Transparency to Alter FDA and Industry Practices

More information may be released to improve public understanding of regulatory policies.
Jul 02, 2010
Volume 34, Issue 7

Jill Wechsler
The federal transparency campaign is reshaping drug research, production, regulation, and marketing on multiple fronts. The US Food and Drug Administration and the National Institutes of Health (NIH) are requiring more disclosure about the financial relationships between pharmaceutical companies and the scientists who conduct biomedical research and serve on government advisory committees. A new FDA-Track program proposes regular reports on the agency's work and performance (see sidebar, "Tracking performance"). Health-reform legislation authorizes more extensive public access to information on a host of health-related activities, including drug formulary listings, consumer out-of-pocket costs, and payments from pharmaceutical companies to doctors and health professionals.

In Washington this month
Some members of Congress would also like to require public disclosure of prices charged for pharmaceuticals, as well as for hospital care and doctor visits. The House Energy and Commerce Committee held a hearing in May to examine whether broader transparency about healthcare costs would promote competition and lead to lower consumer prices. Pharmaceutical companies, hospitals, and healthcare providers argued that full disclosure of competitor prices could undermine negotiations that often lead to lower costs, a position supported by the Congressional Budget Office. Manufacturers also note that consumers already have access to more information about formulary coverage and cost-sharing requirements, which is fueling a big shift to generic drugs.

While legislators may be wary of mandates for price disclosure, payers and consumer organizations are filling the gap by scrutinizing drug prices more closely and publishing reports on pharmaceutical cost trends. In April, Express Scripts reported a 9% rise in brand-name pharmaceutical prices for 2009, the biggest increase in at least 10 years. Similarly, an analysis by the American Association of Retired Persons (AARP) reported a 9.7% increase in drug prices for the drugs most used by Medicare beneficiaries for the 12 months ended March 2010. AARP noted specific price hikes for brand-name and specialty drugs and price declines for generic drugs.

Opening the black box

Tracking performance
Most significant for pharmaceutical companies is the FDA initiative to expand the amount of information available to the public about field inspections, product recalls, and the status of drug development and approval requests. The agency's Transparency Task Force, which began weighing such policies a year ago as part of the Obama administration's Open Government campaign, believes that providing more information on FDA activities will build public confidence in the agency's decision-making process. In announcing the program in June 2009, Commissioner Margaret Hamburg emphasized the need to shed FDA's "black box" image by reducing curbs on information disclosure that hinder the agency from explaining its rules and processes.

The task force, which is headed by Principal Deputy Commissioner Joshua Sharfstein, held several stakeholder meetings and listening sessions during the past year to help formulate its recommendations. The panel unveiled a fairly innocuous Phase 1 transparency initiative in January that included a new web-based "FDA Basics" primer on what FDA regulates and how it operates. More than 150,000 visitors have viewed the site since its establishment. Phase 3, which should be released this summer, will propose ways for FDA to improve communications with regulated companies, namely by streamlining the process for issuing guidance and holding more frequent meetings with sponsors.

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