Drug, Biotech Firms Push Regulatory Reform

Regulatory Reform Author: Kathryn S. Brown Listening to the radio on his way to work each morning in Washington D.C., Stephen Bent, chairman of the biotechnology and pharmaceutical group at the law firm of Foley and Lardner, hears the same thing: advertisements calling for drastic reform of the Food and Drug Administration (FDA). "Some of the commercials are by a Republican think tank," notes Bent, formerly a research scientist in neurophysiology at Yale University. "Some are by various inter

Kathryn Brown
Jan 21, 1996

Regulatory Reform Author: Kathryn S. Brown

Listening to the radio on his way to work each morning in Washington D.C., Stephen Bent, chairman of the biotechnology and pharmaceutical group at the law firm of Foley and Lardner, hears the same thing: advertisements calling for drastic reform of the Food and Drug Administration (FDA).

"Some of the commercials are by a Republican think tank," notes Bent, formerly a research scientist in neurophysiology at Yale University. "Some are by various interest groups. And some, I just don't know who they're by."

But Bent says he does know one thing: "Phar- maceutical corporations are on a bandwagon whose time has come." In an era of pro-streamlining, anti-regulatory, pro-corporate sentiment, Bent predicts, pharmaceutical and biotech companies stand to win or gain ground in many regulatory battles with various government agencies.

The new year offers plenty of issues. As 1996 begins, companies are poised to stake patent turf, forge new regulatory terrain, and further whittle FDA controls on drug development. The companies that win these debates will be in a position to offer scientists more R&D funding and a quicker pipeline for product development, according to industry executives.

One of the first regulatory issues of the year is also one of the most divisive: patents. On February 27, Sen. Orrin Hatch (R-Utah) will convene a congressional hearing to consider the raging debate over last year's extension of drug patents.

The controversy began in 1994, when legislation enacting the General Agreement on Tariffs and Trade (GATT) extended name-brand drug patents to 20 years from the date of filing. Previously, domestic drug patents expired 17 years after being issued (L. Katterman, The Scientist, Sept. 4, 1995, page 1). The 20-year patent is standard in most industrialized countries.

Effective since June 1995, GATT potentially offers up to three years of extended patent protection to drug makers. That's good news for name-brand manufacturers, who stand to profit from their one-of-a-kind drugs. It's bad news for generic drug makers, who must wait for a name-brand drug's patent to expire before releasing a generic equivalent.

Adding insult to injury for the generic drug manufacturers, GATT's transition provision allows generic manufacturers in other industries, such as computers, to go ahead with new products that were expected to be released after the current 17-year patent life ended. But the provisions say nothing about releasing generic drugs already under development.

Some lawmakers suggest GATT drafters accidentally overlooked generic drugs, providing name-brand drug makers with a lucrative loophole-an expanded window of time without generic competition. Legislators could close that loophole with a new bill releasing generic drugs under development at the time of GATT's enactment. At press time, Sen. David Pryor (D-Ark.) hoped to introduce such a bill.

However, William Haddad, chief executive officer of MIR Pharmaceutical Inc. of Brewster, N.Y., and head of the international committee of the Generic Pharmaceutical Industry Association (GPIA) in Washington, D.C., believes pharmaceutical lobbyists convinced legislators to leave generic drug competition out of GATT's transition clause.

"It is unconscionable," declares Haddad. "Lobbyists for the drug companies are like kids who keep pushing the extremes to see what they can get away with. It's going to cost consumers billions in windfall profits to these companies."

One company at the center of the debate is Glaxo Wellcome Inc. of Research Triangle Park, N.C. Under the old law, the patent for Glaxo's bestselling ulcer drug, Zantac, would have expired in December. With GATT's transition provisions, Zantac's patent now ends in July 1997-a 19-month extension that probably will net the company billions of dollars. For the year ending June 30, 1995, Zantac sales totaled $2.1 billion.

Glaxo spokesman Rick Sluder is quick to note that about 15 percent of the company's profits are plowed back into research and development. In 1995, Glaxo spent $1.9 billion on R&D. Sluder argues that more patent-generated profit for Glaxo means more money spent investigating new therapies.

"I would suggest that you look at what's really in the long-term interest of consumers," Sluder says. "Is that imitation drugs from the generic industry or innovation- funded by investment-from the research-based industry?"

But long-term interests are irrelevant if a consumer can't afford name-brand medication in the first place, counters Larry Sasich, a research analyst with Public Citizen, a consumer watchdog group in Washington, D.C.

"Despite the company line, high prices just aren't a total benefit for society," Sasich says. "If people can't afford to get the medication that results from so-called innovation, then what's the point?"

Haddad notes that sick people aren't the only ones paying high prices for brand-name drugs-taxpayers fund Medicaid and other subsidized insurance. "Patent extension will be a major issue in 1996," Haddad predicts.

While generic and name-brand drug companies battle over patents, clinical scientists are wandering into new regulatory terrain. In gene therapy, researchers snipping and splicing bits of viral vectors will soon find themselves with novel combinations of agents that require FDA approval, according to Douglas Jolly, vice president of scientific affairs at Chiron Viagene Inc. in San Diego, which is conducting a number of gene therapy trials to treat HIV (K.S. Brown, The Scientist, Nov. 13, 1995, page 1).

Douglas Jolly NEW-WAVE QUESTIONS: Chiron Viagene vice president Douglas Jolly notes that therapies that combine vectors create a conundrum over proper regulatory procedures. "Working with drugs in the past, like cancer drugs, agents have been approved individually, and physicians have then used them in combination," Jolly explains. "But with gene therapy and the new biologics, you may want to use two agents that, by themselves, are not that good. Getting approval for either one would be difficult. But together, they are efficacious. Going about that combination is a real regulatory puzzle."

One gene therapy example involves so-called suicide genes. These genes produce enzymes that become toxic when exposed to a certain drug. For instance, researchers hope to insert a thymidine kinase enzyme-producing gene into a patient's tumor cells. They will then give the patient the drug ganciclovir, which should disable the kinase enzyme-and the tumor cell that contains it.

From a regulatory standpoint, that much is fairly clear, Jolly says. But in fighting cancer, the suicide gene approach might work best if combined with doses of a gene for a disease-fighting protein like gamma interferon, which also would be shuttled into cells via a gene therapy vector.

"So do you have to test each vector individually, or can you put both genes in the same vector?" Jolly asks. "And are those two entities or not? We're going to see more and more of these [questions] as people try to combine therapies that are not separately approved because they may be much more efficacious."

Another emerging field with regulatory questions is that of DNA vaccines, or immunization with plasmid DNA encoding the antigens to be expressed. Typical vaccines simply provide a subunit of a protein. The DNA variety instead provides the gene encoding that protein. Regulators will have to address the safety of, and protocols behind, injecting actual DNA. This spring, a conference on DNA vaccines sponsored in part by the World Health Organization will devote a day to regulatory issues.

Generic versions of biotechnology products also may be on the regulatory horizon. For example, Haddad says, generic companies soon hope to offer an FDA-certified clone of a hormone at a low price. "But the FDA has no methodology for approving such a biologically based generic biotech product," Haddad says. "That is a big regulatory wall that someone will have to deal with."

One regulatory conversation likely to continue in 1996 is the debate over perhaps the most disastrous drug trials in recent history, on fialuridine (FIAU), an experimental hepatitis B drug that was briefly manufactured by Oclassen Pharmaceuticals Inc. of San Rafael, Calif., and Eli Lilly and Co. of Indianapolis.

FIAU is a nucleoside analog, or a drug that biochemically resembles one of DNA's building blocks. FIAU is a chemical cousin to AZT, the prominent AIDS drug, as well as several other antiviral drugs.

Three years ago, clinical trials of FIAU at the National Institutes of Health were abruptly halted as patients began to show signs of liver failure and lactic acidosis, or excess levels of lactic acid in their bodies. Even after treatment with FIAU stopped, five of the patients died, apparently from excess lactate that overwhelmed their organs. Two more patients survived with liver transplants.

FIAU's deadliness was not immediately apparent because the drug first silently induced the synthesis of defective genes in the mitochondrion, the cell's energy-producing organelle. Only when the damage reached a critical mass did the mitochondria fail, prompting cells to begin anaerobic energy production and generate huge amounts of lactic acid. The delayed toxic effect was relentless, quickly killing patients despite attempted intervention.

After the FIAU trial, an FDA task force released a critical report claiming that NIH investigators failed to spot and interpret clear signs of FIAU toxicity ("Fialuridine: hepatic and pancreatic toxicity," Nov. 12, 1993). The agency suggested that new clinical-trial guidelines might prevent delayed toxicity in patients trying other nucleoside analogs.

A separate Institute of Medicine (IoM) report, while less critical, recommended more careful toxicity monitoring of nucleoside-like drugs (F.J. Manning, M. Swartz, eds., Review of the Fialuridine [FIAU] Clinical Trials, Washington D.C., National Academy Press, 1995).

Today, FDA guidelines are still under consideration, notes Leland Pierce, an FIAU task force member and medical officer in FDA's Office of Scientific Investigation. "The agency is exploring a lot of different options," Pierce says. "We can't really disclose our options just yet."

For their part, nucleoside analog manufacturers Bristol-Myers Squibb Co. of New York and Glaxo Wellcome both say they have conducted extensive tests for adverse effects. No other recent illnesses due to drug-induced mitochondrial injury have been reported.

Lisa Dunkle NUCLEOSIDE ANALOGS: Lisa Dunkle of Bristol-Myers Squibb believes that more FDA guidelines on such drugs would not be helpful. "We did a thorough search of our safety database with nucleoside analogs, which includes tens of thousands of patients," says Lisa Dunkle, executive director of HIV clinical research at Bristol-Myers Squibb, which has two nucleoside analogs on the market and two more under development. "We also carefully examined our procedures for following patients." Dunkle states that the company did not find any problems and is comfortable with its follow-up procedures.

At this point, Dunkle asserts, "across-the-board mandates of unfiltered information" in the form of FDA guidelines would not be helpful.

In an October editorial accompanying a report on the NIH trial, Morton Swartz, an infectious disease specialist at Harvard University, urged companies to implement pre-clinical and clinical procedures to avoid similar delayed toxicity (M.N. Swartz, New England Journal of Medicine, 333:1146-8, 1995).

"The chaos [of the fallout over FIAU] could impact those companies exploring new drugs similar to FIAU," Swartz says. "It certainly would be prudent to follow patients longer than usual."

The best regulatory news of 1996 for drug and biotech companies could be the prospect of less FDA oversight. In particular, some industry representatives think the agency might relinquish partial control over early-phase clinical research.

Christine Carrico HOPING FOR LESS: AAPS's Christine Carrico says a lot of FDA Phase I regulation "doesn't need to be conducted because of internal controls." "One thing that's going to be discussed this year is the FDA's regulation of Phase I clinical trials," says Christine Carrico, director of scientific affairs for the American Association of Pharmaceutical Scientists (AAPS) in Alexandria, Va. "There's a lot of regulation at this stage that doesn't need to be conducted because of internal controls."

Michael Murphy, editor of the California Technology Stock Letter, agrees. "I think you could see a move toward peer review of early clinical trials," Murphy says. Such review would ease FDA's regulatory load without compromising clinical standards, he says. "It doesn't take the final power away from the FDA, and yet it reduces their cost and hassle."

Stanley Crooke A MODEST PROPOSAL: Company CEO Stanley Crooke wants a new drug-development agency established. But others want more. Asking FDA to get out of early-phase research is "like putting a Band-Aid on a system that's decrepit," declares Stanley Crooke, chief executive officer of Isis Pharmaceuticals Inc. of Carlsbad, Calif. "The industry organizations have adopted the attitude that we'll take what we can get. The issue is not just Phase I or Phase II. The issue is how to more effectively ensure the drug-development process."

Crooke lambastes FDA-monitored drug development as too long, complicated, and expensive. As a solution, Crooke, among others, has proposed a new agency devoted solely to drug development (S.T. Crooke, Bio/Technology, 13:25-29, 1995). Working closely with companies throughout drug development, the agency could offer automatic drug approval based on its knowledge of the product. This shortcut would shave months off a drug's approval time, according to Crooke.

"The central issue is what constitutes meaningful reform of the regulatory process," Crooke says. "It boils down to a change in the charter, a complete overhaul."

Much as Crooke might like to overhaul FDA, he and others agree that a total agency facelift isn't likely soon. For one thing, an election year-with various candidates' vague promises of regulatory reform-is commencing. "Until we know who's going to be in the White House, no one is going to talk about an exact regulatory scheme," remarks Bent. "The likelihood of major, definitive action in 1996 is low."

That likelihood is even lower now that the FDA is basking in the glory of a recent report by the General Accounting Office (GAO). The GAO report suggests FDA already has significantly streamlined its drug approval process (Washington, D.C., U.S. Government Accounting Office, PEMD-96-1, Oct. 20, 1995).

constitutes meaningful reform of the regulatory process. It boils down to . . . a complete overhaul."

According to the report, FDA has cut its new drug approval time in half, from 33 months in 1987 to 19 months in 1992. "There is no drug lag in the U.S.," FDA commissioner David Kessler proudly announced in a December meeting at the Food and Drug Law Institute.

J. Halperin LEGISTLATIVE OUTLOOK: AAPS committee chairman Jerome Halperin thinks Congress will "put into statute what [FDA] is already doing." Companies may be somewhat appeased by this progress, says Jerome Halperin, chairman of AAPS's public policy committee. "If the commissioner did not demonstrate the progress that he has, I think you would have seen some draconian measures [by Congress] to fix the FDA this year," states Halperin. "But now, I think what may come out is simply legislation that puts into statute what the agency is already doing-shorter review times, reduced reporting burdens, and the like."

Alain Schreiber WISH LIST FOR '96: Vical CEO Alain Schreiber would like to see FDA continuing to discard "hundreds of antiquated regulations." Still, that itself is enough to generate some new year cheer. "Hopefully, the agency will continue throwing out hundreds of antiquated regulations," comments Alain Schreiber, chief executive officer at Vical Inc. in San Diego, a publicly owned gene-therapy company. "That's a change that I, for one, look forward to."

Kathryn S. Brown is a freelance science writer based in Columbia, Mo.