Globalization and reform initiatves will shape pharma production, pricing, and pipelines in 2010.
After a year of considerable turmoil in Washington policy and regulatory circles, there is optimism that healthcare coverage and requirements for medical-product development will gain some clarity in the coming months. National healthcare reform legislation either will become law in some form, or will die a painful death. The new team heading up the US Food and Drug Administration will be firmly established and eager to implement new policies and programs.
Although healthcare reform could bolster pharmaceutical industry sales over the long run, analysts still expect industry growth to be relatively modest because of the global economic downturn, patent expirations, and growing pressure to reduce prices. Pharmaceutical manufacturers will be watching key trends and developments in 2010 that will shape drug development and production for years to come.
The future of pharmaceutical sales lies in the global marketplace, and industry is running hard to become more firmly established in growth regions. The desire to build a presence in China, India, Brazil, and other newly industrialized nations, and the desire to cut production and research costs at home are driving more foreign ventures. Novartis (Basel, Switzerland), for example, is investing $1 billion in research and development (R&D) in China in anticipation of that country becoming a top market by 2015.
Tapping emerging markets also involves increased industry investment in developing new vaccines and therapies to improve treatments for malaria, tuberculosis (TB), and neglected tropical diseases. FDA is actively supporting such efforts and is likely to do more under Commissioner Margaret Hamburg, who has a strong background in public health and infectious disease. The agency is advising on research methods for testing new TB treatments to replace ineffective old therapies and to help counter a resurgence in drug-resistant TB strains. There's also hope that the agency's priority-review voucher program will stimulate industry R&D on neglected diseases.
To better monitor the growing volume of food products and pharmaceutical ingredients imported into the US, FDA has been establishing overseas offices and plans to double the number of foreign inspections it conducts each year. New legislation to overhaul food safety would further expand the agency's inspections of food facilities in the US and abroad. In addition, FDA is partnering with European regulatory authorities to share inspection information and conduct joint inspections of foreign API producers, an initiative that could expand if beneficial.
The battle against infectious disease has spurred worldwide investment in new vaccine development and production, and this surge is slated to continue. Global funding of a vaccine to combat the H1N1-influenza pandemic has spurred construction of new vaccine manufacturing faculties in the US and globally. New vaccines to combat malaria and TB are undergoing clinical trials, and scientists remain optimistic about moving forward with the long-sought vaccine to prevent HIV infection.
Foreign manufacturers are expanding vaccine production as well, including developing new vaccine production and testing methods. Novel antigens are in the works, and vaccine-makers are moving forward with long-discussed cell-based manufacturing technology for influenza vaccine. In the US, an antismoking vaccine from Nabi Biopharmaceuticals (Rockville, MD) with support from GlaxoSmithKline (London) is moving into late-stage testing, while scientists continue to seek therapeutic vaccines for cancer and other conditions.
In Washington This Month
FDA and other regulatory authorities are working closely with vaccine- makers to develop new test methods and innovative treatments and to strengthen the World Health Organization's vaccine prequalification program to facilitate access to therapies in developing countries.
Longer supply chains and growing imports raise questions about the ability of drug manufacturers to ensure the quality and safety of all of their drug products. At the same time, FDA cannot feasibly check the thousands of products and ingredients coming into the US. As a result, the agency expects manufacturers to do more to ensure that contractors and suppliers have a commitment to quality and that they are routinely monitored and inspected. The aim is to prevent future adulteration crises such as those involving heparin, melamine, and diethylene glycol (DEG)-contaminated glycerin in medical products.
Along these lines, FDA's Center for Drug Evaluation and Research (CDER) continues to emphasize the importance of manufacturer quality-by-design (QbD) and risk-management systems to ensure drug quality. CDER officials are evaluating a QbD review pilot and launching a similar initiative for biotech therapies. Additional efforts to harmonize quality standards, possibly for excipients and pharmacopeial standards, are under discussion. An electronic drug registration and listing system was fully implemented this past year, replacing paper submissions, which should make it easier for FDA to identify and track products and manufacturing facilities.
Manufacturers also could benefit from a long-awaited FDA guidance on reducing the volume of manufacturing supplements that require preapproval. The aim is to permit companies to report certain changes in annual reports, instead of filing supplements, an approach that will provide more predictability to companies contemplating improvements and scale-up of production processes.
Drug safety and risk assessment
FDA is involved in multiple initiatives to ensure the appropriate use of approved medicines. It will be interesting to see whether the added tools for ensuring drug safety through the product life-cycle encourages agency approval of new medicines that raise safety concerns. The FDA Amendments Act of 2007 (FDAAA) authorizes postapproval label changes when new safety issues arise and penalizes manufacturers that fail to conduct agreed-on postmarketing studies. The Act mandates for a more extensive listing of clinical trials and study results on the ClinicalTrials.gov public website and for the use of Risk Evaluation and Mitigation Strategies (REMS) to govern postmarket prescribing and surveillance.
Manufacturers—along with regulatory authorities, health professionals and patient groups—will be watching to see how well these programs detect and prevent drug safety problems. FDA has approved REMS for more than 90 products, including drugs and medical products already on the market as well as new treatments. A high-profile initiative is to develop a REMS for the entire class of extended-relief opioid medicines. The goal is to ensure continued access to these medications for patients suffering from chronic pain, while also curbing inappropriate prescribing, unintentional overdosing, and intentional abuse through a more coordinated risk- management strategy.
Internally, FDA is bolstering its safety assessment efforts. CDER's Safety First program integrates oversight of drug-safety issues by clarifying responsibility for pre- and postapproval drug safety assessment and by strengthening safety-related policies and procedures. The agency's Sentinel Initiative includes the development of an electronic system for monitoring medical-product safety. After a few pilot projects, the system eventually should be able to identify emerging safety problems and patient subgroups experiencing adverse events through links to healthcare-system databases.
FDA's Safe Use initiative, which Hamburg announced in November, aims to build partnerships with other components of the healthcare system to ensure that medicines are used safely and appropriately. The agency plans to partner with other government agencies and with healthcare providers to address situations that lead to medication errors and inappropriate prescribing.
The Sentinel System for monitoring drug safety requires access to electronic health information systems, a prominent goal of health-reform efforts. The HITECH (health information technology) portion of economic stimulus legislation jumpstarted this effort by providing $19 billion to support the use of electronic health records by doctors and hospitals and to develop standards and systems supporting electronic health information exchange. Electronic databases promise to accelerate detection of drug adverse events and to streamline data collection from clinical trials and population studies.
At the same time, broader access to personal health information has generated demands for stronger protections against unauthorized disclosure of personal patient records. The concern for the biomedical research community is that privacy issues could limit access to patient information needed for pre-clinical and postapproval studies.
An expert panel organized by the Institute of Medicine recommends simplified approaches to clinical research that use a distributed model for health surveillance and assessment, based on the data-sharing capabilities of electronic information systems.
Personalized medicine & comparative research
Electronic health-information systems also are critical for the development of personalized, or individualized, medicine and the necessary diagnostics to determine who may benefit or experience harm from certain therapies. The shift to more targeted treatment requires access to personal health data to recruit research subjects who meet increasingly specific genetic-based enrollment criteria and to identify those individuals who should—or should not—receive a treatment based on specific genotype.
Researchers also will be tapping health-system databases to assess outcomes and to compare the risks and benefits of medical products. Federal agencies are funding a number of comparative-effectiveness research (CER) projects with an eye to assessing a broad range of medical treatments and strategies. Industry seeks limits on federal funding of studies that compare one drug to another and focus on cost comparisons, but more CER will inevitably highlight comparative prices as well as health benefits.
Prices & pathways
Whatever the outcome of healthcare reform legislation, prescription drug prices will remain in the spotlight. Broader coverage of pharmacy benefits could reduce public complaints about high drug prices, but consumer groups and healthcare providers will continue to publicize how costly medicines block patient access to treatment. Recent reports from Wall Street analysts as well as patient advocates document record increases in wholesale drug prices this past year, at a time when inflation has declined notably. The studies exposed manufacturers to charges of jacking up revenues in anticipation of tighter controls on pharmacy spending.
Such developments will continue to build support for greater access to new generic drugs, including follow-on biologics (FOBs). Congress is poised to establish a regulatory pathway for approving biosimilars for market, as there is agreement between generic-drug manufacturers and innovator firms on FDA regulatory approaches and clinical-testing requirements.
But there's still strong disagreement on data exclusivity issues, as pharmaceutical and biotechnology companies successfully pushed for 12-years of exclusivity on FOBs. Manufacturers on all sides will be assessing how the various requirements and protections will shape the development of biosimilar products.
Transparency is a recurrent theme in healthcare reform and regulatory matters. Efforts to lower drug prices will seek broader disclosure of manufacturer rebates and discounts negotiated by payers and health plans. Congress further aims to shed "sunshine" on drug company payments to physicians as a way to reduce industry influence on prescribers.
Manufacturers also face more transparency in FDA regulatory decisions and pending drug applications. Commissioner Hamburg established a high-level FDA transparency task force last June to identify ways to better inform the public about FDA operations, a move designed to enhance agency credibility.
Under the leadership of FDA Deputy Commissioner Joshua Sharfstein, the task force is examining whether it should be able to disclose when an application is filed, withdrawn, or turned down by the agency; to discuss data contained in product applications that are abandoned or withdrawn; and to reveal the contents of complete response letters sent to sponsors.
The panel is examining what kind of emerging safety information should be disclosed and when, and whether early communication about ongoing safety reviews of foods and medical products would be beneficial or raise unnecessary concerns about a product. The panel will issue a report in the coming year on what information FDA should be able to release on its own, and what changes would require new regulations or legislation.
Assessing healthcare reform
However Congress resolves the great health-reform debate of 2009, there will be lasting effects on pharmaceutical manufacturers. The discussion has brought to the fore a range of proposals for improving the Medicare Part D drug benefit, reducing the cost of drugs to state Medicaid programs, and stimulating more CER on prescription drugs. These issues are not likely to disappear.
Congressional leaders have made it clear that pharmaceutical companies should accept lower drug prices in exchange for policies to boost drug coverage to some 30 million potential customers. Cost-cutting strategies include discounts on drugs provided to Medicare beneficiaries caught in the Part D coverage gap, added rebates on drugs provided to low-income Medicare beneficiaries, higher rebates on drugs dispensed by state Medicaid programs, and various fees and disclosure requirements.
Congress is anxious to gain any and all savings from the pharmaceutical industry because reform legislation does very little to "bend the cost curve" on the nation's healthcare system. Proposals to curb spending by cutting fraud and waste, establishing electronic medical records, assessing the effectiveness of medical treatments, and bolstering preventive care may improve healthcare quality, but won't make any real dent in federal expenditures. The choice for members of Congress is to adopt admittedly imperfect reform legislation, or to admit failure and abandon the entire exercise. Either way, the outcome will be crucial to pharmaceutical manufacturers as we move into 2010.
Jill Wechsler is Pharmaceutical Technology's Washington editor, 7715 Rocton Ave., Chevy Chase, MD 20815, tel. 301.656.4634, firstname.lastname@example.org