When can patients sue drugmakers for failure to issue safety warnings? The Supreme Court hears arguments this morning in a case that could affect state consumer protection laws and the FDA’s drug labeling process. The financial stakes are high for drug companies.
— FDA will run out of carryover drug user fees in a month under a partial government shutdown. Commissioner Scott Gottlieb notes the agency can’t accept new user fees during a shutdown.
— Manufacturers often use high R&D costs to justify their prices. But authors of a new study suggest that companies reap such huge profits from cancer drugs that distorted incentives could lead them to focus on tumors at the expense of other diseases.
Happy Monday and welcome back to Prescription PULSE, where we’re taking bets on the number of days until FDA is funded again. Send news, tips and your best guess to Sarah Karlin-Smith (via email or Twitter) and Sarah Owermohle (email or Twitter).
SUPREME COURT REVISITS LANDMARK DRUG LABELING CASE — Justices this morning hear arguments in a case that could have wide-ranging implications for the pharmaceutical industry and consumers harmed by medicines. At issue is under what circumstances are drugmakers protected from consumer lawsuits alleging harm because the FDA has final say over what goes on a warning label.
Why it matters. A lot of money is potentially at stake. The outcome could dramatically impact patients’ ability to seek damages and drugmakers’ liability.
The case, Merck v. Albrecht, centers around the 3rd Circuit Court of Appeals’ interpretation of the high court’s 2009 ruling in another case, Wyeth v. Levine. The Supreme Court then held that FDA’s approval of a drug label does not insulate manufacturers against failure-to-warn lawsuits under state laws because the companies have a responsibility to constantly monitor their products and notify the agency when new safety concerns emerge. To be protected from suits, the justices wrote, drugmakers must produce “clear evidence” that FDA would have prohibited the warning.
Merck will argue today that the ruling pre-empted lawsuits, saying that it tried to strengthen warnings of the risk of fractures on the label of its osteoporosis drug Fosamax a decade ago only to be rebuffed by the FDA. The 3rd Circuit disagreed, ruling in 2017 that a jury could decide why FDA objected to the labeling change — if the decision was based on Merck’s proposed wording, a slightly different version might have been approved.
What other parties are saying: The Trump administration has thrown its weight behind Merck. The acting solicitor general submitted an amicus brief and will participate in oral arguments. On the other side, attorneys general for 22 states and the District of Columbia say Merck’s position would upset the balance between state and federal consumer protection regulations.
Patient watchdog Suzanne Robotti, founder of the nonprofit MedShadow Foundation, filed an amicus brief along with three former senior officials at FDA. Robotti argued in a Stat commentary that Merck’s attempt to update its Fosamax label was “disingenuous” because it wanted to describe the fractures as stress fractures — more minor than what patients were experiencing. She worries that a win for Merck would lead companies to knowingly design label changes that FDA would not accept — and then claim they are protected from lawsuits.
Merck says it told FDA “everything” it knew about the link between its drug and the fractures, which it says are an example of stress fractures, and that it proposed to warn of this risk.
PhRMA and BIO: The two industry lobbying groups, dismiss the watchdog’s argument, writing that “there is no basis for thinking that FDA’s decision was driven by dissatisfaction with the specific language of Merck’s proposal.” The trade groups assert that if FDA believed a safety issue needed to be on the label, regulators were legally obligated to propose alternative language to address it. They say the 3rd Circuit’s standard will lead manufacturers to “inundate” FDA with multiple variants of proposed labeling change to ensure that state lawsuits are pre-empted, hampering the agency’s other work.
EYE ON FDA
Shutdown watch — A speedy resolution to the partial government shutdown that’s idled parts of the FDA doesn’t appear in the cards. While industry user fees have helped the agency stay on top of certain work, like drug and device applications, that money won’t last forever. FDA Commissioner Scott Gottlieb tweeted Saturday that prescription drug user fee money will run out in about one month, while other carryover user fees for programs like generic drugs and devices is expected to last a bit longer. FDA will issue a more detailed analysis of its carryover balances this week. It cannot accept any new user fee payments during a shutdown.
Meanwhile many other FDA activities rely on appropriations from Congress.
Essential means ‘emergency’: The agency can continue work considered essential to public health, but that doesn’t mean all public health work continues, explained Steven Grossman, executive deputy director of the Alliance for a Stronger FDA, “When you get past the people who are on the front lines because of an emergency” or near to it, he said, a lot of routine public health work is on hold. Standing down when FDA can’t say “people will die tomorrow” could leave the country more vulnerable to future emergencies, he added.
Ryan Hohman, vice president of public affairs at Friends of Cancer Research said: “Any time an agency like the FDA is not running at full capacity there is a risk that important programs and scientific advances are slowed or stalled.”
This week: House tries to reopen government piecemeal: The FDA-Agriculture spending bill is one of four appropriations measures that House Democrats plan to take up this week in an effort to press the GOP-controlled Senate into reopening parts of the government. The legislation also includes language to ensure federal workers furloughed by the partial shutdown get paid. The bill would fund FDA through the end of the fiscal year and is nearly identical to ones passed by the Senate in August. More for Pros here.
DRUG PRICING
Trump blasts industry for 2019 price increases — “Drug makers and companies are not living up to their commitment on pricing. Not being fair to the consumer, or to our Country!” President Donald Trump tweeted Saturday, after the prices of hundreds of medicines rose an average of 6.3 percent on Jan 1. The number and size of the increases were in fact considered relatively restrained for the start of a new year, though analysts say its possible companies are delaying some hikes to avoid attracting public attention.
Trump’s health secretary Alex Azar put a more positive spin on the news, tweeting Wednesday that the price increases seen on Jan. 1, 2019, compared to a year earlier were smaller, crediting Trump’s leadership.
IN CONGRESS
House readies third attempt at pandemic preparedness and OTC reform … The House will vote Tuesday to reauthorize HHS’s pandemic response powers and revamp FDA oversight of over-the-counter drugs — the chamber’s third try at jump-starting the process, which stalled in the Senate. The latest legislation is identical to H.R. 7328 (115), which Reps. Susan Brooks (R-Ind.) and Anna Eshoo (D-Calif.) introduced in the waning hours of the last session.
… but Senate prospects remain murky … H.R. 7328, a so-called four corners agreement meant to address lingering differences in old versions of the legislation, passed the House easily even as the shutdown and budget battles loomed. But the latest bill’s fate in the Senate is uncertain, largely because of infighting between two Republicans on the HELP Committee, Sens. Johnny Isakson of Georgia and Richard Burr of North Carolina, that held up previous attempts. Neither has signaled his plans for this session.
… As the authorities of the office overseeing pandemic and disaster response are already expiring. They include an antitrust exemption that allows the HHS Assistant Secretary for Preparedness and Response to bring drugmakers together to make pandemic medicines, and another to protect their trade secrets — a key incentive for pharmaceutical companies to work with the agency on new countermeasures.
RESEARCH CORNER
Drugs’ returns eclipse R&D spending — Cancer drugs often return more than 14 times their research and development costs, according to a study in JAMA Network Open that analyzed sales for 99 oncology medicines. The researchers assumed a median R&D cost per drug of $794 million from a previous study and calculated that the medicines returned that investment in a median time of three years after FDA approval. Roche’s Rituxan and Herceptin went on to bring in nearly $90 billion each.
Calculating a direct R&D-to-profit relationship is rife with controversy. Pharmaceutical companies argue that R&D estimates don’t reflect costly drug failures or account for marketing and outreach to launch branded medicines.
The researchers contend it’s hard to justify high drug prices by pointing to R&D spending — especially with what they say is increasingly limited clinical evidence for new therapies. They note only a third of the 54 cancer drugs approved from 2008 to 2012 were shown to extend survival; most prolonged life by about two months. Ultimately, the authors write, high returns on cancer drugs may give drugmakers a distorted incentive to invest in tumors at the expense of other diseases.
PHARMA IN EUROPE
The problem with EU’s new medical device rules —The EU’s rush to crack down on faulty medical devices is backfiring as companies increasingly file for extensions that could push back deadlines to meet new requirements by five years, reports our colleague Sarah Wheaton. Those extensions originally were intended to ensure that devices don’t come off the shelves when the May 2020 deadline hits for the stringent reapproval and monitoring process. But they have become the norm for thousands of products as device makers say the time frame is too tight and there could be an approval bottleneck. Regulators maintain companies are just stalling. Read more here.
QUICK HITS
Labs grapple with surprise fee hike — The main trade group for diagnostic labs is calling for more transparency from CMS after it surprised the industry with a 20 percent user fee hike just days before the new year. The increase — the first for lab certifications and inspections in 20 years — comes as the labs are facing another round of 10 percent cuts in Medicare reimbursement for tests, Julie Khani, president of the American Clinical Laboratory Association, told Prescription PULSE. CMS says the hike is needed to close a funding gap of more than $9 million for lab oversight.
FDA launching plans to boost expanded access — The agency plans a new program this year to help patients access unapproved therapies, BioCentury’s Steve Usdin reported after speaking with Gottlieb.“Project Facilitate” will include deadlines for manufacturers to respond to requests and an agency phone number for patients and doctors to get help with applications. Drug companies have an obligation to consider expanded access, especially for unmet needs, Gottlieb told BioCentury.
‘Window dressing’ on regulating high-risk devices — FDA has responded to criticism of risky medical devices with promises to revamp the approval pathways — but that still would leave significant loopholes, medical journalist Jeanne Lenzer and healthcare advocate Shannon Brownlee write in The Washington Post. Manufacturers of high-risk devices could still win approval for updated versions through less stringent pathways, and device makers are not actually required to follow FDA’s most recent recommendations for products based on old devices, argue Lenzer and Brownlee, who suggest new device categories and reinstatement of a congressional oversight office.
Tainted meds slipping through inspection cracks — Over the past six years there have been nearly 300 drug recalls within 12 months of an FDA inspection of facilities where they are produced, according to a Kaiser Health News analysis Many of the products were mislabeled, contained the wrong dose or were contaminated by bacteria. A Florida facility passed inspection even as it was making a product that eventually caused serious infections in 64 people.
PHARMA MOVES
AstraZeneca’s Mark Mallon will be the new CEO of Ironwood Pharmaceuticals, the The Wall Street Journal scooped.
AbbVie rolled out a new executive leadership team that includes Michael E. Severino as vice chairman and president.
PBM lobby PCMA announced two new assistant vice presidents: Amanda Frost for research and Timothy Dube, regulatory affairs. Two current staffers will take on new roles: Kristin Bass as chief of policy and external affairs and Brian McCarthy as chief strategy and business operations officer.
DOCUMENT DRAWER
AHIP filed an amicus brief supporting Supreme Court review of a challenge to duplicative pharmaceutical patents.
IQVIA released a report on orphan drug exclusivity, pricing and treated populations.
FDA issued a new framework for oncology drug development including guidance on clinical trial endpoints.
FTC approved Teva’s request that it reopen and modify its decision in connection with the 2012 merger of Watson Pharmaceuticals and Actavis. Teva bought Actavis in 2016 and wants to extend an agreement that allows the company to supply the abuse-deterrent opioid Embeda to Pfizer.
CATCHING OUR ATTENTION
Are Part D plans overcharging CMS? — Medicare Part D providers have consistently overestimated their potential product costs by at least 5 percent, leading them to upcharge CMS by roughly $9.1 billion over a decade, The Wall Street Journal reports. Private insurers like CVS, Aetna, Anthem and UnitedHealth bid annually for contracts to provide prescription drug plans to seniors enrolled in the government plan. They project costs and eventual reimbursement needs in those submissions, which CMS then uses to make monthly payments.
The insurers told WSJ that the pattern of overestimating drug costs in these bids was a result of unpredictable pricing by manufacturers — and a concern that lowballing their forecasts would lead to financial losses. But the consistency suggests otherwise, according to researchers at Memorial Sloan Kettering Cancer Center — who said the probability of overestimating costs so frequently is one in a million.
CMS told WSJ that it has recently taken action to bolster Part D plans’ negotiating power to drive better deals.
