Transparency to Alter FDA and Industry Practices

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology-07-02-2010, Volume 34, Issue 7

More information may be released to improve public understanding of regulatory policies.

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.

Jill Wechsler

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.

In Washington this month

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

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.

Tracking performance

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.

Opening up enforcement


A more substantive and controversial Phase 2 initiative, which was published May 21, 2010, includes 21 proposals for disclosing regulatory documents and actions (posted on under "transparency"). In the area of field inspections of manufacturing facilities and clinical research sites, FDA wants to list when a company is inspected and whether that site visit uncovered violations or problems requiring corrective action, or whether the entity passed inspection. FDA currently makes public only those inspection reports that raise important safety or regulatory issues. Otherwise, interested parties have to request this information through the Freedom of Information program, which can take months, if not years.

The task force received fairly broad support for regular posting of inspection reports, including from some companies that feel the information can help industry understand FDA expectations and achieve compliance. The task force suggested that inspection results may assist manufacturers and research sponsors in selecting distributors, contractors, and other business partners. A related idea is for FDA to provide summary information about common violations to enhance public understanding of its inspection practices.

Manufacturer compliance status also could be clarified by posting untitled letters on the FDA website, expanding what the agency now does with Warning Letters and with untitled letters related to biologics and drug marketing. These listings would include a company's response to the untitled letter, if the firm desires, along with the enforcement close-out notices that FDA recently began to make public. Despite concerns that posting all untitled letters could lead to information overload and the idea that untitled letters are not very useful, the task force decided that these documents can alert the public to violative practices and encourage industry compliance.

Another important change proposed in the Phase 2 document would require manufacturers to inform FDA when they initiate a product recall so that the agency can advise the public about defective, mislabeled, or potentially harmful foods or medical products. Because the agency has limited authority to remove violative items from the market, most product recalls are voluntary; companies usually inform the agency of their actions, but are not required to do so.

Providing information about a recalled product, the number of items involved, and the cause of the product defect is central to protecting public health, the task force states. At the same time, FDA wants to be able to clarify which similar products are not being recalled and when the recall (including the removal from market or destruction of affected products) has been completed, thus eliminating the potential for danger.

Implementing this type of recall notice provision may require that Congress give FDA mandatory recall authority, as proposed in food-safety legislation awaiting action on Capitol Hill. The recent massive recall of children's cold medicines by Johnson & Johnson's (New Brunswick, NJ) McNeil subsidiary has bolstered support in Congress for granting FDA recall authority over drugs and medical products, along with other enforcement powers.

Several additional transparency proposals could enhance public access to information about product safety and agency enforcement priorities. One initiative would expand the availability of adverse event reports by establishing a user-friendly system that makes it easy to search for safety reports on specific products. FDA also proposes in its Phase 2 document to publish weekly listings of high-level enforcement issues (i.e., those events that require involvement of the US Department of Justice). Posting agency work plans after five years is suggested as a way to convey FDA enforcement priorities without providing information that can help noncompliant entities avoid detection.

Submissions and denials

Even more significant transparency proposals aim to disclose when drug-product manufacturers seek FDA approval to launch clinical trials or to bring to market a new drug, biologic, or medical device. FDA also wants to announce when such applications are withdrawn, rejected, or delayed, and to release Complete Response (CR) letters that describe why the agency is not approving a submission and what the sponsor needs to do to get its product to market.

Sponsors often elect to announce when they file an investigational new drug (IND) application to demonstrate that a development project is moving forward, and the FDA Amendments Act of 2007 requires manufacturers to post information about ongoing clinical trials and their results on the website. However, current FDA regulations prohibit the release of most information regarding the status or substance of investigational products.

The transparency task force considers information about investigational new drugs important to patients and physicians awaiting new treatments and also believes such information would encourage patient enrollment in clinical trials. The task force, therefore, proposes that FDA disclose IND filings, including the name of the sponsor, date of application, and the anticipated indication and trade name. The agency also wants to indicate when an IND is placed on clinical hold or is terminated or withdrawn, information that industry fears could be misconstrued.

The task force further proposes that FDA provide more information on the status of market applications for new drugs and medical products. Under current policy, FDA only announces when it approves a medical product for market, but not when a manufacturer files a new drug application (NDA) or regulatory submission for a generic drug, biologic, animal drug, or medical device. Manufacturers often acknowledge application filings in financial reports, and FDA posts a good deal of information on products scheduled for advisory-committee review.

As part of Phase 2, the agency seeks authority to disclose when a company files a market application or efficacy supplement for a new use of an existing product. FDA also wants to announce when such applications are withdrawn or abandoned, especially when such action arises because of safety issues. In a related proposal, the task force would like FDA to be able to explain to the public that safety concerns or regulatory issues are not responsible when a sponsor abandons or withdraws an application for an orphan drug purely for business reasons; the aim here is to encourage other parties to continue development of a needed therapy for a rare disease.

An important, and controversial, proposal is for FDA to release refuse-to-file notices and CR or not-approvable letters for applications and efficacy supplements for human and animal drugs and medical devices. Sponsors often issue a summary of a CR letter to acknowledge a delay in approval and outline a scenario for reaching the market in the future. Manufacturers are wary that posting CR letters might reveal proprietary information, but FDA feels that company releases seldom fully explain agency decisions. Former FDA official Scott Gottlieb, now with the American Enterprise Institute, says that drug companies should support the release of CR letters because the prospect of explaining to the public why it is delaying approval of a needed therapy may make it "harder for the agency to make bad decisions," particularly with diseases that lack approved treatment. Investors similarly like the idea of having access to the full details of FDA's statements, and the agency feels that the information would be useful to doctors and patients.

However, the transparency panel decided not to seek disclosure of refusal or CR letters to generic-drug manufacturers or for manufacturing and labeling supplements. The hundreds of chemistry, manufacturing, and controls supplements filed each year contain a great deal of trade secrets that would be difficult to redact and, the task force notes, "would provide little insight about the rationale underlying FDA's drug-review process."

Guarding secrets

An important consideration of the transparency initiative, said Sharfstein in a May 2010 press briefing, is to obtain an "appropriate balance" between expanded disclosure and maintaining confidentiality of trade-secret information. The task force notes that protecting proprietary information is key to maintaining investment in biomedical research and development, and that its deliberations need to address what information should fall under the trade-secret umbrella and what should be available to the public.

In its report, the task force notes that a company's manufacturing methods and processes and precise product formulations generally meet the trade-secret definition and should remain private. But other data such as clinical-trial results and adverse-event reports, may be more appropriate for disclosure. FDA now treats most of industry-submitted information as confidential, even if it does not fall under the trade-secret definition. The task force thus seeks to consider the public benefit in withholding or releasing such information, as well as the often heavy cost of redacting confidential information from material to be disclosed.

Although FDA is not proposing to release raw data from clinical trials, as opposed to summary information, the panel suggests that access to such information might be useful in certain situations. This data may help sponsors identify new opportunities for developing products and alert health professionals to potential safety signals.

One factor guiding some FDA transparency proposals is the desire to harmonize US disclosure policies with those adopted by the European Medicines Agency (EMA) and other regulatory authorities. In proposing to list NDAs and to post information on an application's status, the task force noted that EMA already discloses when a company files or withdraws a marketing application, as well as the agency's evaluation of the product. EMA also posts its reasons for denying approval of a new product or additional indication, similar to FDA's proposal for releasing CR letters.

Interestingly enough, EMA recently was criticized for failing to fully explain certain licensing decisions and adverse events. The European Ombudsman took the regulatory authority to task for refusing to provide public access to safety reports, and an article in the May 21, 2010, Lancet further challenged EMA for not explaining an approval decision. A Lancet editorial cited FDA's transparency initiative and recommended that the two authorities coordinate in this area.

Implementing many of the FDA transparency proposals will require legislative change as well as new rulemaking. In unveiling the agency's Phase 2 proposals, Sharfstein explained that the task force focused on the "right thing" to do, policywise, and not on the cost or feasibility of taking such action. In the coming months, the task force will review public comments on the proposals, which will be accepted through July 20, 2010, to evaluate where disclosure may accelerate product development and promote public health. FDA also plans to conduct a legal and resource analysis for each proposal and use the results to decide how to move forward. Commissioner Hamburg will make the final decision on which proposals to adopt internally and which proposals require Congressional action to revise rules that limit public access to drug information.

Jill Wechsler is Pharmaceutical Technology's Washington editor, 7715 Rocton Ave., Chevy Chase, MD 20815, tel. 301.656.4634,