Clinical Trials of Primary Care Drugs: Could Smaller Be Better?

Cross-Posted at Bill of Health

Lately it seems that each passing day brings another article about the cost of orphan drugs.  Earlier this week at FiercePharma, Tracy Staton reported that the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) has asked Alexion Pharmaceuticals to justify the price of its drug Soliris which is, per Staton, “the most expensive drug in the world” at around $569,000 a year.  Specifically, NICE seeks “‘clarification from the company on aspects of the manufacturing, research and development costs’” of the drug.  According to Staton, this latest development in a review process characterized by “halting progress” is “a departure from NICE’s usual calculations, which typically focus on quality-of-life years and the like.”

Pushback by NICE and other payers notwithstanding, the orphan drug market is growing.  As I blogged about here, in 2013 EvaluatePharma estimated that “the worldwide orphan drug market is set to grow to $127 [billion], a compound annual growth rate of +7.4% per year between 2012 and 2018[,]” which “is double that of the overall prescription drug market, excluding generics, which is set to grow at +3.7% per year.”  In a recent article in the New England Journal of Medicine, venture-capital investors Robert Kocher and Bryan Roberts note that “more than half of the 139 drugs approved by the FDA since 2009 are for orphan diseases” and suggest that there is a risk of “systematically underinvesting in other important areas of medicine.”

Kocher and Roberts’ explain that one reason that orphan drugs attract investment is that their development costs are low.  The problem or potential problem of underinvestment in diseases like depression and diabetes could therefore be addressed, they contend, by bringing the cost of developing treatments for these common conditions in line with the cost of developing treatments for rare diseases.  And, they argue, one promising approach to doing so is to reduce clinical trial costs by reducing the size of clinical trials.  In the report I cited above, EvaluatePharma estimated that for orphan drugs regulators require a median phase III trial size of 528 patients, at an estimated average cost of $85 million, whereas for non-orphan drugs they require 2,234 patients, at an estimated average cost of $186 million.

Kocher and Roberts believe that “most clinical development programs go far past the point of diminishing returns for frequent safety events, but they do not go far enough to permit detection of rare events.”  They therefore advocate for a package of reforms, including (1) “[r]edesigning trials to include fewer patients,” (2) “providing conditional approval of drugs,” and (3) “requiring postmarketing surveillance[.]”  The last two proposals are relatively uncontroversial; the first is much more so.  In a 2011 article in JAMA, for example, Aaron Kesselheim and colleagues found that “although both newly approved orphan and nonorphan cancer drugs in [their] sample were tested in relatively small numbers of patients prior to approval,” there was a higher rate of adverse events associated with the orphan drugs, suggesting safety concerns.  Kesselheim and colleagues argued that rather than extending the flexibility on clinical trial size that is currently afforded to orphan drugs, Congress should consider restricting it, to “first-in-class drugs or those that treat a condition for which no other treatments are available[.]”

Legislation or a change in the Food and Drug Administration’s position to allow for an across-the-board reduction in clinical trial size seems highly unlikely.  That said, both Congress and the FDA have demonstrated a willingness to work to reduce development costs, including by allowing for surrogate outcomes where appropriate and by speeding the agency’s approval process.  Moreover, in certain cases, governments have reduced sponsors’ development costs directly.  As Hester Plumridge reported in the Wall Street Journal in January, the “unfavorable economics” of antibiotics development are changing, in part because “[r]esearch funding is beginning to flow[.]”

Monday Morning Recap: The Week (2.24.14-3.2.14) in Drug & Device Law & Policy

What follows is a weekly feature here at Health Reform Watch.  Each Monday, we provide a recap of the drug and device law and policy developments over the previous week that caught our eye and made us think.  Credit for the format goes to Seton Hall Law alum Jordan T. Cohen, who used it to great effect in his series of Reform Rodeo posts.

 1.  First up is a news item that dates from February 21st (no one’s counting, I hope).  Richard Cassin at The FCPA Blog reports that pharmaceutical company Baxter International received a much-prized “double declination”, that is, notices from both the Department of Justice and the Securities and Exchange Commission that they have closed their investigations of alleged Foreign Corrupt Practices Act violations at Baxter and will take no further action.

2. At the FDA Law Blog, JP Ellison summarizes the Solicitor General’s brief in Nathan v. Takeda, a False Claims Act decision out of the Fourth Circuit which the Supreme Court is considering for review.  The relator in the case is a pharmaceutical sales representative who alleged that his employer engaged in a fraudulent scheme to promote one of its drugs off-label.  As Ellison explains, the legal issue in the case is whether a qui tam relator has to allege “‘that specific false claims actually were presented to the government for payment’ … Company sales representatives are typically quite familiar with company marketing practices, but usually have little or no knowledge regarding the submission of any actual claims for reimbursement submitted by healthcare providers so the stakes in this debate are significant.”

3. Another False Claims Act decision out of the Fourth Circuit that made the news this week and last is United States ex rel. Rostholder v. Omnicare, Inc.  As Reed Smith’s Larry Sher, who was part of the team representing Omnicare in the case, explains, “[t]he Rostholder court held that because compliance with the Food and Drug Administration’s (FDA) Current Good Manufacturing Practices (cGMP) regulations is not a precondition for reimbursement under Medicare and Medicaid, violations of the cGMP regulations by themselves cannot form the basis for False Claims FCA claims.”  Per Sher, in so doing, “the Fourth Circuit confirmed that the FCA is meant to combat fraud and is not a ‘sweeping’ catch-all mechanism to address all regulatory violations in the absence of actual fraud.”

4.  Those who have not been following the Trans Pacific Partnership negotiations over intellectual property rights to pharmaceuticals may find interesting these two opposing opinion pieces from last week and this week–Intellectual property is what drives biotech innovation and Getting the balance right on medical patents.

5. Finally, at Fierce Pharma, Tracy Staton reports that oral argument before the Arkansas Supreme Court was set for Thursday, February 27th in a closely-watched case in which a jury found “that [Johnson & Johnson] and its Janssen Pharmaceuticals unit soft-pedaled the risks of Risperdal, an antipsychotic drug, and misled doctors about its benefits” and “[a] judge fined the company a total of $1.2 billion.” According to Staton: “In appealing the Arkansas decision, J&J cited laws against excessive fines, and it’s apparently planning to use a free-speech argument before the state’s top court. Arkansas Attorney General Dustin McDaniel has pooh-poohed that argument. The AGs of 35 other states have thrown their weight behind the verdict, by filing a brief urging the court to uphold the verdict. Other friend-of-the-court briefs include those filed by AARP and former FDA Commissioner Donald Kennedy.”

Seton Hall Law Places First at UM Carey Law’s Health Law Regulatory and Compliance Competition

At Seton Hall Law’s website, Victoria Dorum reports that Seton Hall Law students Lindsey Borgeson, Joyce Crawford, and Phillip DeFedele (pictured above, from left), along with alternate Cynthia Frumanek, recently came in first at the University of Maryland Francis King Carey School of Law’s Health Law Regulatory and Compliance Competition.

Dorum writes:

Not only did the team members distinguish themselves among other top schools, they also made a profound impression on the judges. Virginia Rowthorn, Managing Director of the Law & Health Care Program at the University of Maryland School of Law, wrote a note to [Seton Hall Law Professor Tara Adams Ragone] to  commend the team and their teachers for the team’s excellent presentation. She wrote, “One of the judges who heard them told me they knocked it out of the ballpark with their knowledge, and also with the professional way they presented their ‘case’.”

Read Dorum’s full article on the Health Law Regulatory and Compliance Competition here; UM Carey Law’s coverage is here.

This has been a great academic year for Seton Hall Law, which also won the National Health Law Moot Court Competition in November.   Dorum covered that victory as well, here.

Professional Licensing Boards and Antitrust Liability

Cross-Posted at Bill of Health

Should state professional boards, which regulate a growing and diverse array of professions and often are composed of professionals from the regulated community, be immune from federal antitrust liability if they engage in anticompetitive conduct?  The Federal Trade Commission thinks not in all cases, the Fourth Circuit agreed, and the North Carolina Board of Dental Examiners has asked the United States Supreme Court to review this decision.

Sasha Volokh recently devoted a 5-part series of blog posts to the major legal issues in play in this case.  He provides an overview of the antitrust state action immunity doctrine here, summarizes the facts underlying the case, North Carolina Board of Dental Examiners v. FTC, here, outlines the differing tests used in the circuits when applying the state action immunity doctrine to professional boards here, offers his opinion on how the Supreme Court ought to resolve these conflicts here (he leans towards the Fourth Circuit’s analysis), and suggests a possible way for the Board to work around the FTC’s injunction (by simply rephrasing its letters to threaten litigation) here.  Sasha’s posts provide an accessible and helpful primer on the case and relevant antitrust case law and are worth a read.

While we wait to learn if the Supreme Court will review this case, Professors Aaron Edlin and Rebecca Haw tackle the question of whether the actions of state professional licensing boards should be subject to antitrust scrutiny in their article, “Cartels by Another Name: Should Licensed Occupations Face Antitrust Scrutiny?” (available on SSRN and forthcoming in the University of Pennsylvania Law Review).  Although they use a question mark in their title, their characterization of licensing boards as cartels is a powerful tipoff to their ultimate conclusion – that licensing boards composed primarily of competitors regulating their own profession should not escape antitrust review: Read more

Monday Morning Recap: The Week (2.17.14-2.23.14)) in Drug & Device Law & Policy

What follows is a weekly feature here at Health Reform Watch.  Each Monday, we provide a recap of the drug and device law and policy developments over the previous week that caught our eye and made us think.  Credit for the format goes to Seton Hall Law alum Jordan T. Cohen, who used it to great effect in his series of Reform Rodeo posts.

1. Earlier this month, the Food and Drug Administration announced that it had approved Vimizim (elosulfase alfa), which treats Mucopolysaccharidosis Type IVA (Morquio A syndrome) and which “is also the first drug to receive the Rare Pediatric Disease Priority Review Voucher - a provision that aims to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases.”  I blogged about the expansion of the PRV program to rare pediatric diseases in 2012, here.  Kurt Karst offers helpful context for the Vimizim approval here, while Ron Leuty reports here that Vimizim will cost $380,000 a year, a price its manufacturer said was “consistent with other enzyme replacement therapies.”

2. Also on the subject of the cost of specialty drugs, Avalere Health issued a report this week on the specialty drug benefit provided by health insurance plans sold through the new health insurance exchanges.  Per Dan Mendelson, Avalere Health’s CEO: “Health plans operating in the exchanges are using significant cost-sharing to meet actuarial values set forth in the law and limit premium costs. However, these formulary designs often result in high costs for patients with chronic illness who need biologics and other products on the specialty tier[.]  Tracking these patients to ensure that they are getting appropriate care is a critical quality need.”

3.  Also this week, the FDA requested comment on a proposed study that “will investigate the impact of limiting the risks presented in [direct-to-consumer (DTC)] prescription drug television ads to those that are serious and actionable, and including a disclosure to alert consumers that there are other product risks not disclosed in the ad.”

4. And the FDA announced that it will hold a public hearing “to obtain information and comments from the public on the strengths and weaknesses of the current [Over-The-Counter] Monograph Process, and to obtain and discuss ideas about modifications or alternatives to this process.”  The FDA writes: “We believe that the biggest challenges of the current system are: [(1)] the large number of products marketed under the OTC Drug Review for which there are not yet final monographs, [(2)] limitations on FDA’s ability to require, for example, new warnings or other labeling changes to address emerging safety or effectiveness issues for products marketed under the OTC Drug Review in a timely and effective manner, and [(3)] the inability of the OTC Drug Review to easily accommodate innovative changes to products regulated under the OTC Drug Review.”

5. Finally, at the Boston Globe Tracy Jan reports on the debate over whether generic painkillers should be required to be abuse-resistant.  Jan writes:  “The pharmaceutical industry has developed pills that are strongly resistant to being crushed — and are therefore difficult for addicts to abuse. But industry profit margins, battles over patents, caution over a still-emerging technology, and a ponderous federal bureaucracy have kept such abuse-resistant pills from widespread adoption in the market.”

Next Page »