Evolution along the Government - Governance Continuum: FDA's orphan products and fast track programs as exemplars of "what works" for innovation and regulation

Food and Drug Law Journal

Volumn 64, Issue 4, 2009, Pages 733-754

  Milne, Christopher Paul ^a   Tait, Joyce ^b,c  

^a TUFTS UNIVERSITY SCHOOL OF MEDICINE   (United States)

^b ESRC Centre for Economic and Social Research on Innovation in Genomics   (United Kingdom)

^c UNIVERSITY OF EDINBURGH   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

ORPHAN DRUG; RECOMBINANT ERYTHROPOIETIN;

AUTOREGULATION; BIOMEDICINE; CONSULTATION; DRUG APPROVAL; DRUG INDUSTRY; DRUG MARKETING; DRUG SAFETY; FOOD AND DRUG ADMINISTRATION; GOVERNMENT; HEALTH CARE; HEALTH CARE POLICY; LAW; PHILOSOPHY; PROBLEM SOLVING; PROGRAM DEVELOPMENT; REIMBURSEMENT; REVIEW;

EID: 73949116749     PISSN: 1064590X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (106)

1. See generally THE LIMITS TO GOVERNANCE. THE CHALLENGE OF POLICY-MAKING FOR THE NEW LIFE SCIENCES, Chapter 1, (Catherine Lyall, Theo Papiaoannou & James Smith eds., Ashgate Publishing (2009) (in press) [hereinafter LIMITS TO GOVERNANCE].
2. See generally Tait, Joyce, Chataway, Joanna & Wield, David, Governance, Policy and Industry Strategies: Pharmaceuticals and Agro-biotechnology, at 378-401, KNOWLEDGE ACCUMULATION AND INDUSTRY EVOLUTION: THE CASE OF PHARMA-BIOTECH (Mariana Mazzucato, Giovani Dosi eds., Cambridge UP, (2006).
3. Id. at 379.
4. NEW MODES OF GOVERNANCE. DEVELOPING AN INTEGRATED POLICY APPROACH TO SCIENCE, TECHNOLOGY, RISK, AND THE ENVIRONMENT at 48 (Catherine Lyall & Joyce Tait eds., Ashgate Publishing) (2005), [hereinafter NEW MODES OF GOVERNANCE] (from the chapter by Spinardi, G. & Williams, R. on The Governance Challenges of Breakthrough Science and Technology).
5. Id.
6. Chataway, Joanna, Tait, Joyce & Wield, David, The Governance of Agro-and Pharmaceutical Biotechnology Innovation: Public Policy and Industrial Strategy, 18 TECH. ANAL. & STRAT. MGMT. 169, 172-173 (2006).
7. LIMITS TO GOVERNANCE, supra note 1, at xv.
8. Lewis, Graham & Fearn, Carl, article based on presentation at IMS Health Pharma Horizons Seminar, NYC (May 2006), document on file at Tufts CSDD and available upon request.
9. See generally Tait, Joyce, Systemic Interactions in Life Science Innovation, 19 TECH. ANAL. & STRAT. MGMT. 257 (May 2007).
10. See generally, Emerging Research Models for the Delivery of Health Innovation Project (2006), Organization for Economic Cooperation and Development, Working Party on Biotechnology (WPB) and Working Group on Human Health Related Biotechnologies (WG-HHRB).
11. Tait, Joyce, Wield, David, Chataway, Joanna & Bruce, Ann, Health Biotechnology to 2030, Report to OECD International Futures Project, THE BIO-ECONOMY TO 2030: DESIGNING A POLICY AGENDA, Organization for Economic Development and Cooperation (OECD), Paris, (2008), 51, available at http://www.oecd.org/dataoecd/12/10/ 40922867.pdf.
12. LIMITS TO GOVERNANCE, supra note 1, at 2.
13. Id. at 4.
14. Id. at Foreword.
15. See generally Lyall, Catherine, Governing Genomics: New Governance Tools for New Technologies?, 19 TECH. ANAL. & STRAT. MGMT, 365 (2007).
16. Castell, Bill, The Next Generation of Health Care, WALL ST. J., (July 12, 2005) at B2.
17. Truelove, Christiane, Belt tightens on big pharma: 21st Annual Report, Top 50 Pharma, MED AD NEWS, (Sept. 2007), at 4-22.
18. Milne, Christopher-Paul, Getting from Challenge to Change in the R&D of New Drugs, [presentation] NPAF Policy Forum, Wash., DC, (Dec. 8, 2008).
19. Milne, Christopher-Paul, Kaitin, Kenneth I., & Ronchii, Elettra, Orphan Drug Laws in Europe and the U.S. Incentives for the Research and Development of Medicines for the Diseases of Poverty, Report to Commission on Macroeconomics and Health, CMH Working Paper Series (2001), Paper No. WG2: 8, at 9-10, available at http://www.whoindia.org/EIP/CMH-Report/ CMH%20Papers/02-08.pdf.
20. Pub. L. No. 97-414, 96 Stat. 2049 (1983), amending sections 525 through 529 of the FDCA, 21 U.S.C.§§ 360aa-360ee (1983 Supp.) and section 227 of the PHSA, 42 U.S.C.§ 236 (1983 Supp.), and the Internal Revenue Code, 26 U.S.C.§ 28 (1983 Supp.). The term "orphan drug" reflected the fact that no company would be interested in commercializing medicines for such small patient populations, due to the inability of the firm to achieve a reasonable return on investment. The current eligibility requirements for orphan drug designation are that a drug must affect less than 200,000 people in the United States, or if it affects more than 200,000 people, that there is no reasonable expectation that the costs of development and production will be recovered by sales (Source: Website, FDA Office of Orphan Product Development (OOPD)).
21. The first incentive is technical and administrative assistance with the identification and development of orphan products provided directly by the FDA's OOPD, which consists of a staff of approximately 25 scientists and administrators. Specific protocol assistance concerning what studies the sponsor needs to complete in order to obtain regulatory approval is available from FDA reviewing divisions. The OOPD monitors the review process and assists in resolving specific issues that may arise. The second incentive is the availability of FDA grants to cover clinical trial expenses. Grants for total costs (direct and indirect) are limited to $200,000 per year for smaller Phase I, II or III studies, and up to $400,000 per year for Phase II or III studies. The third incentive is that user fees, such as registration fees paid to FDA by a sponsor for review of a marketing application ($1,178,000), are automatically waived. The FDA Amendments Act of 2007 ( FDAAA), P.L. 110-185, (enacted Sept. 27, 2007), has recently expanded the waiver to include product ($65,030) and establishment fees ($392,700). The fourth incentive is the availability of tax credits, which can be subtracted from the company's tax payment. These credits can be for as much as 50 percent of clinical development costs. The tax credits can be carried forward for 15 years or backward for 3 years. The fifth incentive, so-called orphan exclusivity, prohibits FDA from approving a marketing application for the same drug that treats the same condition or illness for seven years from the date of approval of the first orphan application, even in the absence of a patent. (Source: Website, FDA OOPD; figures for FY 2009 grant applications).
22. The first of these was initiated in 1988, still early in the AIDS epidemic when there was a rush to develop the first generation of anti-retrovirals. It was called simply Subpart E after its place in the text of the code of federal regulations. It still exists, but the procedures to expedite development have largely been subsumed into the fast track program. In 1992, in response to what AIDS advocates considered an unacceptably high regulatory burden for the anti-AIDS drug, AZT, FDA allowed accelerated approvals based on surrogate endpoints as evidence of effectiveness. In the mid-1990s, FDA also initiated an informal policy allowing for rolling submission of parts of a new drug application before the entire application was submitted. Theoretically, this would allow sponsors to benefit from FDA taking a "sneak peak" at sections of the application and possibly providing the sponsors advance notice of problems.
23. Pub. L. No. 105-115, 111 Stat. 2296, amending the FDCA, 21 U.S.C.§§ 301-392 (Supp. 1997), (FDAMA also encompassed the 2nd reauthorisation of the Prescription Drug User Fee Act (PDUFA), P.L. 102-571, (enacted Oct. 29, 1992), which must be renewed every five years).
24. Section 112 of FDAMA, P.L. 105-115, amended FDCA by creating section 506, Fast Track Products, 21 U.S.C.§ 351 et seq. Briefly, these four programs consist of: 1) Meetings - the meetings program focuses on regular, appropriately timed consultations between the agency and the fast track designee, especially at critical junctures during the drug development process; 2) Written correspondence - written correspondence consists not only of the information provided to FDA by the sponsor, but also the timely comments provided by FDA on the design of the principal trials and the adequacy of the sponsor's Phase II or III development plans; 3) Review programs - review programs refer to the opportunity for priority review of the new drug application (NDA) or biologics license application (BLA), a "rolling review" of portions of a marketing application before the full NDA/BLA is submitted, and accelerated approval; and 4) Dispute Resolution - dispute resolution means that FDA determinations made under the fast track program may be appealed at a level beyond the reviewing division/office, if need be (FDA, (1998)).
25. Pub. L. No. 110-185, 121 Stat. 823 (FDAAA, and incorporating the 4th iteration of PDU-FA).
26. FDA's fast track program results in 62 percent approval rate after first 3 years, Tufts Center for the Study of Drug Development Impact Report, (Jan./Feb., 2001) (Kenneth I. Kaitin ed.), available at http://csdd.tufts.edu.
27. LIMITS TO GOVERNANCE, supra note 1, at 115.
28. Grabowski, Henry G., R&D Costs and Revenues and the Development of New Vaccines [presentation], Univ. of Chicago Conference on Vaccines, (May 13, 2005); Grace, Cheri, Developing New Technologies to Address Neglected Diseases: The Role of PDPs and AMCs, [presentation], DFID Health Resource Center, (Sept. 2006), available at http://www.dfidhealthrc.org/ publications/PDPs-and-AMCs-presentation-06.pdf.
29. NEW MODES OF GOVERNANCE, supra note 4, at 180.
30. Id.
31. LIMITS TO GOVERNANCE, supra note 1, at 11.
32. Id. at 113.
33. See generally Peabody, J. Ruby, W., A. & Cannon, P., The economics of orphan drug policy in the US. Can the legislation be improved? 8, PHARMACOECONOMICS 374-384 (Nov 1995).
34. Orphan Drug Amendments of 1992: Report from the Committee on Labor and Human Resources, Report 102-358, United States Senate, 102d Congress 2d Session, (U.S. GPO: Wash., DC, (1992)).
35. OOPD, FDA website, available at http://www.fda.gov/orphan/.
36. LIMITS TO GOVERNANCE, supra note 1, at 115.
37. Milne et al., supra note 19, at 8.
38. Shiragami, M. & Nakai, K., Development of orphan drugs in Japan: characteristics of orphan drugs in Japan, 34 DRUG INF. J 839, 840 (2000).
39. Orphan Medicinal Products, EMEA website, available at http://www.emea.europa.eu/htms/humans/orphans/intro.htm; RDTF website, http://www.rdtf.org/testor/cgi-bin/OTmain.php.
40. LIMITS TO GOVERNANCE, supra note 1, at 116.
41. Thaul, Susan, FDA Fast Track and Priority Review Programs, CRS Report for Congress, #RS22814, (2008), (Priority Review is a status assigned to drugs in the review queue by FDA, when they are considered to be advances over currently available treatments, prophylactics or diagnostics. Standard review is the term applied to all other products).
42. DiMasi, Joseph A. & Faden, Laura, Factors Associated with Multiple FDA Review Cycles and Approval Phase Times, 45 DRUG INF. J., 201, 205 (2009).
43. Reichert, Janice M., Rochon, Stepahnie L. & Zhang, Bodi D., Finding Value in the US Food and Drug Administration's Fast Track Program, 22 DRUG NEWS & PERSPECTIVE 53, 56 (Jan/Feb 2009).
44. Ropars, Anne-Laurie & Moran, Mary, Fast Track Options as a Fundraising Mechanism to Support R&D into Neglected Diseases, Pharmaceutical R&D Policy Project, London School of Economics (Jan 2005), at 9, available at http://www.who.int/intellectualproperty/submissions/ Mary.Moran2.pdf.
45. DiMasi, Joseph A. & Manocchia, Michael, Initiatives to speed new drug development and regulatory review: the impact of FDA-sponsor conferences, 31 DRUG INFO. J. 771, 781 (1997).
46. Independent Evaluation of FDA's First Cycle Review Performance - Retrospective Analysis Final Report, [hereinafter Booz Allen Report] report by Booz Allen Hamilton Inc., prepared for FDA under Contract No. 223-04-8100, Task No. T1 (2006), at 13.
47. Milne, Christopher-Paul & Bergman, Elaine, Fast Track Designation under Food and Drug Modernization Act: The Industry Experience, 35 DRUG INFO. J. 71, 79 (2001).
48. Fast Track Program Firmly Established in U.S. Drug Development Landscape, Tufts Center for the Study of Drug Development Impact Report, Kenneth I Kaitin ed. (Mar./Apr. 2006).
49. Milne, Christopher-Paul, Fast Track, Pediatric, Orphan and Global Diseases R&D [presentation], Postgraduate Health Care Research course, Tufts University (Fall 2007).
50. Ropars & Moran, supra note 44, at 9.
51. BOOZ ALLEN REPORT, supra note 46, at 8.
52. DiMasi & Faden, supra note 42, at 222.
53. Breakthrough innovation in this context refers to the development of "new" drugs and biologicals, referred to here as NMEs, a term used by FDA to describe compounds that have never been approved before in the U.S., and SBs, a term coined by Tufts CSDD to describe new biological compounds that are significantly different from what's currently available on the market. NMEs and SBs are typically considered more challenging and costly to develop than products derived by incremental innovation, i.e., improving upon already-approved products with different indications, dosage forms, etc.
54. LIMITS TO GOVERNANCE, supra note 1, at 118-119.
55. BOOZ ALLEN REPORT, supra note 46, at iii.
56. Shiragami & Nakai, supra note 38, at 843-845.
57. Developing Orphan Products: FDA and Rare Disease Day, FDA Consumer Updates website, available at http://www.fda.gov/ForConsumers/ ConsumerUpdates/ucm107293.htm.
58. The initial survey was in the winter of 2002-2003, and consisted of 38 questions delivered by fax and e-mail. The sample universe was comprised of all 117 recipients of FDA orphan product grants from 1991-1998. The response rate was 62 percent (72/117). This time period was selected to provide a large enough sample for analysis without depressing compliance rates by going back too far. However, because of the long timeframes associated with orphan product R&D, the last year included in the cohort were grants awarded in 1998. A shorter follow-up survey of 66 grantees, who had already answered the 2002 survey (6 were lost to follow-up), was conducted in fall 2005. Of the 66 grantees, 59 responded (89 percent). Thus, grant programs had a minimum follow-up period of 8 years and a maximum of 15 years).
59. Large pharma success rate for drugs entering clinical trials in 1993-04: 16 percent, Tufts CSDD Impact Report, (July/Aug. 2009) (Kenneth I Kaitin ed.), available at http://csdd.tufts.edu.
60. LIMITS TO GOVERNANCE, supra note 1, at 120.
61. Milne & Bergman, supra note 47, at 79.
62. Ropars & Moran, supra note 44, at 10.
63. Cohen, Frederic J., The Fast Track Effect, 3 NATURE REVIEWS/DRUG DISCOVERY 293-294 (2004).
64. LIMITS TO GOVERNANCE, supra note 1, at 118.
65. ODA Amendments 1992, supra note 34.
66. Treatment INDs is a special FDA program allowing companies to provide an experimental drug to a wider number of patients while it is undergoing development, typically during Phase III studies, as long as there is preliminary evidence of drug efficacy and the drug is intended to treat a serious or life-threatening disease (for example, advanced cases of AIDS, herpes simplex encephalitis, and subarachnoid hemorrhage), or if there is no comparable alternative drug or therapy available to treat that stage of the disease in the intended patient population. In addition, these patients are not eligible to be in the definitive clinical trials.
67. Meyers, Abby S., Collaboration Between the Pharmaceutical Industry and Patient Organizations. A Delicate Balance (Speech), International Conference of Rare Diseases and Orphan Drugs, (Feb.17, 2000), (Ms. Meyers has been president of NORD for many years).
68. The Orphan Drug Act Implementation and Impact, Office of the Inspector General (OIG), HHS, (May 2001) (Document # OEI-09-00-00380), at 9-10.
69. Id. at 13.
70. Milne, Christopher-Paul, Orphan Product Grants: Are They Getting the Job Done? [presentation], 2004 Drug Information Association Annual Meeting, Wash., DC. (Outreach to patient advocates was selected by 37 percent of respondents versus the following: 25 percent for publication on FDA website; 19 percent for outreach to specialists; and, 19 percent for publication in general medical information outlets).
71. BOOZ ALLEN REPORT, supra note 46, at iii, 7-8.
72. It should be noted, however, that this refers to evaluation of the Continuous Marketing Application (CMA) pilot program, which was similar to Fast Track, but of a more intensive nature. The pilot program was discontinued.
73. Fred, Sheryl, The Biotech Boom, published online, THE CAPITAL EYE, (July 9, 2003), available at http://www.capitaleye.org/inside.asp?ID=91.
74. FDAMA Section 113: Status Report on Implementation, FDA, (Aug. 2005), available at http://www.fda.gov/oashi/clinicaltrials/section113/ 113report/FDAMASection113Report.pdf. (FDAMA Section 113, Information Program on Clinical Trials for Serious or Life-Threatening Diseases, which amended section 402 of the PHSA, 42 U.S.C.§ 282, is a complementary provision to the Fast Track Products provision of FDAMA, and was responsible for the creation of the clinicaltrials.gov website that subsequently took on a life of its own as a vehicle for greater industry transparency related to clinical trial data reporting).
75. Fast Track Approvals, FDA website, available at http://www.fda.gov/cder/rdmt/internetftap.htm, the tentative approvals occurred from (Jan 24, 2005 to Mar. 13, 2007) under the auspices of the PEPFAR program.
76. Frantz, Simon, Study Reveals Secrets to Faster Drug Development, 5 NATURE REVIEWS DRUG DISCOVERY 883 (Nov. 2006).
77. OOPD Website, supra note 35.
78. See generally Lichtenberg, Frank R. & Waldfogel, Joel, Does Misery Love Company? Evidence from Pharmaceutical Markets Before and After the Orphan Drug Act, (June 2003), National Bureau of Economic Research (NBER) Working Paper No. W9750, and paper summary on NBER website, New Drugs and Increased Longevity, available at http://www.nber.org/digest/dec03/w9750. html.
79. Milne et al., supra note 19, at 19.
80. Haffner, Marlene E., Applications of the Orphan Drug Act to Special Patient Populations, 28 DRUG INFO. J. 495, 497 (1994).
81. Milne & Bergman, supra note 47, at 77.
82. Tufts CSDD 2006, supra note 48.
83. LIMITS TO GOVERNANCE, supra note 1, at 123.
84. Id. (black box warning, also sometimes called a black label warning or boxed warning, is a type of warning whose text appears on the drug's package insert surrounded by a black box; when such a warning is required by FDA, it indicates that the drug carries a significant risk of serious or even life-threatening adverse effects).
85. Based on new drugs and biologicals (i.e., NMEs and SBs) approved from 1998 to 2005, a period of time that coincides with years when both programs were operational and that allows sufficient time for safety hazards to have been identified which typically takes a minimum of two years on the market.
86. LIMITS TO GOVERNANCE, supra note 1, at 123.
87. Thamer, M., Brennan, N & Semansky, R., A Cross-National Comparison of Orphan Drug Policies: Implications for the U.S. Orphan Drug Act, 23 J. HEALTH POLITICS, POLICY & LAW 265-290 (May 1998).
88. Henry G. Grabowski & John Vernon, The Distribution of Sales Revenues from Pharmaceutical Innovation. 18 PHARMACOECONOMICS 21-32 (Suppl.1, 2000).
89. See generally Peabody et al., note 33.
90. Alex Berenson,, Heart Risk Seen in Drug for Anemia, NEW YORK TIMES, 16 Nov 2006, published online, available at http://www.nytimes.com.
91. Milne et al. 2001, supra note 19, at 23.
92. Shiragami & Nakai, supra note 38, at 842-843.
93. Tait et al., supra note 2, at 391.
94. Olliario, P., Will the Fight Against Tropical Diseases Benefit from Orphan Drug Status?, 2 TROP. MED. & INTERNAT'L HEALTH 113-115 (Feb 1997).
95. Lang, Jean & Wood, Susan C., Development of Orphan Vaccines: An Industry Perspective, 5 EMERGING INF. DIS. 749-756 (Nov-Dec 1999).
96. NEW MODES OF GOVERNANCE, supra note 4, at 47.
97. Moran, Nuala, Public Sector Seeks to Bridge "Valley of Death", 25 NATURE BIOTECHNOLOGY 266 (Mar. 2007).
98. For example, a recent analysis of the potential market for drugs derived from stem cells predicts that gross sales for such therapies in the U.S. alone will increase by 80-fold to over $8 billion over the next 10 years, but that the first wave of such products will utilize adult stem cells rather than embryonic stem cells because they are less controversial and have already been used in R&D for 10-15 years. See Kattan, Anna, Adult stem cells are a promising markets, FORTUNE MAGAZINE, online version, (June 16, 2009), available at http://money.cnn.com/2009/06/16/ technology/adult-stem-cell-therapy.fortune/?postversion=20090616.
99. Chataway et al., supra note 6, at 173-174.
100. LIMITS TO GOVERNANCE, supra note 1, at 127.
101. Mitchell, Steve, Analysis: CROs may prosper under Democrats, UPI HEALTH BUSINESS, (Nov. 16, 2006), available at http://www.upi.com/HealthBusiness; Crabtree, Penni, Good old days gone for biotech, UNION-TRIBUNE, (Nov. 26, 2006), available at http://signonsandiego.printthis.clickability.com; Hirschler, Ben, Big pharma cash keeps biotech on a roll, REUTERS, (Nov. 20, 2006), available at http://today.reuters.com.
102. Chataway et al., supra note 6, at 179-180.
103. Lichtenberg & Waldfogel, supra note 78, at 3.
104. Lassoff, Peter M., Speeding up the Regulatory Process, [presentation] PAREXEL Consulting, 2005.
105. LIMITS TO GOVERNANCE, supra note 1, at 128.
106. Marketing Roundup, 24 MED AD NEWS 8 (Feb. 2005).