The stated aim is to assist FDA’s Division of Drug Marketing, Advertising, and Communications (DDMAC) in its efforts to deter promotional activities. DDMAC examines promotional pieces submitted to the agency, scans ads and TV commercials informally, and monitors drug company exhibits and programs at medical meetings. An important source of information is all the complaints the division receives are from industry competitors who see another company getting away with off-label promotion or unfair comparisons. It’s impossible for DDMAC to catch everything, and certainly not what’s said in meetings between doctors and sales reps or at sponsored dinner programs.

To kick off the Bad Ad program, which was announced last month, DDMAC staffers will give talks and distribute educational materials to providers at medical conventions and society meetings. A brochure advises doctors on how to recognize misleading promos: omitting risks, overstating effectiveness, promoting off-label uses, or making misleading comparative claims. FDA is making it easy for doctors to squeal about objectionable messages by establishing a special call-in number and email address.

It’s not yet clear if the campaign will generate a lot of finger-pointing—or if it does, how DDMAC will deal reports that are vague and undocumented (anonymous calls are okay). Marketers fear that doctors will file complaints based on misunderstandings and personal prejudices. Supporters of the program anticipate that marketers and sales reps will modify their pitches if they think that their audience is taking a much closer look at what they say. But free-speech advocates like the Washington Legal Foundation fear it will chill open exchange of health information, which can be useful.

The Bad Ad campaign fits FDA’s effort to step up enforcement, as Commissioner Margaret Hamburg promised a year ago. The agency has issued 186 warning letters so far this year, putting it on track to meet last year’s record of 570 enforcement missives, according to BNet Pharma. And more of those are coming from DDMAC, which doubled its warning-letter rate to 41 in 2009, vs. 21 the year before. Many recent letters challenge Internet marketing, an activity that remains on FDA’s radar screen. In April, DDMAC sent a long warning letter to Novartis challenging the company’s use of Web sites to promote unapproved uses and to make unsubstantiated claims for Gleevec. FDA plans to develop guidelines on Internet promotion and use of social media by drug marketers, but it’s proving to be a complicated business.

The AHRQ program fits proposals from leading Congressional Democrats, including House Energy & Commerce Committee chairman Henry Waxman (D-Calif), Senate Aging Committee chairman Herb Kohn (D-Wis) and Senate majority whip Dick Durbin (D-Ill). They and others sponsored legislation last year to fund “independent drug education and outreach” similar to the AHRQ initiative. Kohl held a hearing in March 2008 on academic detailing that reflected his long-term interest in efforts to counter messages from pharmaceutical sales reps.

After months of increasingly rancorous debate, the House finally approved legislation March 21 that makes significant changes in the nation’s health care system. The Senate is slated to approve the House-passed changes to its original reform bill shortly.

Of most importance to pharmaceutical companies, the legislation promises to significantly expand the number of Americans with some kind of health care coverage. This will enlarge the market for prescription drugs and moderate pressures for price controls. The legislation sets up a scheme to eliminate the confusing and contentious “doughnut hole” in the Medicare program, while avoiding proposals for government negotiation of Medicare drug prices. Drug reimportation is off the table, at least for the moment.

A major plus for pharma is that the bill establishes a clear pathway for authorizing follow-on biologics. Brand-name firms won a 12-year data exclusivity period, despite loud protests from generics makers. But all manufacturers are likely to benefit from clearer policies on how to proceed in developing and regulating “biosimilars” and “biobetters.”

Pharmaceutical companies will finance the high cost of reform by paying additional fees and higher Medicaid rebates. Fees based on a company’s share of market are slated to total $28 billion over ten years, starting at $2.5 billion in 2011. The Medicaid rebate also increases from 15 percent to 23 percent.

The legislation reshapes the health insurance market as well as government health care programs, all promising to impact the coverage and delivery of prescription drugs. Implementation will be a huge challenge, especially for state governments. Republicans, as well as various interest groups, are already looking for revisions and challenges. We will examine these issues more fully in the next issue of Pharm Exec.

In an emotional farewell address to PhRMA, President Billy Tauzin recapped his five years at the helm of the organization and his efforts to “recapture the value of the PhRMA brand” and to “re-earn the trust of people who had lost faith in us.” “We had to take the target off our backs—to wear a goodwill badge instead of a bull’s eye—and to prove our commitment to patients by our deeds, not just our words.”

He explained his support for health care reform, noting that instead of remaining “a one-party trade association, …we correctly reasoned that our only real enemy was disease and that only a fair and less partisan PhRMA would allow us to continue our work in the face of mounting and increasingly ugly partisan conflicts here in DC and around the country. That transition to a more balanced politics, while difficult then and now, continues to serve our critical mission. It was the right thing to do, and we would be wrong to let either national party determine our policies or our principles into the future.”

Tauzin warned industry leaders that the life-saving work of pharma companies “will never be fully appreciated. Face it and accept it. But know this for yourselves:  yours is not just about a life in business; yours is the real business of life.”

While the public may not understand the important work of pharma, Tauzin pointed to regulators who “should know better. It’s no excuse for health care bureaucrats who don’t even begin to understand the pain that real patients and their families experience waiting helplessly for an on-time decision on a new promising medicine or therapy, only to read about missed deadlines, unnecessary delays and bureaucratic barriers, all based on an increasingly excessive risk-averse premise. We need—we desperately need better balance here.

“And it’s no excuse for policymakers who can’t seem to recognize that life science research is the cornerstone of medical innovation and a huge part of our knowledge-based economy. Do we have to lose every last job in America before somebody connects the dots and calculates the losses?”

“It’s certainly no excuse for those who say nothing about the ads calling for more lawsuits against the products of medical innovation and then rail against an ad that informs patients about the warning signs of disease and the new options for treatment. Something is wrong in America when we make heroes of trial attorneys and villains of our medical scientists.”

The health reform proposal unveiled by the White House on Feb. 22, 2010 retains a number of provisions that directly affect drug coverage and industry revenues. The plan highlights that it will close the Medicare drug benefit “doughnut hole” by 2020 to make drugs more affordable to the elderly. Seniors will get some relief this year through a $250 rebate, and coinsurance will phase down over the next decade.

Because broader insurance coverage and gap closure will expand drug sales and industry revenue, the Obama plan also increases a proposed “assessment” on pharma from $23 billion in the Senate bill to $33 billion, starting in 2011 to avoid tax problems. Medical device makers also would have to pay $20 billion in fees over 10 years, starting in 2013.

Similar to previously approved Senate and House bills, the plan retains a boost in Medicaid drug rebates from 15 to 23 percent and authorizes discounts on drugs sold to community hospitals. Drug companies would have to fully disclose financial arrangements with doctors, and pharmacy benefit managers would report rebates and discounts on drugs, along with success in boosting generic drug use.

The proposal also seeks to curb “pay-for-delay” deals between brand and generic drug manufacturers; stipulates that effectiveness research would not influence coverage decisions; and supports establishing a pathway for follow-on biologics.

For these and most of the provisions in the White House announcement, there are few specifics or proposals for implementation.

Many key provisions in enacted Democratic legislation are featured in the plan: an insurance exchange to provide coverage options to the uninsured; tax credits to help individuals and small business pay premiums; curbs on insurance industry discriminatory practices; aid to state Medicaid programs; an individual coverage mandate (with low penalties); and cuts in rates for Medicare Advantage plans.

Most notable politically, there’s no govern-run coverage option. And the plan significantly scales back a proposed tax on high-cost “Cadillac” health plans, making up the lost revenue with a tax hike on high-income individuals. Most notable politically, there’s no govern-run coverage option.

FDA officials have been promising stiffer enforcement of manufacturing and marketing requirements for several months, and commissioner Margaret Hamburg is moving full-speed ahead to fulfill those predictions. Last month, FDA announced it will issue warning letters quickly when it finds violations and will require manufacturers to respond promptly. Too many serious violations “have gone unaddressed for far too long,” including failings with product quality, adulteration and false and misleading labeling and advertising, Hamburg commented at a meeting sponsored by the Food and Drug Law Institute. The commissioner wants to limit all the back-and-forth wrangling with regulated companies that delays compliance. And if there’s a situation that raises serious health and safety issues, FDA may launch a recall or seizure before even issuing a warning letter, she warned.

Under the new program, manufacturers will have 15 working days after receiving an inspection report to respond to any cited violations. If FDA doesn’t receive a sufficient response in that timeframe, the agency will issue a warning letter. The 15-day policy was described in an Aug.10 Federal Register notice and will apply to violation notices issued after Sept. 15.

On its part, FDA will try to promptly reinspect or investigate a company’s efforts to correct violations. If the problems are not corrected, though, the agency won’t just issue another warning letter, but will look at penalties, seizure, closures or other action.

Carrot for Compliance
In addition to waving a bigger stick, FDA wants to encourage pharma companies to quickly address violations by establishing a formal process for resolving enforcement actions. After determining that problems cited in a warning letter have been corrected, beginning this month the agency will state that compliance in a formal close-out letter and post the information on its website. This gives companies an official statement to show investors and customers that they’re back in FDA’s good graces, and that a facility or product is no longer tainted.

Another important change is to end the extra legal review of warning letters before they are sent out. The Bush administration revised procedures so that the FDA chief counsel examined all warning letters, a policy that was criticized for delaying and reducing agency enforcement actions against industry. “This created very cumbersome practices without a lot of benefit,” Hamburg commented. Now each FDA center will review and identify those warning letters should go to the chief counsel because they raise “novel, complex and sensitive issues,” such as an activity involved in a lawsuit or recently established by legislation.

Hamburg hopes that these policies will spur speedy corrective efforts by cited companies and encourage broader compliance throughout industry. Publicizing agency enforcement actions, she said, will increase public confidence in the agency and better educate patients and consumer about potential risks in medical products.

Faster review of violations and follow-up to corrective actions will require more resources, which Hamburg says are now available due to FDA budget increases. The food safety legislation before Congress also will give the agency some additional enforcement tools.

Hamburg expects an initial increase in warning letters but hopes that the volume will level off over the long run as industry recognizes that a strong compliance program is good for business and for consumers. FDA’s success in spurring compliance “should be measured not by the number of warning letters or injunctions or seizures,” she said, but by “our impact on the health and welfare of the public.” Failure to meet FDA standards means that a company is “putting the public at risk” and also “jeopardizing the public’s confidence in your industry.”

Typical of new administrations, FDA commissioner Margaret Hamburg is moving around some staff functions and bringing in new faces, but holding off on major reorganizational changes at the agency. There will be a new “food czar”—a deputy commissioner of food—but not a comparable official in charge of drugs, biologics and medical devices. Hamburg also is looking for a politically savvy health expert to head up a new Center for Tobacco Products, plus other newcomers to direct revised operations for managing policy, budget, science and communications functions in the FDA commissioner’s office.

The departure of the remaining top staffers under the previous administration—chief of staff Susan Winckler, policy chief Randall Lutter and chief of operations John Dyer—facilitates these changes. Budget development will shift to the policy office to better meet demands from Congress for more detailed information on how FDA will spend all the added money it’s seeking. An office of external affairs will handle FDA’s relations with the media, health professionals and interest groups, and a new Office of Special Medical Programs is slated to absorb a number of cross-cutting programs—bioresearch monitoring, combination products, orphan drugs and pediatrics.

That will leave chief scientist Jesse Goodman to focus on innovation and counter-terrorism, in charge of FDA’s Critical Path Initiative and pandemic response. Goodman also will head up a new office of scientific integrity that will resolve scientific disputes within the agency, and share oversight of the Center for Toxicological Research in Arkansas.

But Hamburg’s main focus clearly is on improving food safety and oversight. The commissioner proposed these changes to the secretary of Health and Human Services (HHS) in June, just as the Obama administration rolled out new proposals from its food safety working group to better control food-borne illness. As part of the initiative, FDA issued a long-awaited final rule for reducing salmonella contamination in eggs and promised new guidance on ways to prevent E.coli contamination of tomatoes, melons and leafy greens.

At the same time, Hamburg announced the return of former FDA official and food regulatory expert, Michael Taylor, as a special advisor on foods. The expectation is that Taylor will be new food czar, overseeing the Center for Food Safety and Nutrition (CFSAN) and the Center for Veterinary Medicine (CVM), along with extensive food-related oversight provided by FDA’s field force. Taylor comes to FDA with the benefit of experience as administrator of the Department of Agriculture’s Food Safety and Inspection Services (FSIS) as well as FDA deputy commissioner for policy in the early 1990s. As an academic for the last 10 years, Taylor has been involved in food safety research and policy. He has backed proposals to create a single federal agency governing food safety, but says that’s off the table for now.

Bigger Budget

Hamburg will have support for reorganization and expansion in the form of a $3 billion budget for the coming year. House and Senate spending bills provide FDA with $2.3 billion in appropriated funds plus some $600 million in user fees. The legislators specify increases in funds for generic drug approvals and instruct FDA to use much of the added money to increase inspections of food and drug operators, examine more imports, upgrade lab equipment and improve information technology.

There are special earmarks for research on food-borne contaminants, neuroblastoma, dietary guidelines and the impact of Risk Evaluation and Mitigation Strategies for drugs. The Senate bill earmarks $18 million for the Critical Path Initiative, along with research on tropical diseases, tuberculosis treatment, antibiotics and the bioequivalence of anti-epileptic drugs.

Differences in the specifics will be ironed out this fall, with an eye to approving final agency funding before the new fiscal year begins Oct. 1 – a major accomplishment after years of missed funding deadlines.

No one was surprised last month when the White House nominated world-famous geneticist Francis Collins for the top job at the National Institutes of Health (NIH). The driving force behind NIH’s Human Genome Project for 15 years, Collins is experienced in managing large research projects and big budgets and in making friends on Capitol Hill.

In the year since he left NIH, he actively supported President Barack Obama’s election campaign and wrote a book on personalized medicine that reflects his belief in the power of molecular biology to shape medicine and the world. Collins has expressed disappointment that important genomic discoveries have not led to new life-saving therapies, and he will want to use his new position to change that.

For pharma, Collins’ offers prospects of increased emphasis at NIH on translational research and more collaboration in developing drugs for orphan and neglected diseases. Comparative effectiveness research, he says, should identify subpopulation responses to treatment and support personalized medicine.

Collins has been highly praised for bringing in the human genome project ahead of schedule and below budget; as NIH director he will need all his administrative skills to manage the vast NIH complex and shape how its disparate institutes dole out more than $25 billion in grants to research organizations and scientists. NIH staffers see him as likely to favor big, high-profile projects over the needs of individual researchers. An evangelical Christian, he also will face pressure to clarify how his personal faith can co-exist with support for evolution and science.

Collins takes over NIH at an enviable time. The agency gained some $10 billion in extra funds through the economic recovery legislation enacted earlier this year, providing a nice addition to the agency’s $30 billion budget. Although Congress is not likely to provide such largesse in the future, some increases are likely.

Spurring Stem Cell Research
A high-profile task for Collins is to implement recently finalized guidelines on human embryonic stem cell research (hESC), which NIH issued just as Collins’ nomination was announced. The new program calls for an NIH panel of scientists, ethicists and advocates to assess that all candidate stem cell lines meet ethical standards for government-funded research:  that they are derived from leftover embryos created by in vitro fertilization, that donors understand their options and consent to research uses, and that there is no compensation to or pressure on donors to do so. NIH will establish a registry of all cell lines deemed eligible for federal funding, with an eye to reducing uncertainty and confusion in the research community.

The new rules were proposed last April after President Obama issued an executive order rescinding Bush administration restrictions on government-funded hESC studies. The new rule promises to vastly expand opportunities for research in this area, despite continued curbs on funding studies that use stem cells created solely for research purposes or cell lines derived through somatic cell nuclear transfer, a technique that many researchers consider highly promising. While life-saving medicines ultimately may emerge, a near-term benefit may be the development of new cellular assays for screening drug candidates and other methods useful in drug development.

Related articles:

• Final U.S. rules out for government stem cell research (ctv.ca)
• Draft of stem cell research guidelines unveiled (cnn.com)
• Did Obama Open the Door to Human Cloning With His Stem Cell Order? (usnews.com)

One lead initiative is to define FDA’s “global footprint” for dealing with food safety and drug and medical product development on an international basis. Establishing overseas offices is just one aspect of developing a comprehensive strategic approach to addressing global health issues, Hamburg explained. These hubs provide more on-the-ground understanding of local developments and will permit more “nimbleness” in a crisis, she pointed out. But FDA also needs to develop partnerships with sister regulatory agencies to promote harmonization and provide assistance and capacity-building in countries with less developed regulatory frameworks.

Tackling tobacco
A high priority for FDA is to develop a framework for regulating tobacco products. Hamburg feels strongly that FDA, as a science-based public health regulatory agency, is the appropriate organization to address the “important public health problems” raised by tobacco use. The agency is still developing staffing plans and the rollout for a new tobacco center, but Hamburg believes that the new legislation provides the necessary tools and authorities, and does not “overload the plate” at FDA. She does not expect to take resources from other areas to support tobacco regulation, or that broader organizational changes will be needed.

Despite the heightened focus on food safety and tobacco regulation, the drug and medical product area is crucial to FDA’s mission, Hamburg emphasized, adding that “I do not see us stepping away from that important component.” She regards industry as “absolutely key partners in what we do” and aims “to get more involved in issues of innovation and in providing swift reviews of new products.” This a good time, she feels, to take a new look at the Critical Path Initiative and at how FDA can leverage emerging science and technology to strengthen new product development and review, as well as postmarket surveillance and product communication.

In the marketing and promotion area, Hamburg said she “cares deeply about making sure consumers get access to appropriate and adequate information about the choices they need to make.” Yet she is concerned that in a world with such a wide array of media outlets such as blogs, Web sites, and 24-hour cable TV, “it is very easy for inaccurate information to get out there. We have a real responsibility to make sure that where we have authority and opportunity, we provide the clearest and most accessible public health message possible.” Hamburg wants to work more with drug companies and advertising firms to ensure that any information on medical products is accurate and reliable and reflects available scientific data.

Hamburg also anticipates a closer working relationship with the Centers for Medicare and Medicaid Services (CMS) to help move medical products “out of the review process and into the market place.” Early discussions can help CMS understand what new products will emerge, and which may enable them to streamline their own procedures for review and reimbursement, she explained.

The commissioner recognizes the importance of having the resources to attract and retain the expertise needed to accomplish these many goals. She hopes that her leadership will be marked by a “strong and clear emphasis on science-based decision making.” If there’s a question about the safety or efficacy of a drug on the market, though, “I will not have any hesitancy about examining it closely,” she warned.

Setting up a new tobacco center will take some juggling, Hamburg acknowledges, but it is a high priority. How FDA takes on these new responsibilities will be looked at as a measure of FDA’s leadership. “FDA needs to make significant strides in order to accomplish its mission in a global world,” said Hamburg

Daschle’s familiarity with health policy issues is evident in the book he co-authored earlier this year: Critical: What We Can Do about the Health-Care Crisis. But with less administrative experience than the governors who preceded him, Daschle will need capable deputies to oversee key HHS agencies, including the Food and Drug Administration, the National Institutes of Health and Medicare and Medicaid.

The former Senator from South Dakota lost his seat in a hard-fought battle in 2004. He was criticized then as too much of a Washington insider, and his nomination provoked similar comments from some parties. But most observers regard the appointment as realistic assessment that consummate political skill is needed to reform the nation’s health care system.