[SSRI-Research] Drug Firms Use Financial Clout to Push PhRMA agenda at FDA_WSJ

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[sSRI-Research] Drug Firms Use Financial Clout to Push PhRMA

agenda at FDA_WSJ

 

 

 

 

 

ALLIANCE FOR HUMAN RESEARCH PROTECTION (AHRP)

Promoting Openness, Full Disclosure, and Accountability

http://www.ahrp. org

 

FYI

 

To gain understanding as to why lethal drugs pass FDA review, read the

front

page article in The Wall Street Journal (below) describing the

transformation of the FDA from watchdog to lapdog. It all started with the

passage of the Prescription Drug User Fee Act passed in 1992. " For most of

its history, the FDA was funded entirely by Congress. But in the early

1990s, companies unhappy with the pace of drug approvals agreed to pay the

FDA millions of dollars in annual fees to help speed its performance.

Because the industry and the agency renegotiate every five years over the

size of fees -- and what they can be used for -- drug makers can have

considerable input into which programs receive funding. "

 

Anna Wilde Mathews reports: " In fiscal 1993, the industry's $8.9

million in

user-fee money accounted for just 7% of the FDA's drug review budget. The

deal has since been renewed twice, with fees increased both times. The

$232

million in fiscal 2004 represented 53% of the total drug-review budget. "

 

FDA officials have been huddling at the bargaining table with the

pharmaceutical and biotech trade organizations- -PhRMA and

BIO-- " bargaining

with the pharmaceutical industry for an increase in fees, giving the

industry a greater role in shaping the priorities of its regulator. "

 

Unlike any of the other federal oversight agencies, FDA officials

negotiate

higher fees by granting industry increased perks--i.e., weakened

regulatory

oversight.

Indeed, reports " Regulators usually don't negotiate their budgets with the

industries they oversee. Other agencies such as the Federal Communications

Commission and the Securities and Exchange Commission rely on user

fees for

at least some funding, but don't generally haggle over the fees. Instead,

they typically impose changes through formal rule-making or by

implementing

formulas set by Congress. "

 

Such negotiations have always resulted in concession to industry: " Each

time the arrangement has been renewed, the FDA has gained new funding. In

return, industry has wrung concessions. In the 1997 deal, the review time

for a standard application dropped from 12 months to 10 months. In

2002, the

FDA agreed to a number of changes, including a new deadline for how

fast the

agency would respond to companies' requests for meetings about their drug

applications. "

 

In 1997, the negotiations also resulted in industry gaining six month

patent

exclusivity extension for testing drugs in children. This was a double

betrayal--a financial bonanza that can add up to an extra $1 billion

dollars, and the aggressive enrollment of childen to painful drug testing

procedures. Children, including healthy chilren, have no legal

authority to

say, NO. The less fortunate are coralled into drug tests serving as human

guinea pigs for the enrichment of pharmaceutical companies and their

partners in medicine.

 

Contact: Vera Hassner Sharav

212-595-8974

veracare (AT) ahrp (DOT) org

 

http://online. wsj.com/article_ print/SB11570782 4013151485. html

 

THE WALL STREET JOURNAL

September 1, 2006

PAGE ONE

Drug Firms Use Financial Clout

To Push Industry Agenda at FDA

By ANNA WILDE MATHEWS

September 1, 2006; Page A1

 

The Food and Drug Administration is bargaining with the pharmaceutical

industry for an increase in fees, giving the industry a greater role in

shaping the priorities of its regulator.

 

Such negotiations between the industry and the FDA date to the

introduction of " user fees " in the early 1990s. But steadily rising

payments

by drug makers -- $232 million in fiscal 2004 -- now fund more than half

the agency's critical drug-review process, enhancing the importance of the

talks.

 

Exact details of the deal they strike likely will take shape in the

next few

weeks, and will be subject to

congressional approval. But people with knowledge of the matter say the

agency is likely to win some

concessions, including new funding for drug safety, partly because of

pressure on drug companies from

Congress. The companies have balked at other FDA suggestions that would,

among other things, route

user-fee money toward fighting drug counterfeiting. And companies are

divided over FDA's bid for

substantially more staff to review drug advertising.

 

Regulators usually don't negotiate their budgets with the

industries they oversee. Other agencies such as the Federal

Communications Commission and the Securities and Exchange

Commission rely on user fees for at least some funding, but don't

generally haggle over the fees. Instead, they typically impose

changes through formal rule-making or by implementing formulas

set by Congress.

 

For most of its history, the FDA was funded entirely by Congress.

But in the early 1990s, companies unhappy with the pace of drug

approvals agreed to pay the FDA millions of dollars in annual

fees to help speed its performance. Because the industry and the

agency renegotiate every five years over the size of fees -- and

what they can be used for -- drug makers can have considerable

input into which programs receive funding.

 

Each time the arrangement has been renewed, the FDA has gained new

funding.

In return, industry has wrung concessions. In

the 1997 deal, the review time for a standard application dropped from 12

months to 10 months. In 2002, the FDA agreed to a number of changes,

including a new

deadline for how fast the agency would respond to companies' requests for

meetings about their drug applications.

 

In the latest talks with the FDA, industry representatives -- several of

them former FDA officials --

have been sitting across the table from current government officials

at the

agency's offices in suburban

Washington in closed-door meetings that have been going on for months.

(FDA

rules don't let the

industry pay for refreshments, though insiders said agency officials

did eat

chocolate truffles brought by

one industry official after assurances they were home-made.)

 

Some former FDA officials, including David Kessler, who launched the

user-fee initiative when he was

FDA commissioner -- and the payments were much smaller -- say the

negotiations raise troubling

questions.

" There is no doubt that user fees give the industry leverage on

setting the

agency's priorities, because of

the negotiating process, " says Dr. Kessler, now dean of the medical school

at the University of

California, San Francisco. " There are significant risks, especially when a

growing percentage of the

budget comes from user fees, " he says, adding he doesn't think the FDA has

been compromised so far.

 

FDA officials defend the current system. " During the negotiations, FDA and

industry discuss various

enhancements and their value to industry, and we would never agree to

anything that compromises our

integrity or standards, " says Janet Woodcock, deputy FDA commissioner.

" But

aspects of the review

program that are of less interest to industry are not likely to be funded

out of user fees, " she adds.

 

The FDA and the trade associations involved in the talks -- the

Pharmaceutical Research and

Manufacturers of America and the Biotechnology Industry Organization --

declined to comment on

details of the talks. Officials for all three say the user-fee program

provides the FDA valuable resources

without lowering the regulatory bar.

 

They point out that the agency also gets input from consumer groups

and the

public and that the user

fees require legislation to take effect. Lawmakers typically haven't made

major changes to the complex

arrangements.

 

The practice of negotiating stems from the original pact the agency

cut with

drug companies: If the

companies agreed to user fees, the FDA would aim to review drugs in 12

months or less. Congress

ratified it in the 1992 Prescription Drug User Fee Act, or PDUFA.

 

Companies pay fees when they file drug applications. They also pay fees

based on how many drugmanufacturing

facilities they have and the number of medicines they sell in the U.S.

 

In fiscal 1993, the industry's $8.9 million in user-fee money

accounted for

just 7% of the FDA's drugreview

budget. The deal has since been renewed twice, with fees increased both

times. The $232 million

in fiscal 2004 represented 53% of the total drug-review budget.

 

For the next five-year agreement, which would begin Oct. 1, 2007, the

agency

initially laid out a list of

proposals that would have cost the industry more than $100 million a

year in

new fees, along with a

steeper year-by-year rate of increase. The proposals, ranging from costs

related to the FDA's move to

new offices to upgraded technology, were laid out a la carte-style, not a

take-it-or-leave- it package,

people close to the talks say.

 

If the agency were to get all it seeks -- which is unlikely -- fees could

cover 66% or more of the drugreview

budget if congressional appropriations remain flat -- which is likely, in

the current budget

squeeze -- according to one industry estimate.

 

FDA officials have said that federal appropriations for its budget haven't

kept pace with new mandates

and rising personnel costs. At the same time, the FDA faces pressure from

Congress and consumer

groups to bolster safety monitoring and regulation of advertising. " The

agency is overextended, " says

the FDA's Dr. Woodcock. " If we are going to provide additional

services, we

have to pay for them

somehow. "

 

Industry officials generally focus on routing money toward programs

directly

related to reviews of their

drugs, and they say supporting the broad functions of the agency would

make

the fees, which are

supposed to be tied to a service, more like a special tax. " That was never

the intention, for PDUFA fees

to completely subsume federal appropriations, " says Jim Greenwood, a

former

congressman who heads

BIO, the biotech industry group. BIO plans to push Congress and the Bush

administration to give the

agency more money.

 

The FDA says it needs more money for its drug-review process, to meet

growing costs and to fund

services sought by companies. The current fee deal hasn't, for instance,

kept pace with the rapidlygrowing

number of meetings in which agency officials give the industry feedback

about study plans and

results, the agency has said. Drug-company negotiators have questioned the

agency's cost estimates and

projections, and argue the agency could work more efficiently. The FDA has

countered that the agency

is increasingly efficient.

 

The companies' most significant goal was to get the FDA to give them a set

amount of time -- one early

proposal was 30 days -- to review and discuss the agency's proposals

on new

drug labels and other

conditions on approval, such as further studies, according to people with

knowledge of the talks. Drug

executives complain they sometimes get the agency's input only a few days

before a medicine is due to

be approved, which gives them little time to negotiate changes without

delaying approval.

 

The FDA has resisted offering such a guarantee, according to people with

knowledge of the matter. A

possible compromise would have the agency give drug makers projected

review

timelines about two and

a half months after they file their applications, including an

indication of

when label negotiations would

begin, among other benchmarks. These would not be firm guarantees,

however.

 

Also at issue in the talks is FDA oversight of advertising and promotion.

Members of PhRMA, the trade

group, are voluntarily submitting commercials to the FDA, but want the

agency to examine the ads

quickly so the companies can craft campaigns and buy airtime efficiently.

One early industry proposal

was for a 30-day deadline, but discussions later moved toward longer time

frames, according to the

people with knowledge of the matter.

 

The FDA at one point suggested that to deal with the expected increase

in ad

submissions, it wanted

about 50 new staffers, then later scaled the request down to around

30. But

the result is far from clear.

There are divisions among the drug companies: many BIO members don't run

direct-to-consumer ads

and object to their fee money going toward reviews of such promotions. So

far, the agency has been

reluctant to consider an industry proposal for a dedicated fee that

companies would pay only when they

submit ads, but a compromise remains possible.

 

Another central issue in the talks is the FDA's quest for more money to

monitor drugs' safety after their

approval. The industry is likely to agree to pay for improvements, people

close to the talks say. This

could include a new study of ways to improve post-market safety work. But

some industry officials

have opposed aspects of the FDA proposal. These include a suggestion to

spend user-fee money to

inspect the companies' own systems for collecting reports of drug side

effects. The officials argue that

the initiative should be supported by taxpayers.

 

Write to Anna Wilde Mathews at anna.mathews@ wsj.com1

 

Hyperlinks in this Article:

(1) anna.mathews@ wsj.com

 

Copyright 2006 Dow Jones & Company, Inc.

 

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