parties would be better off, or at least equally well off, as they are today. Patient C, who would wait for the same amount of efficacy data as before, would be no worse off. Patient B, who would have more drugs to choose from and would have access to drugs sooner, would be better off.

Such a solution is a Pareto improvement, in that everyone is at least as satisfied as under the current system. Cautious patients would still get the assurance of reams of efficacy data, while patients who don't want to wait, wouldn't have to.

UPDATE 3: The Raleigh News & Observer discusses the TREAT Act. It's worth noting that the Research Triangle area of North Carolina is home to a number of biotech companies, along with a big research facility for GlaxoSmithKline.