Drug Approval Trend at The FDA and Emea

H E A LT H C A R E
Drug Approval Trends at the FDA and

EMEA
Process improvements, heightened scrutiny and industry
response
By Alison Sahoo
Alison Sahoo
Alison Sahoo is a pharmaceutical industry analyst with more than 10 years of
experience researching the development of medicines and medical devices. She holds a
B.S. in Physics from McGill University and an M.B.A. in International Business from
Rutgers University.
Copyright 2008 Business Insights Ltd

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While information, advice or comment is believed to be correct at the time of
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ii
Table of Contents
Drug Approval Trends at the FDA, EMEA
Executive Summary
10
The shifting regulatory landscape
10
Drug approval trends at FDA
11
Drug approval trends at EMEA
12
Industry response
13
Global drug approval trends through 2012
14
Chapter 1
18
Summary
18
Drug usage in the U.S. and Europe
19
New molecular entities
20
Generic drugs
Rising usage of generics
Generic drug application trends
21
21
22
Indication expansions
23
Drug approval issues
26
Ensuring drug safety
27
Safety shortfalls: rising adverse drug reactions

Safety failures: drug withdrawals
The importance of time to market
Impact of cost constraints
29
30
31
34
Conclusion
35
Chapter 2
Drug approval trends at the FDA
38
Summary
38
Drug approval process

Pressure to approve drug candidates
39
42
iii
Future directions in the FDA drug approval process

Evolution of drug safety testing
Pediatric safety testing
43
44
44
48
Future directions in drug safety reviews

Reducing time to market
Fast track approvals
Orphan drug approvals
Decreasing FDA drug approvals
49
50
52
53
54
Future directions in speeding drug approvals
56
Delaying risky applications

Rising data requirements
Case study: hormone replacement therapy
Case study: Galvus
The future for risky drug applications
58
58
59
60
62
Biosimilars
62
The future of biosimilar approvals

Canadian biosimilars legislation
62
63
Rx-to-OTC switches
New OTC drug categories
Antihistamines
Emergency contraceptives
Hyperosmotic laxatives
Ophthalmic allergy medications
Proton pump inhibitors
Weight loss medications
64
66
67
69
71
72
73
75
Switch rejections
Statins
76
77
Future directions in nonprescription drug approvals

Creation of a pharmacist dispensed class
78
79
Marketing withdrawals
80
Application withdrawals
Future directions in marketing and application withdrawals
81
82
Conclusion
82
Chapter 3
Drug approval trends at the

EMEA
86
Summary
86

History of European drug regulation
The formation of the EMEA and the MRP
87
87
88
The EMEA
89
iv
The Mutual Recognition Procedure (MRP)

The National Competent Authorities
The Common Technical Document
Creation of Scientific Advisory Groups
91
93
93
96
97
Future directions in drug safety testing

Accelerated opinions
Pediatric testing exemptions
Decreasing EMEA approvals vs. FDA approvals
Current EMEA approval levels
98
98
100
101
101
104
104

105
106
Biosimilars
New biosimilar guidelines
Future directions in biosimilar approvals
107
107
108
Rx-to-OTC switches
109
110
110
110
112
Conclusion
112
Chapter 4
Industry response
114
Summary
114
Background
115
Improving safety testing

Genomics
Stem cell approaches
Future drug safety testing improvements
115
116
117
118
Raising investment in R&D

Improving R&D productivity
Contract research organizations
Repositioning
118
119
119
121
Future directions in R&D investment
122
Public reporting of clinical study results

United States
Europe
Association of the British Pharmaceutical Industry
123
123
124
125
Future directions in clinical data reporting

Strengthening regulatory processes
Coalition for a Stronger FDA
126
126
126
Future directions in regulatory support
127
Conclusion
128
Chapter 5
Global drug approval trends to

2012
130
Summary
130
Background
131
Trends at the FDA

Focus on drug safety
New technology-based standards for drug application review
Decreasing application review times
Boosting integrity and accountability
132
132
133
135
136
Trends at the EMEA

Product Information Management (PIM) Project
Cooperation with other regulators
Incentives for small drug developers
137
138
139
140
140
Convergence of regulatory approaches
141
143
Conclusion
144
Chapter 6
Appendix
146
Index
146
List of Figures
Figure 1.1:
Figure 1.2:
Figure 1.3:
Figure 2.4:
Figure 3.5:
Figure 3.6:
Figure 3.7:
Drug safety risk spectrum

28
Growth in U.S. reported adverse drug reactions, 1995 - 2007
30
U.S. R&D spending versus new drug approvals, 1995 2007
36
U.S. drug approvals, 1995 - 2007
55
Average number of days for centralized procedure positive opinions, 2004 - 2006 99
Average number of days for orphan drug designation opinions, 2004 - 2006
100
EMEA marketing withdrawals, 2000 - 2007
111
vi
List of Tables
Table 1.1:
Table 1.2:
Table 1.3:
Table 2.4:
Table 2.5:
Table 2.6:
Table 2.7:
Table 2.8:
Table 2.9:
Table 3.10:
Table 4.11:
Table 4.12:
Selected indication expansions for U.S. commercialized drugs, 2002 - 2007

Potential safety risks of popular drug classes
Significant drug discontinuations and affected patient groups, 1997 - 2007
Timeline of key FDA legislations
CDER Advisory Committees, 2008
U.S. New Molecular Entity (NME) Approvals, 2000 - 2007
Key U.S. Rx-to-OTC switches, 1997 - 2007
Key events in the approval of OTC nonsedating antihistamines
Recent withdrawals of U.S. marketing applications, 2002 - 2007
Leading European National Competent Authorities, 2008
U.S. Clinical trials and R&D spending, 2000 - 2007
Selected repositioning specialists
vii
25
29
33
45
48
56
66
69
82
94
118
122
Executive Summary
Executive Summary
In both the U.S. and Europe, the utilization of Rx medicines, including both generic
drugs and new molecular entities, is rising strongly.
Increasing use of medications carries safety risk. Inherent drug risks are generally
related to toxicity and the pharmacokinetic properties of the drug itself.
Drug safety risks run the gamut from minor discomforts such as the nausea
associated with many classes of medications to life-threatening conditions like
increased risk of liver toxicity caused by cholesterol-reducing statins.
Over the past five years, the incidence of adverse drug reactions reported in both
the U.S. and Europe has risen sharply.
Marketing withdrawals may be required for drugs that have been associated with a
significant level of extremely adverse effects. The most significant market
withdrawal to date has been Mercks Vioxx, which was recalled in September 2004
after more than 80m prescriptions had been written for the drug worldwide. The
drug was linked to an increased risk of cardiovascular effects, with one study
showing that patients taking Vioxx were twice as likely to have a heart attack as
those taking naproxen.
Mercks withdrawal of Vioxx has galvanized public scrutiny of drug approval

processes, causing regulators, particularly the FDA, to exercise more caution in
approvals.
As more blockbuster drugs lose patent protection and R&D productivity continues
to decline, minimizing time to market for new drugs is becoming increasingly
important. However, approval delays can lengthen time to market.
10
While both the FDA and EMEA are attempting to reduce approval times, largely
through expansion of fast track programs, delays remain common, as regulators
attempt to verify the safety of increasingly complex products.
Expanding R&D activities to ensure that compounds submitted for approval

represent only the best possible candidates might improve approval rates and times,
but the high and rising cost of R&D continues to constrain such expansion.
Drug approval trends at FDA
Although FDAs drug approval process has come under heavy scrutiny since the
market withdrawal of Mercks Vioxx in 2004, allegations of undue pressure on
reviewers to approve new medicines date to well before this time. The FDA is
responding with a renewed effort to foster a culture of integrity from the top down.
Incentives to increase the pediatric data available on drugs used by children have
resulted in updated pediatric labeling for more than 120 drugs.
Officially, the FDA has not changed its overall standards for drug approval in many
years. On case by case basis, however, the agency appears to be requiring more
data to verify safety.
To provide speedier approval for certain drugs that address unique needs, the FDA
has established three categories within which applications will be reviewed on a
shorter timetable: Fast Track, Accelerated Approval and Priority Review.
Under the Orphan Drug Act, nearly 1,700 medicines have been designated orphan
drugs, and 249 have been approved for use.
Despite ongoing attempts by FDA to increase the availability of medicines, there

has been no real improvement in overall drug approvals since 1995.
11
While the number of clinical trials conducted in the U.S. continues to rise, the
number of new molecular entities approved each year has declined since 2004.
FDA is attempting to reduce approval times for generic medicines and is

increasingly switching Rx products from classes not previously available over-thecounter to nonprescription use.
FDA is asking for more data pursuant to applications for drugs that pose heightened
safety concerns.
While the EMEA has recently established an approval pathway that clarifies the
regulatory process by which biosimilars can be approved, the FDA has not yet
established such a process.
Drug approval trends at EMEA
The EMEA is currently putting systems in place for a more effective centralized
procedure with a role comparable to that of the U.S. FDA. However, budgetary
concerns will constrain development.
In Europe as in the U.S., increasing reports of adverse drug reactions, expanding

usage of products obtained over the Internet and associated issues with
counterfeiting are creating imperatives for heightened drug safety testing.
To provide greater oversight for all products during both the approval and postmarketing periods, the EMEA created a set of Scientific Advisory Groups in 2006.
The EMEA has not recently made substantive official changes to its overall
standards for drug approval. On case by case basis, however, European regulators
appear to be exercising more caution in granting approvals, particularly requiring
sufficient data to confidently verify drug safety.
12
In an effort to bring needed medicines to market more quickly, the EMEA has been
attempting to reduce the time it spends reviewing marketing applications. After a
slight increase in overall review time in 2005, review times were significantly
reduced in 2006 for centralized procedures.
In July 2006, the EMEA implemented a new review system to speed the approval
of innovative drugs that respond to unmet medical needs or constitute a significant
improvement over available methods of prevention, diagnosis or treatment.
To streamline drug testing and eliminate the collection of unnecessary clinical data,
the EMEA has relaxed requirements for pediatric trials for certain products.
Despite improvements in processing speed and volume, the EMEA is reportedly

approving fewer products than the FDA.
In its approach to biosimilars, the EMEA has a significantly more comprehensive

approval structure in place than the FDA and in fact, Europe is quickly becoming
the global center for the development and production of biosimilar medicines.
Industry response
Pharmaceutical and biotech companies continue to work aggressively, both

separately and together, to improve drug development processes.
Several new technologies are emerging to help identify toxicity early in drug
candidates, including genomics and stem cell approaches.
One of the simplest, albeit least desirable, means to address rising data requests
from regulators and increasing standards for approval is for drug makers to raise
their investments in R&D. This has, in fact, occurred, with the number of U.S.
clinical trials expanding by 6.9% per year from 2000 to 2007 and U.S. R&D
spending increasing by 13.2% annually.
13
One of the most significant ways in which drug makers have, and continue to,
achieve R&D productivity improvements has been through the utilization of CROs.
Overall, CROs are able to shorten clinical testing times by as much as 30%, thereby
leading to faster drug approvals. This has led to rising usage of CRO services, with
global CRO revenues estimated at $16b in 2007 and continuing to grow by roughly
10% per year.
Over the past two years, the pharmaceutical industry has embraced repositioning,
a systematic new means to analyze an entire library of failed experimental
compounds to identify new therapeutic applications.
Industry groups are seeking greater transparency of clinical trial results in an effort
to self-police the industry and thereby proactively prevent potentially more
restrictive requirements from the FDA or Congress. In both the U.S. and EU, new
clinical trial databases have been established to provide details of drug testing
results.
On the theory that a stronger regulator can more effectively, and more quickly,
process drug approvals, industry groups are banding together to call for increased
funding for regulators.
Global drug approval trends through 2012
In recent years, drug safety regulators worldwide have become more cautious of
new products in response to heightened public scrutiny. This trend is expected to
continue through the foreseeable future.
The FDAs Strategic Action Plan specifically notes that protecting U.S. consumers
from unsafe medical products is its first and foremost responsibility, implying
that speeding drug approvals is of secondary importance.
A key component of the FDAs approach to ensuring drug safety through the
approval process is likely to be increased requests for additional data to supplement
marketing applications as well as post-marketing data.
14
New molecular entities (NMEs) are expected to be a key focus of the FDAs
heightened interest in safety.
The FDA is attempting to reduce its approval times through innovative new
technology and training initiatives.
While drug safety is also a key concern for the EMEA, the agency is also focused
on expanding access to drugs and innovation.
In 2006, the first marketing authorization application using the EMEAs new
electronic PIM system was submitted.
The EMEA has recently implemented legislation aimed at promoting innovation

and development of new medicinal products by small and medium sized enterprises
(SMEs).
As globalization continues throughout the pharmaceutical, healthcare and other

industries, the FDA and EMEA are increasingly sharing information about new
drug candidates and adopting similar approaches to address issues that jointly affect
their respective constituents.
15
16
CHAPTER 1
The shifting regulatory

landscape
17
Chapter 1
The shifting regulatory

landscape
Summary
In both the U.S. and Europe, the utilization of Rx medicines, including both
generic drugs and new molecular entities, is rising strongly.
Increasing use of medications carries safety risk. Inherent drug risks are generally
related to toxicity and the pharmacokinetic properties of the drug itself.
Drug safety risks run the gamut from minor discomforts such as the nausea
associated with many classes of medications to life-threatening conditions like
increased risk of liver toxicity caused by cholesterol-reducing statins.
Over the past five years, the incidence of adverse drug reactions reported in both
the U.S. and Europe has risen sharply.
Marketing withdrawals may be required for drugs that have been associated with
a significant level of extremely adverse effects. The most significant market
withdrawal to date has been Mercks Vioxx, which was recalled in September
2004 after more than 80m prescriptions had been written for the drug worldwide.
One study showed that patients taking Vioxx were twice as likely to have a heart
attack as those taking naproxen.
Mercks withdrawal has galvanized public scrutiny of drug approval processes,

causing regulators, particularly the FDA, to exercise more caution in approvals.
As more blockbuster drugs lose patent protection and R&D productivity

continues to decline, minimizing time to market for new drugs is becoming
increasingly important. However, approval delays can lengthen time to market.
through expansion of fast track programs, delays remain common, as regulators
attempt to verify the safety of increasingly complex products.
Expanding R&D activities to ensure that compounds submitted for approval

represent only the best possible candidates might improve approval rates and
times, but the high and rising cost of R&D continues to constrain such expansion.
18
Drug usage in the U.S. and Europe

As the populations of the U.S. and Europe continue to age, their utilization of
prescription medicines is rising. While persons in their 20s use just two prescriptions
per year, on average, adults ages 65 to 69 have 14 prescriptions filled per year, and
those ages 80 to 84 have about 18 prescriptions filled per year, according to U.S.
Pharmacist. These medicines address a variety of conditions, many of which are agerelated, including high cholesterol, hypertension, arthritis, insomnia, etc. At the same
time, obesity continues to rise with approximately two thirds of the U.S. and European
populations overweight in early 2008 and one third obese. As excess weight is also
associated with a range of medical conditions including cardiovascular issues, diabetes,
gastrointestinal issues, etc., prescription drug usage in this population is similarly
rising. The proliferation in lifestyle drugs, such as erectile dysfunction medicines,
smoking cessation aids, etc., has further fueled the boom in prescription drug usage. By
the end of 2007, average U.S. per capita usage of prescription drugs had risen to more
than 13 prescriptions annually, compared with about 7 in 1992. Trends in Europe are
similar.
Together, the U.S. and Europe jointly comprise roughly 75% of the total global Rx
drug market. In 2007, total market sales reached roughly $690m, up 6.5% from the
prior year. In 2008, sales are expected to slow slightly but nonetheless post healthy
gains of 5% to 6%. This strong and continued expansion in the usage of prescription
medicines has given new importance to the processes by which drug candidates are
reviewed and approved for use.
In general, regulators in the U.S. and Europe are charged with the review of three types
of prescription drug products:
New molecular entities;
generic drugs, which are based bioequivalent to previously approved products;
previously approved drugs seeking expansions of their original indications.
19
As discussed in the subsections below, each of these drug candidates poses different
types of challenges and is therefore subject to different approval trends. Because the
greatest gains are to be earned from new molecular entities, and therefore most drug
spending is focused on novel compounds, this report will center on approval trends for
these products with only a peripheral discussion of generic approvals and indication
expansions.
New molecular entities

New molecular entities represent novel compounds that are submitted to regulators for
the first time. In the U.S., drug makers file a New Drug Application (NDA) with the
FDA, while in Europe, applicants file similar documents either with individual national
regulators or centrally through the mutual recognition procedure (MRP). In all cases,
the goal of the review process is to provide sufficient information to establish that:
The drug is safe and effective for its proposed usage, with benefits outweighing
risk;
the drugs proposed labeling is appropriate;
the methods used to manufacture the drug and maintain quality are adequate.
This process is particularly important since new molecular entities increasingly address
complicated conditions with highly sophisticated science. Applications typically
contain tens, and sometimes hundreds, of thousands of pages and detail the results of
animal studies, human clinical trials, drug formulation, human drug metabolism,
manufacturing, processing and packaging. Biologic products, such as vaccines and
many recombinant proteins, are approved by FDA via a Biologic License Application
(BLA), rather than an NDA. Manufacture of biologics is considered to differ
fundamentally from that of less complicated chemicals, requiring a different approval
process.
20
Generic drugs
Generic drugs are essentially copies of products that have previously been approved.
They are generally introduced when the patent on the original drug expires or is found
to be invalid. Generics may be introduced by the developer of the original drug, but are
more often launched by specialty generics manufacturers as a means to enter a new
market.
Rising usage of generics

Because generic drug makers need not reproduce safety studies when seeking approval
for product that is bioequivalent to an approved medicine, their R&D costs are
significantly lower and they can therefore introduce products at steep discount to
original drugs. According to the nonprofit Kaiser Family Foundation, for example, in
2006 the average U.S. brand-name prescription cost more than three times the average
generic, at $111 compared with $32.
As health care costs continue to rise, this significant price advantage has resulted in
dramatic growth for the generic industry as generic drug makers aggressively challenge
patents in order to obtain rights to ever more top-selling medicines. In 2008, the global
generic drug market is expected to reach about $80b. Growth is particularly strong in
the U.S., where health care is funded primarily through the private sector. In 2007,
generics accounted for more than half of all prescriptions filled, up from 44.9% in
2003. Virtually all health care plan providers are attempting to contain spending on
prescription drugs, implementing incentives for plan participants to use generics rather
than branded products. This may take the form of step therapy (sequential use of least
expensive medications before more expensive drugs), as a formulary alternative for
which plan participants make the lowest co-payment or in some cases, as the only
medicine in a given therapeutic category that the plan will cover.
21
Generic drug application trends

As a result of this rising demand for low cost medicines, generic approval rates
continue to rise. In its 2007 fiscal year, the U.S. FDA approved 683 generic drugs, a
30% increase from its 2006 fiscal year. The agency has said that during 2008, it will
bolster its generic drug program so that it can more quickly process the rising number
of generic drug applications it expects to receive. These Abbreviated New Drug
Applications (ANDAs) may be filed for any molecular entity except biologics, such as
recombinant proteins.
In Europe, health care is largely government funded but the level of generic drug usage
varies considerably with the regulations of each country. Nonetheless, usage of
generics has been rising due to initiatives in France, U.K. and Germany to reduce
government drug spending. This includes, for example, a partial reference pricing
system established in France in 2003 under which branded products off patent are only
reimbursed at the level of the generics, forcing patients to pay the difference for the
branded version. In Germany, a 2003 mandate for aut idem prescription writing
required pharmacists to fill prescriptions with one of the five cheapest generic versions
for all drugs off patent. Branded products can only be used if the physician specifically
indicates not to use a generic. This has resulted in generics accounting for about 40%
market share by volume within a year of launch and nearly 70% within three years.
Over the next five years, more than two dozen drugs with global sales of $500m or
more will lose patent protection, creating significant new product opportunities for
generics manufacturers, and stimulating further growth in generics usage. Key products
that will lose patent protection in one or more major markets worldwide in 2008
include Mercks Fosamax osteoporosis medication, Johnson & Johnsons Risperdal for
schitzophrenia and Topamax for migraine, GlaxoSmithKlines Lamictal antiepileptic
and Abbott Laboratories Depakote for the treatment of bipolar disorder.
22
Indication expansions
An indication expansion broadens a drugs usage beyond its original intended use. The
expanded usage may take a variety of forms, including:
Expanded usage of the drug under more flexible conditions, such as for
monotherapy instead of therapy in combination with another drug;
extension of the drugs original usage to new patient populations, like children
and/or adolescents;
extension of the drugs usage to related indications, such as the approval of an

antibiotic for specific types of infections;
addition of entirely new therapeutic indications, such as treatment of additional

diseases or conditions.
While all of these extensions serve to increase the size of the potential patient
population for the drug, pediatric expansion and particularly the addition of large new
therapeutic indications generally have the most significant effect upon the drugs
usage. They can also serve as an effective means of delaying generic competition, since
regulations in both the U.S. and the E.U. provide some additional protection for drugs
whose usage is extended.
In the U.S., innovator companies are awarded three years of data exclusivity for a
change to a products label that requires clinical trials to be conducted, although
changes to the Medicare Modernization Act of 2003 have limited the opportunity to
generate multiple 30-month stays. Originator companies had historically relied upon
listing patents covering new indications in the Orange Book, thereby forcing generics
manufacturers to make a paragraph IV certification in its Abbreviated New Drug
Application (ANDA), and generating an automatic 30-month stay of approval.
In Europe, manufacturers have long taken advantage of the requirement for generics
companies to use the Mutual Recognition Procedure (MRP) process but also have the
same Summary of Product Characteristics (SmPC) as the listed drug in each market, to
23
extend patent protection by filing different indications in different markets. This results
in SmPCs for the listed drug differing between regions and makes it impossible for a
generic to gain approval for the full range of indications in each market via the MRP. A
related action that can delay generic competition, even if SmPCs are harmonized across
markets, is the filing of patents for new indications, which may expire at different times
in different countries. Thus the generic company would be prevented from marketing
the product for a particular indication. This can prevent launch of the product even for
patent expired indications. The mention of a patented indication in the generics
companys marketing authorization (MA) amounts to patent infringement, but
excluding the patented indication can result in difficulties in gaining approval since the
generic SmPC would differ from that of the originator product.
Because of these benefits, indication expansion is a common lifecycle management

strategy, with more than four fifths of the 50 top selling brands in 2007 having had
additional indications approved since their initial U.S launch. Developers of
blockbuster drugs often investigate additional indications particularly usage
expansion to younger patients as a means to extend the products patent life and
delay generic competition. This can give rise to multiple new indications for a single
drug, as shown in Table 1.1.
Often, a manufacturer will obtain information from external sources suggesting a

potential new indication. This may arise from physicians, researchers and others who
notice additional therapeutic benefits from a particular product, as well as similar
competing products that obtain approval for additional indications. When this latter
event occurs, it is not unusual for all the drugs within a particular class to one by one
undergo an indication expansion. This occurred, for example, with Abbotts, Amgens
and Johnson & Johnsons biological response modifiers for treatment of rheumatoid
arthritis. Infectious disease, central nervous system disorders and cardiovascular
disease remain popular areas for new indication expansion, largely due to the high
numbers of patient sub-populations in these areas and the high commercial value of
related products.
24
Table 1.1: Selected indication expansions for U.S. commercialized drugs, 2002 - 2007
Company
Drug
Original Indication
Expanded Indication
Date of Clearance
Pfizer
Pfizer
Johnson & Johnson
Schering-Plough
Wyeth
Abbott
Johnson & Johnson
Johnson & Johnson
Johnson & Johnson
Johnson & Johnson
Roche
Lyrica
Celebrex
Remicade
Avelox
Effexor
Humira
Remicade
Levaquin
Remicade
Remicade
Xenical
Epileptic seizures
Osteoarthritis
Rheumatoid arthritis
Infections
Depression
Infections
Obesity
June 2007
December 2006
September 2006
November 2005
November 2005
October 2005
September 2005
August 2005
May 2005
December 2004
October 2004
Johnson & Johnson

Amgen
Roche
Shire
Novartis
Topamax
Enbrel
Xenical
Adderall
Lescol
Epileptic seizures
Obesity; patients to age 16
ADHD; pediatric patients
Cholesterol reduction
Merck
Pfizer
GlaxoSmithKline
Allergan
TAP Pharmaceuticals
Singulair
Zyrtec
Flonase
Botox
Prevacid
Asthma
Allergies; patients to age 2
Allergies
Various medical indications
Ulcers and heartburn; to age 11
Fibromyalgia
Juvenile rheumatoid arthritis
Chronic severe plaque psoriasis
Intra-abdominal infections
Panic attacks
Psoriasis
Ulcerative colitis
Bacterial sinusitis
Psoriasis
Active ankylosing spondylitis
Delay onset of type 2 diabetes
in obese patients with pre-diabetes
Migraines
Psoriasis
Patients to age 12
ADHD; adults
Risk reduction in coronary
revascularization in patients with
coronary heart disease
Allergies
Allergies; patients to age 6 mos.
Non-allergic nasal symptoms
Cosmetic/aesthetic use
Patients to age 1
August 2004
April 2004
December 2003
October 2003
May 2003
January 2003
November 2002
May 2002
April 2002
March 2002
Business Insights Ltd
Source: Company news releases and public filings
25
Expansion of a drugs usage to pediatric patients is not appropriate for all products,
however, since many of the most widely-used drugs address conditions that are most
prevalent among older persons. These include medications that lower cholesterol,
control hypertension, address various cardiovascular conditions, mitigate depression,
etc.
Some developers employ extensive indication expansion strategies, particularly for

products whose usage can be leveraged to address closely related conditions. For
example, through the end of 2007, Johnson & Johnson had obtained nine U.S.
approvals for new indications for its Remicade, a biological response modifier initially
cleared to market for the treatment of rheumatoid arthritis in 1998 and Allergans
Botox (botulinum toxin) had been cleared for more than 20 different indications related
to muscle-freezing in markets around the world.
Drug approval issues

With the continuing introduction of newer and better drugs that address a broader range
of life-threatening and debilitating conditions, worldwide use of prescription medicines
has soared over the past decade. This has resulted in significant economic and quality
of life benefits. For example, the Organization for Economic Cooperation and
Development estimates that over the past 40 years, new medicines have halved the
number of hospital admissions for a variety of serious conditions including mental
illness, infectious diseases and ulcers. As this has occurred, early infancy diseases have
declined by 80% worldwide, ischemic heart disease has fallen by 68% and
hypertensive heart disease has decreased by 67%. This has a direct dollar benefit, since
for every $1 spent on pharmaceuticals, an estimated $4 is saved on hospital expenses
and other therapeutic procedures.
However, increasing use of medications also carries safety risk. Each year, about
500,000 persons in the U.S. and Europe die from prescription drug reactions. Drug
26
safety issues have particularly come into the limelight with the market withdrawals of
several COX-2 inhibitors on new safety information. However, while more
comprehensive drug testing might identify potential problems in new products before
they come to market, such testing will also increase time to market and development
cost. These problems directly impact both drug makers as well as consumers.

Since the penning of the Hippocratic Oath admonishing doctors to do no harm, the
medical community has long recognized the need to ensure that therapies intended to
help patients do not, in the process, cause them more harm than good. In terms of drug
safety, this imperative results in a continued need to balance access to new life-saving
or life-enhancing therapies with potential safety risks that could result from adverse
reactions. Although these risks may also arise from physician prescribing errors,
pharmacist dispensing errors and/or inadequate patient compliance, this report will
focus on inherent drug safety risks.
Inherent drug risks are generally related to toxicity and the pharmacokinetic properties
of the drug itself. While they can often be managed with appropriate labeling, dosing
and monitoring of use, drugs that demonstrate an unacceptably high risk of adverse
reactions which are believed to be generally unmanageable are disqualified from use.
This usually occurs as soon as the risk is discovered and quantified, preferably early in
the development process before more expensive clinical testing has begun.
Manufacturers generally try to fail early, fail cheap by identifying significant safety
risks early in the testing process. In some cases, the drug is eliminated from
consideration by regulators during their review process and in a relatively small
number of instances, a drug is removed from the market after it has been launched as
new information about its effects come to light. This may occur either in the form of a
voluntary recall by a manufacturer, as when Merck discontinued Vioxx in late 2004, or
upon request by regulators, as FDA subsequently required of Bextra.
27
Medications with identified but manageable risks, which comprise the bulk of
prescription drugs sold today, may be approved with expanded labeling requirements
advising patients and healthcare providers of potential safety issues. These may contain
contraindications for use applying to certain patient populations or may require regular
physician monitoring of use. The small number of drugs that have not been associated
with significant or severe side effects are generally not subject to these restrictions.
Figure 1.1 shows the spectrum of safety risk along which each drug sits and resulting
restrictions on its use.
Figure 1.1: Drug safety risk spectrum
Increasing safety
Generally unsafe
under any
circumstances
Manufacturer
discontinues testing
or drug not approved
or drug recalled
Safe under certain

conditions
Labeling restricts
usage; manufacturer
may recommend
monitoring
Generally safe for a

wide population
Few restrictions
Source: Authors analysis
These safety risks run the gamut from minor discomforts such as the nausea and
headaches associated with many classes of medications to life-threatening conditions
like increased risk of liver toxicity caused by cholesterol-reducing statins. Although in
most cases, the likelihood of serious side effects is quite small, for some groups of
drugs, the risk is higher. These include some very broadly used classes of medications,
such as those that address pain relief, asthma, migraine, osteoporosis, hypertension and
other widespread conditions. Table 1.2 lists some widely used groups of medications
and side effects that have been reported in clinical and post-marketing experience.
28
Table 1.2: Potential safety risks of popular drug classes

Drug Class
Indication
Potential Reactions
Safeguard
COX-2 inhibitors
Pain relief
Risk of stroke, heart attack
Expanded labeling,
recalls
Statins
Cholesterol
reduction
Liver toxicity
Liver tests
NSAIDs
Pain relief
Ulcers
Expanded labeling,
contraindications
Bisphosphonates
Osteoporosis
Gastrointestinal effects
Expanded labeling,
contraindications
Hormone replacement
therapy
Symptoms of
menopause
Cardiovascular effects
Expanded labeling,
contraindications
Leukotriene receptor
antagonists
liver
Asthma
Liver toxicity
Expanded labeling,
contraindications,
tests
Triptans
Migraine
Expanded labeling,
contraindications
ACE inhibitors
Hypertension
Renal impairment
Expanded labeling,
physician supervision
Safety shortfalls: rising adverse drug reactions

In 2007, the estimated number of adverse drug reactions reported to the FDA from
manufacturers and health care professionals exceeded 500,000, compared with
approximately 150,000 in 1995. As shown in Figure 1.2, this 10.4% annual growth
demonstrates a trend of increasing incidence of dangerous drug side effects.
Although prescription volume has risen over the same period of time, growing from
2.2b prescriptions in 1995 to 3.8b in 2007, adverse reactions are occurring in an
29
increasingly larger portion. While 0.007% of all prescriptions produced an adverse

reaction in 1995, by 2007 this proportion had almost doubled to an estimated 0.013%.
Affected populations increasingly include vulnerable groups such as seniors, which are
expanding with the aging of the Baby Boomers.
Figure 1.2: Growth in U.S. reported adverse drug reactions, 1995 - 2007
Reported Adverse Drug Event
600,000
500,000
400,000
300,000
200,000
100,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: FDA
Safety failures: drug withdrawals

Drug recalls are intended to prevent unsafe drugs from use and may be either
temporary or permanent. Temporary recalls may involve one or a small number of
batches of a particular drug that experience problems in distribution or manufacturing.
These may include a variety of issues such as subpotency, stability data that does not
support a drugs expiration date, dissolution failure, label mix-ups, the presence of a
foreign substance in the product, pH failures or contamination of non-sterile products.
30
The vast majority of recalls represent temporary suspensions, with only a small
proportion comprising permanent market withdrawals.
While the number of significant safety-related drug withdrawals is relatively low, at

less than 3% of approved Rx products, many have been very high profile, representing
a large number of users and a high number of associated fatalities or other significant
events. For example, Bayers cholesterol reducing statin, Baycol, was initially
approved in the U.S. in 1997, then recalled in August 2001 following the deaths of 52
patients worldwide. The deaths had been caused by rhabdomyolysis, a muscle ailment
that had been known to be a possible side effect of all statin drugs, however, its
incidence had been much higher and more serious among Baycol patients than among
other statin users. Between 1997 and 2001 the drug was prescribed for more than 6m
patients worldwide.
Table 1.3 shows significant Rx drug discontinuations that have occurred since 1997. In
general, most of these withdrawals occurred on a worldwide basis, with a withdrawal in
one market followed by withdrawals in other global markets. The most significant
market withdrawal to date has been Mercks Vioxx, which was recalled in September
2004 after more than 80m prescriptions had been written for the drug worldwide since
its introduction in 1999. The drug had been linked to an increased risk of
cardiovascular effects, with one study showing that patients taking Vioxx were twice as
likely to have a heart attack as those taking naproxen.
The importance of time to market

As more blockbuster drugs lose patent protection and R&D productivity continues to
decline, minimizing time to market for new drugs is becoming increasingly important.
As of early 2008, an unprecedented number of blockbuster drugs have lost patent
protection and become subject to competition from low priced generics, slowing the
double digit growth the pharmaceutical industry had experienced previously. From
2000 to 2005, for example, the compound annual growth rate (CAGR) for global
31
blockbuster revenues was almost 20% and comprised nearly a third of a typical
blockbuster marketing companys total revenues, on average. For some companies,
including Merck, Pfizer and Amgen, blockbusters comprise more than half of total
sales. However, when low cost generic competition arises, sales of cannibalized drugs
fall by up to 80%, putting substantial pressure on drug makers to replace this lost
revenue with sales from new products.
32
Table 1.3: Significant drug discontinuations and affected patient groups, 1997 - 2007
Drug
Manufacturer
Use
Recall Date
Reason
Potentially Affected
Patients Worldwide
Zelnorm
Novartis
IBS
March 2007
< 1 million
Bextra
Pfizer
Pain
April 2005
11 million
Vioxx
Merck
Pain
September 2004
84 million
Baycol
Bayer
Cholesterol
August 2001
Fatal rhabdomyolysis
6 million
Raplon
Organon
Pain
March 2001
Deaths from bronchospasm
1 million
Lotronex
GlaxoSmithKline
IBS
November 2000
Ischemic colitis
< 1 million
Propulsid
Johnson & Johnson
Heartburn
March 2000
Fatal heart rhythm disturbances
30 million
Rezulin
Pfizer
Diabetes
March 2000
Fatal liver toxicity
10 million
Raxar
GlaxoSmithKline
Infection
October 1999
Fatal heart rhythm disturbances
3 million
Duract
Wyeth
Pain
June 1998
Fatal liver toxicity
3 million
Posicor
Roche
Hypertension
June 1998
Fatal drug interactions
12 million
Redux
Wyeth
Weight loss
September 1997
Fatal heart valve damage
14 million
33
However, approval delays can lengthen time to market. For potential blockbuster
drugs that address large markets of chronic disease sufferers such as high cholesterol,
hypertension or diabetes patients, excess time spent in testing results in significant lost
sales. This further exacerbates financial pressure, since each day that a blockbuster
drug with sales of $1b per year is delayed to market costs nearly $3m in sales.
Approval delays also extend the time consumers must wait for needed medicines. In
the U.S. and Europe, 10 to 15 years are typically required to take a drug from the
laboratory through regulatory approval. Up to 6 years of this may be spent in preclinical testing, another 2 years may be devoted to Phase I evaluation, 3 years may be
needed for Phase II testing and an additional 4 years may be necessary for Phase III
studies. Pre-clinical studies include toxicology and other safety studies, conducted both
in vitro and in animal models. Phase I studies evaluate drug safety, determine safe
dosage ranges and identify side effects in small human groups of 20 to 80 volunteers.
Phase II tests measure effectiveness and further evaluate safety in large groups of 100
to 300 patients. Phase III trials confirm effectiveness, monitor side effects and compare
the drug to other commonly used treatments in large patient groups of 1,000 to 4,000 or
more individuals. During this process, many drug candidates are eliminated of as
many as 10,000 initially screened compounds, 250 enter pre-clinical testing, 5 enter
clinical evaluation and just one is finally approved.
through expansion of fast track programs, delays remain common, as regulators attempt
to verify the safety of increasingly complex products. For example, while the FDA has
decreased average approval time from 16.6 months in 1995 to 11.5 months in 2006,
approval times increased during four of these 11 years. These trends are examined in
more detail in Chapters 2 and 3.
Impact of cost constraints

While expanding R&D activities to ensure that compounds submitted for approval
represent only the best possible candidates might theoretically improve approval rates
34
and times, the high and rising cost of drug development continues to constrain such
expansion.
In 2007, drug developers worldwide spent an estimated $120b on drug development,

up from about $2b in 1980. This includes pre-clinical, Phase I, II and III clinical
testing. While a new drug cost on average $138m to take from conception to FDA
approval in 1975, the average development cost had risen to $1b by 2007, outpacing
inflation by more than 250%. In the U.S. alone, R&D spending has risen from $4b in
1985 to $55b in 2006, according to the Pharmaceutical Research and Manufacturers
Association of America (PhRMA). This is the result of several factors including
increasing regulatory requests for more study data, more complicated science and more
complex disease targets.
Such rising expenditure on R&D would not be as troublesome if the number of new
drugs were rising. However, this is not the case. As shown in Figure 1.3, although
R&D spending has consistently increased over the past decade, the number of new
drug approvals continues to fluctuate with no apparent relationship to spending.
Conclusion
In both the U.S. and Europe, recent marketing withdrawals have led to a heightened
focus on drug safety, which in turn has impacted drug approval numbers and times.
Although these considerations are not new, the intensity of public scrutiny, to a certain
extent, is. This has created a new operating environment, in which regulators
increasingly weigh the risks of new product against its benefits. When these risks
cannot be adequately understood, regulators do not hesitate to request more data to
validate or refute conclusions. This, in turn, is contributing to a rise in the size and
number of clinical trials as well as overall research budgets.
35
140
70
120
60
100
50
80
40
60
30
40
20
20
10
$b
Number
Figure 1.3: U.S. R&D spending versus new drug approvals, 1995 2007
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Number of approvals
R&D expenditure
Source: FDA, PhRMA
36
CHAPTER 2

FDA
37
Chapter 2

FDA
Summary
reviewers to approve new medicines date to well before this time. The FDA has
renewed effort to foster a culture of integrity from the top down.
Officially, FDA has not changed its standards for drug approval in many years.
On case by case basis, however, FDA appears to require more data to verify
safety.
To provide speedier approval for certain drugs that address unique needs, the
FDA has established three categories within which applications will be reviewed
on a shorter timetable: Fast Track, Accelerated Approval and Priority Review.
Incentives to increase the pediatric data available on drugs used by children have
resulted in updated pediatric labeling for more than 120 drugs.
Under the Orphan Drug Act, nearly 1,700 medicines have been designated orphan
drugs, and 249 have been approved for use.
Despite ongoing attempts by FDA to increase the availability of medicines, there

has been no real improvement in overall drug approvals since 1995.
While the number of clinical trials conducted in the U.S. continues to rise, the
number of new molecular entities approved each year has declined since 2004.
FDA is attempting to reduce approval times for generic medicines and is

increasingly switching Rx products from classes not previously available overthe-counter to nonprescription use.
FDA is asking for more data pursuant to applications for drugs that pose
heightened safety concerns.
While the EMEA has established an approval pathway that clarifies the process
by which biosimilars can be approved, the FDA has not yet established such a
process.
38

The U.S. FDAs drug testing and approval process consists of a series of discrete and
well-defined stages, each of which represents an opportunity to disqualify a drug that
exhibits an unacceptable safety profile. Because the expense of testing usually
increases with each stage, developers usually seek to disqualify marginal or borderline
candidates early to minimize spending on products that will fail later. These stages
include:
Submission of a Notice of Claimed Investigational Exemption for a New Drug

(IND);
pre-clinical testing;
Phase I clinical testing;
Phase II clinical testing;
Phase III clinical testing;
submission of a New Drug Application (NDA).
The IND was established by the 1962 Kefauver-Harris Amendment to the Federal
Food, Drugs & Cosmetics Act of 1938, and generally contains all of the scientific
information known about the investigational drug to be studied. After an IND has been
filed with FDA, the sponsor must wait 30 days while FDA reviews the submission. If
the FDA has not contacted the sponsor with questions about the IND filing, the initial
introduction study may begin on the 31st day. In some cases, the drug developer may
request a waiver of this rule, such as for studies of a drug previously approved for a
different indication in a new condition. Since the safety of the drug in humans had
already been established, FDA may allow the new clinical investigations to proceed
immediately, since only efficacy in the new condition must be established.
39
Prior to human clinical testing, pre-clinical testing of new drugs generally includes
three types of studies, all of which are performed in animals:
Pharmacology studies that include screening and comparative tests with other drugs
of known potency or activity; these determine what pharmacologic properties a
drug has and which body systems the drug will affect;
toxicology studies;
reproductive and teratology studies; these evaluate the effects of individual drugs
on reproductive activity, fetal development, lactation and postnatal neonatal
development in animals.
Phase I clinical trials involve the administration of the investigational drug to normal,
healthy male volunteers. Females are usually excluded from these trials due to the
possible teratogenic effect of a drug. The purpose of the studies is to determine human
tolerance to increasing single doses as well as multiple doses of the drug. As dosing
approaches the anticipated therapeutic range, blood, urine, and stool samples are
collected to determine the absorption, distribution, metabolism, and excretion (ADME)
properties of the drug and as well as the compounds into which the original drug is
transformed while in the body. An assessment of the rate and extent of a drug's
absorption pattern, called a bioavailability study, is also conducted. This type of study
forms the basis for establishing bioequivalence between two brands of the same generic
drug and can be used in an Abbreviated New Drug Application (ANDA)

demonstrating the bioequivalence of a generic brand of a drug in comparison to a brand
name of the same agent. ANDAs are often approved by FDA on the basis of
bioavailability studies alone, saving generic drug makers the costly, time-consuming
safety and efficacy studies required from makers of novel drug therapies.
Following the establishment of a well-tolerated dosing regimen in Phase I studies, an

investigational drug enters Phase II clinical trials. In these studies, the drug candidate is
given to patients who have the condition for which the drug is intended. Phase II tests
40
are designed to determine if the tolerated dose range is therapeutically effective and if
any adverse effects occur at an acceptable level of severity and frequency. Initially, the
side effect frequency is determined by comparing the experimental drug to a placebo.
Subsequently, the drug is compared to other active drugs with similar side effect
profiles that may be metabolized in a related manner. The studies, which range from
two weeks to three months, usually include from 200 to 300 volunteers. Shorter term
studies are referred to as early Phase II or Phase IIA studies, while longer studies are
designated late Phase II or Phase IIB studies. Adverse drug effects are analyzed by
organ system (cardiovascular, respiratory, renal, skin, etc.) then assigned a severity
rating (mild, moderate, severe) and the relationship between the reaction and the drug
is assessed as (possible, probable, remote, or definite). In addition, the incidence of
occurrence of the adverse effects is calculated and compared to similar data for patients
who received a placebo. If effectiveness of the drug appears encouraging in relation to
its side effect profile, the drug may be advanced to Phase III clinical investigations.
Phase III clinical studies are similar to Phase II studies, but they generally continue for
a considerably longer period of time so that the full effects of a drug candidate may be
studied and patients long term reactions to the drug examined. This may range from
several months to more than three years. Data on adverse reactions is typically
evaluated for frequency, severity and relationship to the test drug.
The New Drug Application (NDA) contains all of the drugs pertinent safety and
efficacy data that was accumulated during its pre-clinical and clinical testing. It may
consist of hundreds of volumes of data and is submitted to the FDA as evidence of
safety and efficacy of the drug candidate. FDA reviews the submission and either
grants approval of the application, states the application is approvable with the
clarification of certain issues, or tells the NDA sponsor why it has determined that the
NDA is not approvable.
41
Pressure to approve drug candidates

reviewers to approve new medicines date to well before this time.
In 1998, for example, consumer activist group Public Citizen surveyed FDA medical
officers who were the primary reviewers for new drug applications. Of 53 responses,
27 cited instances in which the medical officer thought a drug too dangerous to be
approved but approval occurred over their objection. Seventeen medical officers
categorized the standards of FDA review for safety and efficacy as "lower" or "much
lower" compared to those in existence prior to 1995, and several stated that they had
been instructed by their superiors to censor their reports.
FDA found similar results in its own internal study conducted three years later. In
2001, as FDA turnover rates among scientists and physicians rose, the agency
conducted an assessment of job satisfaction. It found that about one-third of medical
officers did not feel comfortable expressing differing scientific opinions, and a similar
number felt that decisions adverse to a drug were stigmatized within the agency.
Several reviewers said that decisions should be based more on science and less on
corporate interests.
A follow-up study in 2003 by the Health and Human Services Inspector General
indicated that 18% of surveyed FDA physicians and scientists felt pressure to
recommend that drugs be approved for sale despite their reservations about the drugs
safety, efficacy or quality. The report concluded: "Overall, these findings present a
significant warning signal." News reports since the Vioxx recall in September 2004
have cited rising numbers of FDA drug safety officers claiming to have been pressured
to approve products. A study released in July 2006 by the Union of Concerned
Scientists found that about 15% of almost 6,000 FDA staffers polled have been "asked
to inappropriately exclude or alter technical information or conclusions in an FDA
scientific document." In addition, 39% of the 997 respondents stated that the FDA
42
wasn't "acting effectively to protect public health." Some FDA staff claim to have been
punished or ignored after voicing concerns about popular medicines. For example,
Rosemary Johann-Liang, former deputy director of the Division of Drug Risk
Evaluation in the Office of Surveillance and Epidemiology at FDA, lost authority to
approve strong safety recommendations after she agreed with a February 2006 review
that recommended a black box warning for GlaxoSmithKlines diabetes medication,
Avandia.
Future directions in the FDA drug approval process

The FDA has taken these cumulative allegations seriously, responding with a renewed
effort to reduce pressure on drug reviewers and foster a culture of integrity from the top
down. In addition to the practical goals of improving the dissemination of drug safety
information to the public, FDAs Fall 2007 Strategic Plan specifically calls for the
cultivation of a culture that promotes transparency, effective teamwork, and mutual
respect, and ensures integrity and accountability in regulatory decision making. This
encompasses the application of methods of scientific analysis with consistency,
uniformity, and integrity with decision processes that are transparent and open to
scrutiny, allowing for diverse points of view and vigorous debate.
To achieve these goals, the Strategic Plan states that FDA will undertake the following
specific actions throughout 2008:
Develop FDA Core Values Statement: FDA Workplace Culture Initiative CoChairs will develop an FDA values statement, based on survey and focus group
input of staff throughout the agency, to serve as guiding principles for agency
operations. New FDA culture initiatives and the draft Values statement was
presented at an All-Hands Broadcast by the FDA Commissioner in September
2007.
Develop FDA Teamwork Best Practices: The Office of Commissioner will

coordinate a process to identify, document and share best practices that have been
43
developed by centers and offices across the agency. This will result in a reference
list that will be compiled and shared with center and office managers.
Strengthen FDA Advisory Committees: To ensure that the public has confidence in
the integrity of advisory committee recommendations, the FDA has taken a variety
of steps to increase the information about advisory committees that is made
available to the public. It will also finalize guidance on advisory committee
conflicts of interest.
Given the severity of the drug safety issues that have been raised over the past several
years, these initial steps are likely to be followed with further actions to increase the
transparency of drug safety information and further reduce internal pressures to
approve new medicines.

Drug safety is the primary mission of the FDAs Center for Drug Evaluation and
Research (CDER). This group has evolved over time to address increasingly
complicated technological, scientific and marketplace issues.
Evolution of drug safety testing

Drug safety testing has been an ongoing process, with a large number of laws enacted
to strengthen FDAs oversight powers. Key developments are presented in Table 2.4.
44
Table 2.4: Timeline of key FDA legislations

Event
Impact
Food & Drugs Act of 1906
Required drug purity
Formation of the Food, Drug,

and Insecticide Administration (1927)
Early framework of FDA established
Re-naming of the Food and Drug

Administration (1931)
FDA formally renamed
Federal Food, Drugs & Cosmetics Act of 1938
Required safety and efficacy testing of all

marketed drugs
Kefauver-Harris Amendment of 1962
Required extensive animal pharmacological

and toxicological testing before a drug could
be tested in humans
Federal Advisory Committee Act of 1972
Prescribed the formal use of advisory

committees throughout the federal #
government including the FDA
Food and Drug Administration Modernization

Act (FDAMA) of 1997
in
Gave manufacturers a period of market

exclusivity on drugs that they agreed to test
children
Source: FDA
Although a variety of laws were in place to protect consumers prior to 1906, these did
not specifically address drugs or medicinal products. Therefore, the environment prior
to the turn of the century was largely unregulated and characterized by many types of
products making unsubstantiated claims. This slowly began to change with the 1906
passage of the Food & Drugs Act, the 1927 formation of the Food, Drug, and
Insecticide Administration (renamed the Food and Drug Administration in 1931) and
the 1938 passage of the Federal Food, Drugs & Cosmetics Act. This latter law, which
prohibited the manufacture and interstate shipment of adulterated and misbranded
foods and drugs, represented a major step forward and laid the foundation for the
U.S.s present system of drug regulation. The 1906 Act, which addressed only the
purity of drugs, did not require that either safety or efficacy be established prior to
marketing. This was adequate during the period from 1906 through the mid 1930s,
since few new drugs were developed and marketed.
45
The Federal Food, Drugs & Cosmetics Act of 1938, however, required proof of both
safety and efficacy. It followed the death of more than 100 people, many of them
children, who had taken a new sulfa drug called Elixir Sulfanilamide. The solvent used
in the untested product was a highly toxic chemical analog of antifreeze. Under the new
FDCA, toxicity studies of new drugs were required prior to marketing, and the active
ingredients in the approved product had to be listed on the label. Also, a New Drug
Application (NDA) had to be submitted by the sponsor and approved by the FDA
before a new drug could be promoted and distributed in the marketplace. The law
prohibited false therapeutic claims for drugs, formally authorized factory inspections,
and added injunctions to the enforcement tools that FDA could use to address products
it believed were unsafe. It was not until the births of thousands of deformed infants
whose mothers had taken the new sedative thalidomide, however, that the Act was
strengthened to tighten control over prescription drugs, new drugs, and investigational
drugs.
In 1962, the thalidomide crisis resulted in the Kefauver-Harris Amendment which was
passed unanimously by Congress. This required extensive animal pharmacological and
toxicological testing before a drug could be tested in humans. The data from these
studies had to be submitted in the form of a Notice of Claimed Investigational
Exemption for a New Drug (IND) and approved by the FDA before human clinical
studies can begin. The amendment also required that manufacturers submit to the FDA
more substantial evidence of the investigational drug's efficacy, as well as safety, in the
NDA. Post-approval, the amendment called for drug firms to send adverse reaction
reports to FDA, and drug advertising in medical journals was required to provide
complete information to the doctor including the risks as well as the benefits.
An ongoing series of legislative and regulatory actions since the 1962 amendment have
continued to expand FDAs role in the drug approval process. Among the more
significant of these was the Federal Advisory Committee Act of 1972, in which
Congress prescribed the formal use of advisory committees throughout the federal
government including the FDA. The Act, which requires committees to be renewed
every two years, has enabled the FDA to access a broad range of industry expertise.
46
Such committees are also responsible for a variety of critical functions, including the
evaluation of new drug applications, Rx-to-OTC switches and issues pertaining to
marketed drugs. For example, FDAs Center for Drug Evaluation and Research
(CDER) currently contains 17 advisory committees delineated by therapeutic area
which each make recommendations on new drug approvals within their class. Although
it is not required, FDA typically follows advisory committee recommendations on such
approvals. CDER also includes an advisory committee for Drug Safety and Risk
Management as well as a committee for Pharmaceutical Science, which address issues
pertaining to all therapeutic drug classes. Table 2.5 shows CDER advisory committees
operational as of March 2008.
Under calls from industry to improve safety data on drugs used by children, legislation
passed in 1997 provided drug makers with an additional six months of market
exclusivity in exchange for conducting clinical trials on children. While this has
provided important data on pediatric drug effects, which can differ significantly from
drug effects in adults, critics of the law allege that it has given rise to speedy clinical
trials largely designed to guarantee a positive finding for the drug.
In February 2005, in response to concerns that FDA mishandled information about

some drugs' potential safety risks, the Department of Health and Human Services
announced the creation of the FDA Drug Safety Oversight Board. This new group is
charged with monitoring and reporting information about potentially dangerous drug
reactions. However, its role is advisory, and while members can make generally
recommendations regarding safety issues, they do not have authority to influence a
particular drug application, remove a drug from the market or make changes to a drug's
sales practices.
47
Table 2.5: CDER Advisory Committees, 2008

Advisory Committee
Scope
Anesthetic and Life Support Drugs

Anti-Infective Drugs
Antiviral Drugs
Arthritis Drugs
Cardiovascular and Renal Drugs
Dermatologic and Ophthalmic Drugs
Drug Safety and Risk Management
Endocrinologic and Metabolic Drugs
Gastrointestinal Drugs
Medical Imaging Drugs
Nonprescription Drugs
Oncologic Drugs
Peripheral and Central Nervous System Drugs
Pharmaceutical Science & Clinical Pharmacology
Psychopharmacologic Drugs
Pulmonary-Allergy Drugs
Reproductive Health Drugs
Addresses a broad range of products

Includes antibiotics, antifungals
Includes AIDS drugs
Includes COX-2 inhibitors
Includes hypertension drugs
Addresses safety issues
Includes weight-loss drugs
Includes proton pump inhibitors
Addresses drugs used in diagnostic imaging
Covers a broad range of therapeutic classes
Focuses on cancer products
Primarily addresses generic drugs
Includes antidepressants
Includes nonsedating antihistamines
Includes contraceptives
Source: FDA
However, the FDA continues to come under criticism for approving unsafe drugs. In
September 2006, a long-awaited review of the FDA by the Institute of Medicine claims
that the agencys drug safety monitoring systems are inadequate and in need of reform,
hampered by bad management and subject to incessant internal disputes. The report
outlined a series of suggested changes including limiting initial drug approvals to five
years. As of early 2008, however, there does not appear to be any significant attempt to
implement this recommendation.
Pediatric safety testing

Because of their distinct physiologies, children often experience quite different effects
of drugs than adults. Drugs that have been extensively studied and found highly safe in
adults, for example, can behave quite differently in children even after dosages have
been scaled back proportionately. At the same time, most clinical testing for new
product candidates focuses on adults due to the far larger size of the adult population,
as well as the significantly greater expense and heightened complexity of testing drugs
48
in children. This causes safety risks, since more than 75% of drugs that are prescribed
to children have only been tested in adults.
To address this problem, several initiatives have been undertaken including the Best
Pharmaceuticals for Children Act (BPCA) and pediatric exclusivity incentives. The
Best Pharmaceuticals for Children Act was originally enacted in 1997 and reauthorized
in 2002. The legislation provides incentives for drug manufacturers to conduct clinical
trials in children, gives pediatric medications priority status for FDA evaluation, and
promotes the dissemination of information related to the use of drugs in children.
Pediatric exclusivity provides up three years of additional market exclusivity for drugs
whose manufacturers conduct pediatric safety studies. Through the end of 2007, these
incentives have resulted in nearly 800 pediatric studies involving more than 45,000
children and updated pediatric labeling for more than 120 drugs.
Future directions in drug safety reviews

Officially, the FDA has not changed its overall standards for drug approval in many
years. On case by case basis, however, the agency appears to be requiring more data to
verify safety. This is likely tied to the recent spate of embarrassing drug recalls, and is
expected to continue into the foreseeable future. For example, the FDA is now
requiring long term studies examining cardiovascular risk for all new non-steroidal
anti-inflammatory drug (NSAID) candidates and in April 2007, issued a nonapprovable letter for Mercks Arcoxia. The letter stated that Merck would need to
provide additional data to support the COX-2 inhibitors benefit-to-risk profile, even
though the drug was already available in 65 countries worldwide.
In fact, even after granting approval, the FDA is expected to increase its requests for
safety data. For example, the new FDA Amendments Act of 2007 permits the FDA to
require companies to study the risks associated with drugs even after they have been
approved for sale when new safety information may have emerged. The agency can
then demand changes in product labeling, such as restrictions on use and distribution.
49
This ability was also explicitly included in the 2007 reauthorization of the Prescription
Drug User Fee Act (PDUFA).
In 2007, entire sections were added to PDUFA regarding post market studies, risk
evaluation and risk mitigation. Among the most important is that drug sponsors
respond to an FDA notice of a post market safety issue with a supplemental label
change. FDA decides unilaterally when to make such notifications, and the
proposed label change is subject to review and discussions. However, such discussions
may last only 30 days following FDA notification, and within 15 days after conclusion
of discussions, FDA may issue an order directing the labeling change. Should sponsors
fail to respond appropriately to FDA post market safety or risk mitigation notifications,
the drug may no longer be sold in the U.S. Congress also authorized development of
post market risk identification and analysis methods that includes linkages among
multiple sources of data, proposing goals of at least 100,000,000 patients by 2012.
However, drugs and active ingredients produced outside the U.S. remain a safety risk
and are likely to continue to do so through the foreseeable future. This is a significant
concern, since foreign companies manufacture as much as 80% of all ingredients used
by American drug makers. In November 2007, the director of healthcare for the
Government Accountability Office testified before a Congressional subcommittee that
the FDA can't guarantee the safety of the U.S. drug supply because its oversight of
foreign drug manufacturers is lax. Due to poor record-keeping, the agency cant
determine which facilities haven't been inspected. Furthermore, at the current rate of
inspection, it would take the FDA 13 years to examine each known manufacturing site
once.

One of the most significant mechanisms the FDA has introduced to reduce drug
approval times has been the Prescription Drug User Fee Act (PDUFA). First
50
established in 1992, PDUFA was designed to decrease review times by strengthening

the FDAs budget. Under the law, which was reauthorized in 1997, 2002 and 2007,
drug makers pay fees for review of applications that cover about half of the FDA's
budget, thereby resulting in more manpower to review applications. In 2007, these user
fees amount to roughly $400m. The law was proposed as a means to supplement
FDAs somewhat limited operating budget in its fiscal year 2006, for example, the
FDA received just $1.5 billion, compared with $5.8 billion appropriated to the Centers
for Disease Control (CDC) and Prevention and $28.6 billion for the National Institutes
of Health (NIH). To put this in perspective, the agencys funding as a proportion of the
CDCs budget has declined from 97% in 1986 to 39% in 1996 to 28% in 2006,
according to the Coalition for a Stronger FDA. This dearth of resources continues to
hamper the FDAs ability to achieve adequate staffing levels to meet its drug review
objectives.
In 2005, FDA made further internal changes designed to speed up the availability of
innovative medical technologies through the creation of the Medical Innovative Task
Force. This group proposed five recommendations including:
Entering into new or expanded memoranda of understanding with federal agencies

outside of HHS that play important roles in medical technology development;
streamlining HHS involvement in medical technology;
supporting standardization of e-clinical trials for drugs and medical devices;
improving collaboration and cooperation between the FDA and the Centers for
Medicare & Medicare Services (CMS) to speed approval and reimbursement
coverage for new products;
expanding scientific education and training to speed medical innovation.
Progress has been made in some of these areas. For example, FDA and CMS have
agreed to conduct parallel product reviews, at the request of an applicant. They will
also work together on joint program to increase FDAs use of CMS post market
51
surveillance data. As a result of these and other initiatives, the FDA now attempts to
review and act on at least 90% of the New Drug Applications and Biologic License
Applications within 10 months of the date of filing and within six months for drugs
given priority review.
Fast track approvals

In order to provide speedier approval for certain drugs that address unique needs, the
FDA has established three categories within which applications will be reviewed on a
shorter timetable: Fast Track, Accelerated Approval and Priority Review.
The Fast Track process was designed to expedite the review of drugs to treat serious
diseases for which there is an unmet medical need. If there are existing therapies, a fast
track drug must show a significant advantage over available treatment, such as super
effectiveness and/or reduced side effects or toxicity. A drug that meets these criteria is
eligible to receive:
More frequent meetings with FDA to discuss the drugs development plan and
ensure collection of appropriate data needed to support drug approval;
more frequent written correspondence from FDA about such things as the design of
the proposed clinical trials;
eligibility for Accelerated Approval;
Rolling Review, in which a drug company can submit completed sections of its
NDA for review, rather than waiting until every section of the application is
completed before the entire application can be reviewed. NDA review usually does
not begin until the drug company has submitted the entire application to the FDA.
The Accelerated Approval process, which was first implemented in 1992, allows earlier
approval of drugs that treat serious disease and fill an unmet need based upon a
surrogate endpoint rather than a clinical outcome. This can considerably shorten the
time required prior to receiving FDA approval, since surrogate endpoints (markers such
52
as a laboratory measurement, or a physical sign used in clinical trials as an indirect

measurement of improvement) can be faster to measure while clinical outcomes such as
survival or symptom improvement can take much longer to identify. The FDA bases its
decision on whether to accept the proposed surrogate endpoint on the scientific support
for that endpoint. For example, instead of waiting learn if a drug actually can extend
the survival of cancer patients, the FDA might approve a drug based on evidence that
the drug shrinks tumors because tumor shrinkage is considered a good predictor of
increased survival.
Priority Review, which was also established in 1992 with PDUFA, is given to drugs
that offer major advances in treatment, or provide a treatment where no adequate
therapy exists. The goal for completing a Priority Review is six months, compared
with the 10 month goal of Standard Review. Priority Review status can apply both to
drugs that are used to treat serious diseases and to drugs for less serious illnesses;
however, the drug must have the potential to provide significant advances in treatment.
This could include increased effectiveness, reduced adverse reactions, greater patient
compliance or evidence of effectiveness in a new subpopulation, such as children.

As in Europe, U.S. regulators have focused some attention on easing the approval
process for so-called orphan drugs. These are medicines that address diseases
affecting fewer than 200,000 people in the United States or low prevalence is taken as
prevalence of less than 5 per 10,000 in the community. The class was formally
established in 1983 with the passage of the Orphan Drug Act. The act recognizes that
medical research and development of drugs to treat such diseases is financially
disadvantageous, so it rewards companies that do so with tax reductions and marketing
exclusivity on such drugs for an extended time (seven years post-approval).
Under the act, nearly 1,700 medicines have been designated orphan drugs as of 2007,
and 249 have been approved for use. In contrast, the decade prior to 1983 saw fewer
than ten such products come to market. In late 2007, the FDA and EMEA came to an
53
agreement whereby the same application could be used for both agencies, thereby
reducing the investment of time and money required of companies to apply for orphan
drug status. However, the two agencies continue to maintain separate approval
processes.
Decreasing FDA drug approvals

Despite ongoing attempts by the FDA to increase the availability of medicines to
consumers, there has been no real improvement in either Priority or Standard drug
approvals since 1995. As shown in Figure 2.4, both standard and priority approvals
have fluctuated, with no overarching trend from year to year.
However, when examined in six-year increments, the period from 1996 to 2001 had
significantly more approvals than the 2002 to 2007 period. With just 450 approvals
from 2002 to 2007 compared with 523 in 1996 to 2001, drug approvals fell by 13.9% in
this latter period as the number of years with 80 or fewer drug approvals became more
common than years with more than 80 approvals. During the 2002 to 2007 period, two
very high profile arthritis drugs (Mercks Vioxx in 2004 and Pfizers Bextra in 2005)
were removed from the market and allegations of inadequate FDA drug approval
mechanisms escalated to a new level.
54
Figure 2.4: U.S. drug approvals, 1995 - 2007
140
120
100
80
60
40
20
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Priority Approvals
Standard Approvals
Source: FDA
These withdrawals have contributed to a heightened focus on NMEs, to ensure that

molecules not previously approved are, in fact, safe and effective. As shown in Table
2.6, while the number of clinical trials conducted in the U.S. continues to rise, the
number of NMEs approved each year has declined since 2004. More importantly, the
ratio of NME approvals to clinical trials has decreased by 13.7% per year, indicating
that drug makers are working harder to win fewer approvals. The sharpest decline came
in 2007, when just 18 NMEs were approved but the industry conducted a record
number of clinical trials.
55
Table 2.6: U.S. New Molecular Entity (NME) Approvals, 2000 - 2007
Year
Number of U.S.
Clinical Trials
2000
2001
2002
2003
2004
2005
2006
2007
3,663
3,883
4,158
4,544
4,827
5,029
5,445
5,826
NME
Approvals
27
24
17
21
36
20
22
18
Approvals per
Clinical Trial
8.7
8.2
5.8
8.6
7.3
5.2
5.9
3.1
Source: FDA
In some areas, the FDA has become more conservative than the EMEA. In December
2007, for example, an FDA advisory panel voted against expanding Genentech's
blockbuster Avastin for use against breast cancer. According to trial data, the drug
hasn't been as effective in that disease as it has for colon and lung cancer, and it is
associated with bleeding, heart attack, and stroke. Based on the same data, however,
European regulators approved the new indication.
Industry has noticed this trend, and Novartis CEO Daniel Vasella, Schering-Plough
CEO Fred Hassan and former Wyeth CEO Bob Essner have all publicly spoken out
about that slowdown in approvals. Other experts believe that the FDA has raised the
bar significantly for drugs addressing diseases that already have treatment options,
claiming that the agency is looking for drugs that go above and beyond current
treatment options rather than merely offer patients and doctors another option.

Despite the FDAs aforementioned mandate to act on NDAs and BLAs in a timely
fashion, in practice this often translates not into approval but into requests for more
56
data. Given the ongoing allegations that FDA is approving drugs without solid proof of
safety, this trend is expected to continue, particularly for new molecular entities.
In 2007, the ratio of applications to approvals hit a 13-year low of 60%, compared with
76% in 2006. Drugs that were part of an entirely new molecular class were the hardest
hit, with FDA approving just 18 during the year. This is likely due to the increased time
required to evaluate products that are often more complex and not as well understood.
However, three-quarters of the new molecular entities (NMEs) cleared by the FDA in
2007 were approved on the first review cycle, representing a high for this decade and a
positive counterbalance to the record low number of NMEs approved.
The FDA will continue to issue Accelerated Approvals, but is unlikely to take the risks
it had in the past. In May 2003, for example, the FDA approved AstraZenecas Iressa,
an anticancer drug that inhibits an enzyme (tyrosine kinase) that appears to be
important to the growth of cancer cells. The Accelerated Approval was based upon a
Phase II study of Iressa as third-line therapy, because that data showed the drug caused
significant shrinkage in tumors in about 10% of patients. In June 2005, however, FDA
updated Iressas label to state that the medicine should be used only in cancer patients
who have already taken it and whose doctor believes it is helping them. New patients
should not be given Iressa because, as industry watchdog Public Citizen pointed out in
a petition to the FDA to remove Iressa from the market, a Phase III study demonstrated
that Iressa did not help cancer patients live longer.
For generics, FDA is continuing to enhance its approval process in response to a rising
influx of applications. FDA approved 682 generic drug applications in its fiscal 2007
year - a 30% increase compared with fiscal 2006. As of late 2007, the agency also had
a backlog of more than 1,300 drug applications, up from about 780 applications in
December 2005. To address these issues, the FDA announced several changes in
October 2007 designed to speed up the approval process for generic drugs. These
include:
57
Reviewing multiple applications for the same drug at the same time;
encouraging companies to submit more information using the Internet;
processing applications for generic drugs that have lost patent protection, rather
than putting them in line behind applications for other drugs that could be patented
for years.
In an effort to further assist the agency in expanding its ability to increase the
availability of low cost generic medicines, Congress approved a $6m increase in the
budget for the FDAs Office of Generic Drugs (OGD) in December 2007. The increase,
which was included in the 2008 omnibus appropriations bill, will be applied towards
accelerating product approvals. Presently, the median time to approve a generic
application is nearly 17 month. Generics represent 63% of all prescriptions dispensed
in the United States, but only 20% of all dollars spent on Rx drugs.

Although FDA is attempting to clear more novel drugs to market in an attempt to speed
consumers access to necessary medicines, the agency is simultaneously exercising
more caution when evaluating applications for drugs with higher known safety risks. In
this vein, FDA is asking for more data pursuant to applications for drugs that pose
heightened safety concerns. This is particularly true for classes of drugs, such as the
COX-2 inhibitors, with established risks.
Rising data requirements

Rising data requirements come in two forms: increasing complexity of drug
applications and growing requests from the FDA for additional data during the review
process.
58
While the average New Drug Application (NDA) submitted to the FDA contained
38,000 pages in the late 1970s, it now contains more than 100,000 pages. This is due in
large part to the greater number and larger sizes of clinical trials. As of early 2008,
approximately 100,000 clinical trials were underway around the world, involving at
least as many physician investigators and more than 2m participants. This is a
substantial increase from just a decade ago, when the number of clinical trials was less
than two thirds this level. Furthermore, patient volumes have risen by about 25% from
the early 1990s to more than 4,500 volunteers per NDA in 2007, according to the FDA.
It is now not uncommon for investigators to conduct very large scale trials involving
several thousand volunteers in multiple locations.
In addition, while the FDA had occasionally asked drug sponsors for further data, the
agency may now make multiple requests pursuant to several different areas. For
example, in August 2007, Pozen received its second approvable letter for the
company's migraine drug, Trexima. The first approvable letter was for potential
cardiovascular side effects from the combination of the two drugs that make up
Trexima, while the second inquired about an abnormality in a pre-clinical test that
checks the potential of the drug to cause cancer.
Therapeutic areas in which the FDA is particularly sensitive include those that have
recently been linked to safety issues, such as COX-2 inhibitors and hormone
replacement therapy products (HRT), as well as drugs that represent novel classes of
molecules.
Case study: hormone replacement therapy

Problems with HRT first came to light after the release of the Women's Health
Initiative (WHI) trial data in 2002, linking HRT with cardiovascular effects. The FDA
subsequently required the addition of black box warnings on all HRT products
prescribed in the U.S. and is now operating an increased scrutiny of hormone therapy
in postmenopausal women. This has resulted in the delay of two applications: Pfizers
Oporia and Procter & Gambles Intrinsa.
59
In September 2005, Pfizer received a non-approvable letter from the FDA for Oporia
for the prevention of osteoporosis. The product of a joint development program
between Pfizer and Ligand Pharmaceuticals, Oporia (lasofoxifene) is a selective
oestrogen receptor modulator (SERM) intended for the prevention and treatment of
osteoporosis in post-menopausal women. Preclinical studies showed Oporia binds to
estrogen receptors with an affinity comparable to that of 17beta-estradiol and, in bone,
duplicates many of the effects obtained following administration of estrogen. These
properties suggest efficacy in osteoporosis and this was confirmed in Phase II trials.
Compared with raloxifene, the leading SERM, Oporia appeared more effective in
improving spinal bone density in post-menopausal women. Long-term Phase II data
showed that the improvements in bone density are sustained after two years of dosing.
Compared with raloxifene, long-term administration of Oporia significantly improved
bone parameters, such as bone resorption and lumbar-spine bone mineral density.
However, (SERMs) are also known to increase the risk of venous thromboembolism
(VTE), an effect that is also associated with the use of other HRT products. In January
2008, Pfizers development partner, Ligand Pharmaceuticals, submitted a NDA for
lasofoxifene, which is now to be marketed under the tradename Fablyn.
In December 2004, Procter and Gamble suffered a similar first rejection for its
testosterone therapy patch, Intrinsa, to treat low libido in surgically postmenopausal
women. At that time, a 14-member FDA advisory committee for Reproductive Health
Drugs unanimously rejected the companys fast-track request for Intrinsa citing
concerns about off-label use and potential side effects. While the product is available in
France, Germany, Italy and the U.K., it is not currently approved for sale in the U.S.
Case study: Galvus

In February 2007, the FDA asked Novartis for additional safety data for Galvus, a drug
designed to address type 2 diabetes. Galvus is a new oral anti-hyperglycemic agent of
the dipeptidyl peptidase-4 (DPP-4) class of drugs. It inhibits the inactivation of
glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic peptide (GIP)
60
by DPP-4, allowing insulin secretion in the beta cells and suppression of glucagon from
the islets of Langerhans. In July 2007, the EMEA approved the drug.
The FDA, however, has delayed approval twice, requesting additional clinical data,
including proof the skin lesions and kidney impairments seen in an earlier animal study
have not occurred in humans. This requires a new study of Galvus to assess kidney
impairment, delaying approval by at least one year. At the time of the request, Galvus
had been studied in more than 7,000 clinical subjects.
Novartis first submitted the Galvus application to the FDA in January 2006 and in
March, the agency accepted the application for review. The NDA contained data from
approximately 2,800 patients treated for up to 12 months in duration, representing
about 1,350 patient years of exposure. Subsequent to this review, the FDA requested
further data, which Novartis provided in November 2006. The additional data
represented about 1,000 patient years of treatment experience with the drug, including
results from short- and long-term studies for periods of up to two years, both as a
monotherapy and in combination with other anti-diabetes medicines. The new data
provided additional support for the proposed dosing regimen and indications. They also
provided further evidence confirming data submitted earlier showing that skin findings
identified in a single primate species during a preclinical animal study had not been
seen in clinical studies with patients treated for type 2 diabetes. In combination with
the original data, they provide a total of more than 4,750 patients and 2,600 patient
years of experience with the drug for FDA review.
As of early 2008, Novartis continued to work with the FDA to collect further data on
the effects of Galvus on the liver. Galvus was approved in Europe in late 2007 and
launched in early 2008.
61

Consistent with the FDAs more conservative stance on drug safety, the agency is
expected to continue to delay approval of applications it deems risky, requesting more
data to support conclusions. This trend is unlikely to abate in the foreseeable future,
with ongoing public scrutiny and criticism of the FDAs ability to prevent unsafe drugs
from reaching the market. Furthermore, the continuing proliferation of technologies
enabling the collection, storage, retrieval and analysis of large volumes of clinical data
will make the provision of ever larger amounts of supporting data more feasible, so that
industry will be able to comply with FDA requests from a technical perspective.
Biosimilars
Biosimilars, or generic versions of biological drugs, are an area in which the FDA
significantly lags the EMEA. While the EMEA has recently established an approval
pathway that clarifies the regulatory process by which biosimilars can be approved, the
FDA has not yet established such a process. Because biologic products are
scientifically distinct from non-biologic drugs, such that even very small differences in
the raw materials and manufacturing processes used can significantly alter a biological
therapy's safety and effectiveness, a distinct regulatory pathway is required to ensure
that a biosimilar will offer safety and efficacy comparable to its reference product. As
of early 2008, there was no such pathway in place. Because of this, manufacturers are
unable to submit applications to the FDA to market new biosimilar products and
consumers effectively have no alternative to the approved branded biologicals.
The future of biosimilar approvals

Although rapidly rising expenditures on biologicals resulted in three separate bills in
2007 proposing a statutory pathway for the approval of biosimilars, many in the
62
industry remain skeptical that legislation will be passed. Because the bills all address a
range of associated issues including market exclusivity and patent litigation, a major
hurdle remains the intense competition between innovator companies and generic
manufacturers. While the FDA is expected to eventually follow the precedent set in
Europe and Canada, which recently passed legislation to approve biosimilars, an
acceptable U.S. law will likely take several more years to develop. The U.S. legislation
is likely to closely follow the Canada legislation, reflecting a general similarity in the
countries regulatory regimes.
Canadian biosimilars legislation

In March 2008, Health Canada published draft guidelines for pharmaceuticals seeking
to gain approval for biosimilars or as they are called in Canada, "subsequent entry
biologics" (SEBs). Under the proposal, sponsors seeking clearance for biosimilars, on
patent expiry of the original drug, would be permitted to incorporate publicly available
safety and efficacy data in their regulatory submissions.
The regulator stated that eligibility for the SEB pathway hinges on the ability to
demonstrate similarity to a suitable reference product. However, compounds accepted
for review would not automatically be designated as substitutable for previously
approved medications, as this designation would be decided on a case-by-case basis.
Certain types of biologics would be excluded from this pathway; for example, biologics
produced in transgenic organisms rather than through in vitro cell culture as transgenic
production is deemed a sufficiently unique method of manufacture to warrant a full
biologics review. In addition, the ability of physicians to prescribe either the SEB or
the reference product would be determined separately from any approval ruling
covered by the draft guidelines.
Health Canada's proposal states that SEBs would not be cleared for the full range of
indications for which the reference product is approved unless data establishing
63
efficacy in each application is provided. It also stipulates that comparative

pharmacokinetic and bioavailability studies must be carried out to demonstrate the
similarity of the SEB and reference product, and that the resulting data should form the
basis of a new monograph for each SEB under review.
Rx-to-OTC switches
The switch of prescription (Rx) medicines to over-the-counter (OTC) status is a wellestablished mechanism to increase access to remedies deemed appropriate for usage
without direct physician supervision. In the U.S., more than 90 drugs have been
switched from prescription to OTC status since September 1976.
Switching drugs offers several key benefits to consumers and health care payers.
Because OTC products are more readily available and often less expensive (even
compared with health care plan co-payments) than Rx medicines, they offer greater
access to consumers. Equally important, OTC products generally shift the cost burden
from health care payers to patients, removing the costs of expensive prescription drugs.
In addition to saving on the cost of the switched drug, many plans also implement
disincentives for participants to use similar products that address the same condition,
creating even greater savings. This may involve removing products from formularies
and/or raising the co-payments for them. Rising pressures to contain health care
spending in the U.S. are therefore making switches increasingly attractive.
In order to be appropriate for switch, the FDA generally believes that an Rx drug
candidate should:
Address a condition that need not be diagnosed by a physician;
not require ongoing monitoring by a physician;
not pose a significant risk of unacceptable side effects;
64
possess a dosing regimen and/or labeling instructions that patients can understand.
Drugs that address asymptomatic conditions such as hypertension, osteoporosis, ulcers,

etc. are therefore not good switch candidates, although it should be noted that the rising
availability of novel home-use diagnostic tests, such as those for high cholesterol, and
increasing public screening initiatives are making it easier for consumers to identify
some conditions that in the past have required physician diagnosis. However, safety
concerns particular to a certain drug that either require ongoing medical monitoring of
use or pose a relatively high risk of adverse reactions may render a product completely
unacceptable for OTC distribution. Similarly, patients must be able to understand how
to take the drug, and FDA has, on several occasions, delayed switch approvals pending
labeling revisions. Because of this, injectable drugs are generally not considered switch
candidates.
In addition to these criteria, many people believe that the best switched drugs address
conditions that are non-chronic. That is, the condition resolves over a certain time
frame rather than lasting throughout the patients life. This reduces the risk that the
condition could worsen and require another type of treatment or that prolonged use of
the drug could result in adverse reactions. However, several of the drugs recently
switched address conditions that are, for many sufferers, chronic. These include
Claritin for allergies and Prilosec for recurring heartburn. Table 2.7 shows products
switched in the U.S. between 1995 and 2007.
Although a products manufacturer usually discontinues a prescription product that is

switched to OTC use, in some cases a manufacturer may retain dual regulatory status,
as AstraZeneca did for Prilosec. The OTC product is indicated for heartburn, a
condition that can be readily identified by consumers, while the Rx product is indicated
for ulcers, a condition related to the presence of H. pylori bacteria that must be
diagnosed by a physician. Although the formulation (capsule vs. tablet) differs between
the Rx and OTC products, both contain exactly the same amounts of active ingredient.
Such dual status can extend the market exclusivity period of the OTC product when it
65
carries a different indication on its label than the original prescription drug, but can risk
companies spreading resources too thinly across the OTC and Rx markets.
These last five switches, which all occurred in 2006 and 2007, as well as the switches
of Schering-Ploughs Claritin in 2002 and Procter & Gambles Prilosec in 2003,
represent switches of new types of products with more effective mechanisms of action
than previously available in the OTC market.
Table 2.7: Key U.S. Rx-to-OTC switches, 1997 - 2007

Brand
Company
Type of Product
Switch date
Nasalcrom
Nizoral AD
Vagistat 1
Monistat 1
Lamisil AT
Habitrol
Lotrimin Ultra
Claritin/Claritin D
Prilosec OTC
Pepcid AC 150
Zantac 150
Alaway
Zaditor
Plan B
Miralax
Alli
Pfizer
Johnson & Johnson
Bristol-Myers Squibb
Johnson & Johnson
Novartis
Novartis
Schering-Plough
Schering-Plough
Procter & Gamble
Johnson & Johnson-Merck
Pfizer
Bausch & Lomb
Novartis
Barr Laboratories
Schering-Plough
GlaxoSmithKline
Allergy reliever
Antidandruff medication
Feminine yeast infection
Feminine yeast infection
Fungicide
Smoking cessation
Fungicide
Allergy reliever
Antacid
Antacid
Antacid
Eye allergies
Eye allergies
Emergency Contraception
Laxative
Obesity reducer
1997
1997
1997
1998
1999
1999
2001
2002
2003
2003
2005
2006
2006
2006
2007
2007
New OTC drug categories

During the past several years, several new OTC drug categories have been created
through Rx-to-OTC switches, indicating FDAs increasing willingness to approve
novel medicines for OTC usage. This has been the result of various factors including:
Rx patent expirations that forced drug makers to seek new markets for products
facing imminent competition;
industry pressure to lower prices on high usage drugs;
66
opportunities afforded by the OTC market that could enhance sales for drugs
unsuccessful in the Rx market.
Each of these switches involved prolonged consideration by the FDA of the

appropriateness of OTC sale and stretched the agencys position on switch approvals.
These new categories of drugs, including antihistamines, emergency contraceptives,
hyperosmotic laxatives, ophthalmic allergy solutions, proton pump inhibitors and
weight loss medications, are discussed in more detail in the subsections that follow.
In general, when a manufacturer switches a new class of drug to OTC usage, the drug
is granted three years market exclusivity. This allows a manufacturer time to build
brand equity before competitors, and particularly low cost private label brands, enter
the market.
Antihistamines
In the U.S., the nonsedating antihistamine class of OTC medications was created in
2002 with the Rx-to-OTC switch of Schering-Ploughs Claritin. This occurred
following a protracted debate between industry and the FDA regarding whether or not
the agency could force a manufacturer to switch a prescription drug.
In 1998, the FDA was petitioned by managed care organization WellPoint Health
Networks to force three nonsedating antihistamines (Claritin, Pfizers Zyrtec and
Sanofi-Aventiss Allegra) to switch to OTC status as a means to contain spending on
these expensive but heavily used products. This was the first time that a third party
other than the manufacturer petitioned for a switch, and occurred in an effort for
WellPoint to reduce its spending on the highly popular drug. In its petition, Wellpoint
argued that the switches were appropriate since:
All of the drugs met the FDAs four switch criteria;
FDA had an OTC monograph detailing the safe nonprescription use of

antihistamines;
67
the non-sedating prescription antihistamines were actually safer for consumers to

use without physician supervision than many of the 100 or so first generation
antihistamines then sold over-the-counter. This is because the first-generation
products that have a significant sedative effective which has been shown to cause
drowsiness and impaired function similar to that resulting from high blood alcohol
levels. The non-sedating antihistamines, however, do not cause this effect and thus
offer safer use;
OTC products in general are more convenient to use than Rx medications and thus
are more frequently used. Moving the three products to nonprescription status
would therefore be consistent with Americans reliance on OTC medications.
Furthermore, Claritin was being sold in several other markets on a nonprescription

basis, having switched in seven countries outside the U.S. including Canada and the
U.K. since 1988. In April 2002, an FDA advisory panel unanimously voted to allow
Claritin to be sold over the counter for the treatment of hives of unknown cause. The
committee also indicated its intention to broaden the indication to include general hives
once sufficient data was presented.
After months of resistance, during which time two other manufacturers indicated their
intention to introduce OTC versions of Claritin, Schering-Plough eventually decided to
pursue the Rx-to-OTC switch of the product. In March 2002, the company filed
documentation in support of a switch, and the FDA gave approval in November 2002.
The product hit retail shelves in December 2002. Claritin became the largest selling
single-branded Rx-to-OTC switch in U.S. history, recording manufacturers sales of
$381 million in its first full year on the market. Table 2.8 shows key events in the
chronology of the switch.
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Table 2.8: Key events in the approval of OTC nonsedating antihistamines

Date
Event
July 1998
WellPoint submitted a Citizens Petition to the FDA asking to switch

Claritin, Allegra, and Zyrtec from Rx-to-OTC status.
January 1999
The FDA sent WellPoint a letter stating that the issue is very complex and
that it needs additional time to review the matter.
April 2000
USA Today published an extensive report on the switch, stimulating public

interest in the issue.
June 2000
FDA held a hearing on OTC conversions in general.
May 2001
FDA held a hearing on the WellPoint petition and approved the switch.
November 2001
Johnson & Johnsons McNeil Consumer Healthcare filed an NDA with the
FDA in November 2001 for an OTC loratadine product.
January 2002
Wyeth filed an NDA to produce an OTC loratadine product. ScheringPlough subsequently filed lawsuits against J&J and Wyeth to delay an FDA
decision on whether or not to allow the forced switch. An FDA decision to
allow the switch would likely result in a lawsuit from Schering-Plough
against the agency. Now the agencys decision is delayed by patent
litigation issues brought forward by the lawsuits.
April 2002
Claritin
Schering-Plough filed an NDA to sell Claritin OTC. FDA approved

for OTC sale for treatment of hives and seasonal allergies.
November 2002
FDA approved Schering-Ploughs Claritin for OTC sale. Johnson &

Johnson abandoned its plans to launch an OTC version of Claritin.
December 2002
Claritins U.S. patent expired. Schering-Plough launched OTC Claritin.
January 2003
at
FDA approved Wyeths Alavert loratadine product, a value brand offered

a lower retail price than Claritin, for OTC sale.
September 2003
FDA approved Leiners private-label loratadine for OTC sale.
Emergency contraceptives
Emergency contraception represents a new approach to the prevention of pregnancy.
Unlike other forms of birth control which are designed to be utilized prior to
intercourse, emergency contraception is practiced after intercourse occurs to prevent
69
subsequent conception. In August 2006, after a protracted debate within the industry,
the FDA issued allowed Barr Laboratories Plan B to become available without a
prescription, as long as the product is stored behind the pharmacists counter. Plan B
became the first OTC emergency contraceptive in the United States.
In 2000, the American Medical Association recommended that emergency

contraception be available over-the-counter in the U.S. and in December 2003, an
advisory committee to the FDA issued a similar recommendation for Plan B. However,
in May 2004 the FDA took the unusual position of prohibiting OTC sale of the drug,
despite the committees strong 23 to 4 vote that it should be sold OTC. The FDA
claimed that this was due to limited experimental data on the effects of such pills on
girls under 16 years of age, but critics have accused the FDA of basing the decision on
political pressure. At this time, the agency ruled that Barr could submit an amended
application for approval if it specified dual status that would make the product over the
counter for older women and by prescription only for younger women.
In July 2004, Barr submitted the updated application, but FDA failed to make a
decision. This resulted in a petition from Barr, to which the FDA responded in August
2005, concluding that the available data was sufficient to support the safe use of Plan B
as an OTC product for women 17 years of age or older, but that there were still
unresolved issues relating to usage by women under the age of 17. Specifically, the
FDA said it needed more time to consider the viability of simultaneously marketing the
product as both an Rx drug (to under-17-year-olds) and an OTC drug (17 and older).
The issue of Plan B became increasingly controversial for lawmakers. In November

2005, HR 4229 was introduced in the U.S. House of Representatives, requiring the
FDA to make a decision on the switch. Many senators said they would not vote to
approve the nomination of Andrew von Eschenbach, the FDA's acting head, unless the
Plan B matter was resolved. The tension was further inflamed by various public interest
groups. For example, Concerned Women for America, among the most vocal of Plan
Bs opponents, asked the FDA to reject Barr's revised application, claiming that rapists
could slip Plan B pills to young women to hide their crimes. Others speculated that
70
women could misuse Plan B, using it regularly as a conventional contraceptive after

sex rather than in emergency situations when they were not able to utilize ordinary
contraceptives.
By mid 2006, eight states including California, Washington, Alaska, Hawaii, New
Mexico, Maine, New Hampshire and Massachusetts had passed laws allowing trained
pharmacists to dispense emergency contraception without a doctor's prescription.
Furthermore, most health and medical organizations backed the approval of Plan B for
OTC sale and several prominent organizations such as the Association of Reproductive
Health Professionals, Planned Parenthood, the American Medical Association, and the
American College of Obstetrics and Gynecology issued statements that OTC Plan B
could reduce the number of abortions performed each year.
In August 2006, the FDA approved the Rx-to-OTC switch of Plan B, and the product
became available on retail shelves in mid November. Plan B carries a dual label, as an
OTC product for consumers 18 years of age and older and prescription-only for women
17 and younger, replacing the Plan B prescription-only product that had previously
been marketed in the United States. Because of this dual labeling, the product can be
sold only in retail pharmacy outlets from behind the pharmacy counter and under the
supervision of a pharmacist. At the time of the switch, Plan B was available in 100
countries and a prescription was not necessary in one third of those countries. This
demonstrates that regulators in these countries had determined that Plan B could be
used safely and effectively by consumers without direct physician supervision.
Hyperosmotic laxatives
In October 2006, FDA approved an OTC version of Braintrees prescription Miralax.
This represented the first Rx-to-OTC switch of a laxative in more than 30 years, and
introduced a new type of laxative to the OTC market.
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First approved for sale as an Rx drug in February 1999, Miralax hyperosmotic laxative
was the first new Rx laxative in 23 years. With polyethylene glycol 3350 as an active
ingredient, Miralax became the market leader largely due to its ability to gently but
effectively eliminate constipation. Miralax brings the body back to its natural rhythm
by using the body's own water to gently increase the frequency of bowel movements
and soften the stool so it is easier to pass. According to a study published in a 2001
issue of Home Health Care Consultant, 70% of consumers who tried Miralax preferred
it to their regular laxative. Miralax also scored high in surveys, with the American
College of Gastroenterology giving the drug a Grade A Recommendation in 2005.
(No other drug now sold over the counter received this high a score from the ACG).
However, generic competition to Miralax emerged in 2004 with the FDA approval of
Schwartz Pharmas Glycolax. Upon notification of the filing of an Abbreviated New
Drug Application (ANDA) with the FDA in 2003, Braintree sued Schwartz for patent
infringement, but dropped the suit the following year. A number of other generics
companies including Teva and Par subsequently gained approval for polyethylene
glycol 3350 and in 2006, total U.S. sales of polyethylene glycol 3350 NF powder for
oral solution were reported in the press at $153 million. This resulted in a significant
decline in sales which Braintree decided to address through an Rx-to-OTC switch.
Ophthalmic allergy medications

In late 2006, two ophthalmic products were switched to OTC usage: Bausch & Lombs
Alaway and Novartiss Zaditor. Both contain ketotifen fumarate as an active ingredient
and are indicated for the temporary prevention of itchy eyes due to allergic
conjunctivitis or eye allergies.
In 2004, generic drug maker Apotex filed for approval of a generic version of Zaditor
in the U.S. Zaditor was covered by a patent and Novartis subsequently sued Apotex for
patent infringement but withdrew the lawsuit shortly thereafter. Apotex introduced its
generic ketotifen fumarate in 2006, shortly after its approval in May of the year. Like
72
many other Rx-to-OTC switches, this introduction of a generic product provided the
impetus for Novartis to seek approval to move the drug to OTC status.
In August 2006, law firm Rakoczy Molino Mazzochi Siwik submitted a Citizen
Petition on behalf of an unnamed client to the FDA requesting that the agency deny
Novartiss switch application. The petition claimed that Zaditor was not an appropriate
candidate for OTC sale for the following reasons:
Because allergic conjunctivitis easily can be confused with bacterial or viral

conjunctivitis, it is crucial that a patient experiencing symptoms of allergic
conjunctivitis obtain a proper diagnosis before receiving treatment. A mistaken
diagnosis could result in a patient administering the wrong medication. In the worst
cases, this could lead to significant or permanent damage to the eyes;
the availability of an OTC version of ketotifen fumarate may give rise to its overuse
during self-medication. This could lead to the worsening of symptoms associated
with allergic conjunctivitis, rather than their treatment.
The petition did not persuade the agency to retain the drugs Rx status and in October
2006, the FDA approved a switch of the full Rx strength formulation of Zaditor.
Because the dosage and indications were identical for the Rx and OTC products,
prescription Zaditor as well as generic versions of the Rx drug were removed from the
market when OTC Zaditor launched in early 2007. Two months later, FDA also
approved an Rx-to-OTC switch of Alaway. Neither drug had previously switched in
any other market.
Proton pump inhibitors

Proton pump inhibitors (PPIs) are used to treat heartburn, acid reflux, and ulcers. They
prevent the stomach from producing the gastric acid that can be refluxed back into the
esophagus or that can create ulcers in the lining of the stomach or small intestine by
shutting down the tiny acid pumps in the stomach that produce the acid. They also help
heal the esophagus when it has been damaged by gastric acids.
73
In mid 2003, FDA approved the Rx-to-OTC switch of AstraZenecas Prilosec for
treatment of temporary heartburn. Representing the first switch of a PPI, the product
would be sold as Prilosec OTC by Procter & Gamble, and offered to consumers in a
prescription-strength 20mg dosage. Novartis and Mylan subsequently announced that
they would introduce generic versions of Prilosec indicated for gastroesophagal reflux
disease (GERD), ulcers, and certain other gastrointestinal conditions for which the
OTC product had not been approved. In September 2003, Prilosec OTC began shipping
to stores.
The objective behind the switch was to mitigate steep sales declines expected from the
blockbusters 2003 patent expiration. Although Prilosec recorded U.S. prescription
sales in 2003 of more than $3.7b, generic competition priced at a 50% to 70% discount
was expected to erode sales of the drug to less than $500m. An Rx-to-OTC switch
offered a way to mitigate this decline somewhat, by capturing sales in the OTC market.
While the prices of nonprescription drugs are considerably lower than their Rx
counterparts, a switch nonetheless offers some potential to stem Rx sales losses.
In June 2002, the FDAs Nonprescription and Gastrointestinal Drugs Advisory

Committees ruled that AstraZeneca and Procter & Gamble had provided sufficient
information to support the approval of nonprescription Prilosec for prevention of
frequent heartburn in a 20mg dose for a 14-day therapy pending certain labeling
changes. Procter & Gamble sought permission to market OTC Prilosec for the common
type of heartburn that occurs two or more days a week but did not seek approval for
certain other indications including GERD. At the time of the application, Prilosec was
(and still is) available over the counter in Sweden for this indication. Two months later,
FDA said it would clear an OTC version of Prilosec once Procter & Gamble
demonstrated that consumers could understand the products label. This data was
subsequently provided and in June 2003, the switch was formally approved.
Over the next several years, it is highly likely that at least three proton pump inhibitors
will switch to OTC usage. These include TAP Pharmaceuticals Prevacid, Eisais
Aciphex and Schering-Ploughs Zegerid:
74
In 2007, TAP transferred OTC marketing rights to the drug in the U.S. to Novartis;
Eisai has publicly stated that it is considering an OTC version of the drug to launch
in the U.S. in 2008;
Zegerid manufacturer Santarus has transferred U.S. OTC marketing rights to the
drug to Schering-Plough.
Weight loss medications

In June 2007, Alli became available in the U.S. as the first FDA-approved product for
weight loss and maintenance of weight loss. Marketed by GlaxoSmithKline, the drug
represents a low dose version of Roches Xenical and was introduced as a means to
both address Xenicals imminent patent expiration and leverage expanded
opportunities in the OTC market.
Cleared to market by the FDA in 1997, Xenical is indicated for obesity management,
including weight loss and weight maintenance in conjunction with a reduced-calorie
diet, and for reduction of the risk of weight regain after prior weight loss in patients
with a body mass index (BMI) of 30. The drug, whose active ingredient is orlistat,
inhibits the reuptake of serotonin, norepinephrine, and dopamine, thereby increasing
the satiety-producing effects of serotonin to act as an appetite suppressant. It works in
the digestive system to block about one-third of the fat in food from being digested and
absorbed into the body. The undigested fat cannot be absorbed and the body eliminates
it as waste. The remaining fat consumed is digested, therefore for optimum results,
patients taking Xenical must adhere to a reduced fat diet.
This need for dietary modifications, along with Xenicals unpleasant side effects of oily
stool and flatulence, limited its success as an Rx product. Physicians were unable to
provide adequate education and support, resulting in Xenicals U.S. sales falling to an
estimated $60m in 2006. Furthermore, Xenicals U.S. patent was scheduled to expire in
2009.
75
Roche therefore divested the U.S. OTC rights to Xenical to GlaxoSmithKline, an

experienced marketer of OTC products with experience switching drugs from Rx to
OTC use. Glaxo had long been interested in the obesity market, having several
development programs for prescription obesity medications. The divestiture occurred
concurrently with Roches sale of its Consumer Health Group. The companies worked
jointly on a lower dose OTC formulation of Xenical, which was named Alli. This name
was reported selected because the product is supposed to be "allied" with a weight-loss
program. The low-dose, 60mg formulation of Xenical would be switched while the
historic 120mg version of the drug would remain in prescription form. (The U.S.,
unlike some other countries, allows a leave-behind Rx version of a drug after an
OTC switch). A lower dose OTC product would allow GlaxoSmithKline to
differentiate from the prescription leave-behind.
In mid 2005, GlaxoSmithKline filed an application with the FDA to market ALLI and
in January 2006, an FDA advisory committee recommended the switch in an 11-3 vote.
This occurred despite the protests of consumer watchdog Public Citizen. The group
called the approval "the height of recklessness, citing studies associating Xenical with
precancerous lesions of the colon. However, at the time of the switch application,
Xenical had switched in Australia, creating a precedent for safe OTC use in the United
States. The drug is also available on a nonprescription basis in the U.K.
Switch rejections
Although the FDA has shown a rising willingness to approve new types of medications
for nonprescription use, the agency remains cautious in certain areas. Cholesterol
reducing statins remain a key, and high profile, class of drugs that the FDA has yet to
approve for nonprescription usage.
76
Statins
The FDA has a long history of rejecting Rx-to-OTC switch applications for statins.
This history dates to 2000, when Merck and Bristol-Myers Squibb submitted
applications to switch Mevacor and Pravachol, respectively.
In July 2000, an FDA advisory panel recommended against OTC status for 10mg
Mevacor in an 11 to 1 vote. Merck had proposed an indication for treatment of men 40
years of age or older and post menopausal women who did not have diabetes or
previous cardiovascular disease whose total-C levels were 200 240 mg/dl and/or LDL
levels were above 130 mg/dl. The panel was concerned that patients did not seem to
understand cholesterol well enough to self-medicate, and there was no guarantee
patients would check their blood to see if they were responding to treatment. They also
believed there would be no significant benefit to a nonprescription version of the drug.
A switch application for Pravachol, with identical claims, was rejected for the same
reasons.
In January 2005, FDAs Nonprescription Drugs Advisory Committee and its

Endocrinologic and Metabolic Advisory Committee voted against the Rx-to-OTC
switch of Mevacor for a second time. Concerns from the committee were different than
they were in 2000, although the dissenters continued to hold a strong 20 to 3 position.
Merck proposed labeling the 20mg OTC drug for use in individuals with low to
moderate risk of hypercholesterolemia and coronary heart disease. The company also
proposed that OTC Mevacor would be intended for use in men over age 45 and in
women over age 55. The committee expressed concern about the potential for the drug
to cause birth defects in pregnant women. The group was also concerned whether
consumers would appropriately self-select the medication and self-manage their
condition with visits to physicians at appropriate intervals. Concerns also included the
lack of a behind-the-counter (BTC) class of drugs in the United States. Some
committee members stated that they would have voted in favor of the switch hands
down if there were a BTC class of drugs in which the drug could be sold.
77
An OTC version of Mevacor was rejected for a third time in December 2007. The
application was denied by a vote of 10-2 on concerns that the drug could be misused if
taken without consulting a medical professional. In this application, Merck proposed
the sale of 20mg Mevacor on an OTC basis, making it available to all consumers. The
company did not propose BTC sale, although Mevacors successor, Zocor, was
successfully switched from prescription to BTC status in the U.K. in 2005. Merck
continued to emphasize that its interest was in broad OTC sales, possibly because
Zocor Heart-Pro failed to achieve strong sales in the U.K. with limited availability
behind pharmacy counters.

Over the next several years, reclassifications of medicines from prescription to
nonprescription status are expected to increase as more and more blockbusters lose
patent protection and become subject to low cost generic competition. Given the FDAs
recent willingness to make new classes of medicines available on a nonprescription
basis, provided that marketers can demonstrate to the agencys satisfaction that the
drug can be used safely and effectively by the public, it is likely that many more
switched products will enter the marketplace. A greater selection of efficacious
medicines on a nonprescription basis benefits many sectors of the healthcare industry
by offering:
Easier consumer access to products;
lower drug costs for the 90m uninsured or underinsured;
reduced prescription drug costs for healthcare providers;
decreased backlog of patients seeking prescriptions from physicians.
However, many potential switch candidates represent more complicated products, that
address chronic, asymptomatic conditions difficult for consumers to self-diagnose. To
78
facilitate safe, nonprescription usage of such products, the FDA is currently

considering the formal creation of a behind the counter (BTC) class of drugs. As
discussed below, this class would presumably operate in a manner similar to the U.K.s
P class.
Creation of a pharmacist dispensed class

Discussion and debate about the relative advantages and disadvantages of a behind-thecounter (BTC) class has continued for many years in the U.S. Such a class would
represent a midway point between prescription (Rx) and over-the-counter (OTC)
medicines, wherein a physicians examination and recommendation would not be
required for purchase but consumers would nonetheless need to ask their pharmacist
for the product. The pharmacist would then be responsible for patient screening and
education. Unlike OTC remedies which are available on store shelves, BTC products
would be kept behind pharmacy counters. Some nonprescription medicines are already
sold this way: Barr Laboratories Plan B emergency contraceptive, which was switched
from Rx status on the condition that it be kept behind pharmacy counters; and cough
and cold medicines containing pseudoephedrine (PSE), which were moved behind the
counter in 2006 after they were linked to the illegal manufacture of methamphetamine.
However, the formal creation of a BTC class would presumably enable the Rx-to-OTC
switch of a greater number of products.
In March 2007, FDA Commissioner Andrew C. von Eschenbach, M.D., told industry
executives at the Consumer Healthcare Product Association's annual executive
conference that FDA and industry should immediately begin pursuing the development
of a regulatory process for a BTC class of drugs. Such a class, said von Eschenbach,
would increase consumer options and access to health care products and include
medications that could be available without a prescription or medical evaluation, but be
delivered in the context of guiding, directing and instructing patients about their use. It
could include, he said, products, drugs, biologics and/or devices that may require more
than the consumer's ability to understand a label to ensure appropriate selection. A
BTC class, therefore, would bring more flexibility to the heath care service
79
marketplace by adding an educational component for consumers through pharmacists'

guidance on products previously available only by prescription.
When asked about his projected time table for the creation of the third class, von
Eschenbach indicated he believed that the development process should begin as soon as
possible. However, he also stated that FDA needs to determine whether it currently has
authority to create a third class. This would involve and analysis of what would be
required from both regulatory and legislative perspectives. Furthermore, enabling
legislation would probably be required prior to rulemaking.
Marketing withdrawals are intended to prevent unsafe drugs from use and may be
either temporary or permanent. Temporary recalls often involve selected lots of a
particular drug that experience problems in distribution or manufacturing. These may
include a variety of issues such as subpotency, stability data that does not support a
drugs expiration date, dissolution failure, label mix-ups, the presence of a foreign
substance in the product, or pH failures. Between 1995 and 2007, FDA issued between
175 and 400 recalls of prescription drugs each year, of which more than 90%
represented temporary recalls. For example, in November 2007 the FDA announced
that sales of Bayers anti-bleeding drug Trasylol would be suspended temporarily while
investigations continued about whether Trayslol is linked to a higher risk of death than
competing heart surgery drugs. For the remaining 10% of cases, drugs were completely
withdrawn from the market. These cases are significantly more serious and can often
have dramatic effects on a drug makers position in the marketplace. Direct effects
include loss of sales of the affected product and resulting financial impact while
indirect effects include public perception of the company, loss of shareholder value and
flight of talent.
However, pressure from consumer groups to withdraw drugs that have been linked to
serious side effects remains strong. As of early 2008, for example, Public Citizen listed
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212 approved medications on its Worst Pills list, and continued to recommend the
market withdrawal of several products including Abbotts Meridia for weight loss and
GlaxoSmithKlines Avandia for diabetes.
Neither the incidence nor the size of FDA marketing withdrawals has substantially
increased over the past several years. In 2007, for example, the withdrawal of
Novartiss Zelnorm for irritable bowel syndrome (IBS) represented the largest market
withdrawal of a drug, even though U.S. sales in 2006 were just $488m. This compares
with the 2004 withdrawal of Vioxx, which had recorded sales of $2.5b in the prior
year. Nonetheless, manufacturers are increasingly cautious with applications and
withdrawing those that are repeatedly denied. This appears to be an attempt to prevent
costly market withdrawals after commercialization has already begun.
In some cases, drug makers withdrew U.S. marketing applications for products that
were already approved overseas. For example, in June 2007 Sanofi-Aventis pulled the
application for its obesity drug Zimulti, after a FDA advisory panel recommended that
the drug not be approved due to Zimultis link with suicidal thoughts and behavior.
However, the drug was approved in Europe in mid 2006 under the name Acomplia.
Later in the year, the FDA rejected Wyeth and Solvay Pharmaceuticals' schizophrenia
drug, bifeprunox. Reasons for the rejection appear to focus on one patient who died
while participating in one of several very large clinical trials. Similarly, Eli Lilly was
granted European approval for Yentreve for the treatment of moderate to severe stress
urinary incontinence in women in August 2004. The FDA had issued an approvable
letter for the drug in August 2003, but Lilly and its marketing partner, Boehringer
Ingelheim, withdrew the drug from FDA consideration in early 2005 after FDA
requested details on the drugs effect on QTc prolongation (heart conduction
abnormality) and drug-drug interactions. In February 2006, Lilly officially announced
that it would abandon trying to sell a stress urinary incontinence drug in the U.S. even
81
though Yentreve was available in 38 foreign markets. Table 2.9 shows key recent
withdrawals of U.S. marketing applications.

In light of the FDAs more conservative position on drug safety, it is likely that
products will continue to be held to a high degree of accountability. This will result in
ongoing scrutiny of marketed products and where these products are linked to safety
risk, marketing withdrawals. In this climate, manufacturers are expected to continue to
support only the strongest new product applications, withdrawing those that become
subject to very intense levels of investigation.
Table 2.9: Recent withdrawals of U.S. marketing applications, 2002 - 2007

Product
Company
Application
Withdrawal date
Fuzeon Biojector
Satraplatin
Acomplia
Entereg
HIV injectable
Prostate cancer
Obesity
Constipation
October 2007
July 2007
June 2007
April 2007
Zensana
Roche, Trimeris
GPC Biotech
Sanofi-Aventis
GlaxoSmithKline,
Adolor
Hana Biosciences
March 2007
Lo Seasonale
Barr Laboratories
Yentreve
Eli Lilly and

Boehringer Ingelheim
Eli Lilly and
Boehringer Ingelheim
Supergen
Nausea caused by
cancer treatment
Extended cycle oral
contraceptive
Stress urinary
continence
Stress urinary
continence
Pancreatic cancer
Cymbalta
Orathecin
April 2006
March 2005
January 2005
January 2005
Conclusion
Since the 2004 market withdrawal of Mercks Vioxx and resulting public safety
concerns, the U.S. FDA has adopted a considerably more conservative stance toward
82
drug approvals. With fewer approvals (especially for new molecular entities), denials
of approvals for drugs already approved outside the U.S., and increasing requests for
more clinical information, the agency is attempting to prevent further embarrassing
recalls of high profile medicines. At the same time, however, the FDA is increasing
access to products have already been validated in the marketplace. In this regard, it is
attempting to reduce approval times for generic medicines and is increasingly
switching Rx products from classes not previously available over-the-counter to
nonprescription use.
83
84
CHAPTER 3

EMEA
85
Chapter 3

EMEA
Summary
concerns will constrain development.
In Europe as in the U.S., increasing reports of adverse drug reactions, expanding

usage of products obtained over the Internet and associated issues with
counterfeiting are creating imperatives for heightened drug safety testing.
The EMEA created a set of Scientific Advisory Groups in 2006 to provide greater
oversight for all products during both the approval and post-marketing periods,.
The EMEA has not recently made substantive official changes to its overall
standards for drug approval. On case by case basis, however, European regulators
appear to be exercising more caution in granting approvals.
In an effort to bring needed medicines to market more quickly, the EMEA has
been attempting to reduce the time it spends reviewing marketing applications.
After a slight increase in overall review time in 2005, review times were
significantly reduced in 2006 for centralized procedures.
In July 2006, the EMEA implemented a new review system to speed the approval
of innovative drugs that respond to unmet medical needs or constitute a
significant improvement over incumbent market standards.
To streamline drug testing and eliminate the collection of unnecessary clinical

data, the EMEA has relaxed requirements to for pediatric trials for certain
products.
Despite improvements in processing speed, the EMEA is reportedly approving

fewer products than the FDA.

approval structure in place than the FDA and in fact, Europe is quickly becoming
the global center for the development and production of biosimilar medicines.
86

Like the U.S. drug approval process, the European process to approve human
medicines for use relies upon the evaluation of manufacturer-provided data to assess
safety and efficacy. However, while the U.S system offers only one route to approval
though clearance by the FDA, manufacturers seeking European approval can submit
test data either through the European Medicines Agencys (EMEA) centralized process
or use the Mutual Recognition Procedure (MRP) for evaluation by regulatory
authorities in any one of the EUs 27 member countries.
History of European drug regulation

Present European Community pharmaceutical legislation dates to 1965 with the
publication of Directive 65/65/EC, whose stated purpose was to safeguard public health
in a way that does not hinder the development of the pharmaceutical industry. This was
a response to the worldwide thalidomide tragedy when thousands of babies were born
with limb deformities following the administration of the drug to pregnant women for
the treatment of morning sickness.
Directive 65/65/EC laid down a system in which Member States were responsible for
granting market authorizations for new medicines on the grounds of quality, safety and
efficacy. The directive stated that the application dossier must contain a detailed
Summary of Product Characteristics (SmPC). Products authorised before the
formation of the EMEA and the introduction of the Mutual Recognition Procedure
have a different SmPC for each national authorization.
The next major step forward in the formation of a European pharmaceutical regulatory
framework occurred in 1975 with the establishment of the Committee for Proprietary
Medicinal Products (CHMP). This was initiated by another directive on marketing
authorization, 75/319/EEC. This directive initiated the first Phase of the CHMP
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procedure, which eventually evolved into the Mutual Recognition Procedure (MRP)
used today. These two directives were amended in 1983 by 83/570/EEC.
In 1987, the multi-state procedure was joined by a concertation procedure, which

required Member States to consult each other before issuing final decisions on
medicinal products produced using biotechnology processes. This procedure could also
be used on a voluntary basis by companies applying for authorization of certain high
technology products. The aims of the procedure were to enable Member States to pool
scarce resources when considering new and complex products that required specialized
expertise to evaluate, to encourage uniform authorization decisions and to provide
additional patent protection.
European pharmaceutical legislation was further broadened to cover all medicinal

products with a Directive 89/341/EEC in 1989, which widened the scope of legislation
and regulated export certification and patient information.
The formation of the EMEA and the MRP

In 1993, the European Commissions Regulation 2309/93 established the European
Agency for the Evaluation of Medicinal Products (EMEA) and laid down procedures
for the authorization and supervision of medicinal products for human use. During this
time, the EC began harmonizing rules and requirements for specialised categories of
products previously left unregulated, including vaccines (Directive 89/342/EEC), blood
products (Directive 89/381/EEC) and radiopharmaceuticals (Directive 89/343/EEC).
New legislation was also agreed upon, harmonising EC rules in a range of new areas,
including Good Manufacturing Practice (Directive 91/356/EEC), wholesale dealing in
medicines (Directive 92/25/EEC), the criteria for deciding whether a product should be
available only on prescription (Directive 92/26/EEC), leaflets and labels (Directive
92/27/EEC), and advertising (Directive 92/28/EEC).
This harmonization resulted in the EMEAs becoming responsible for market

authorization through the centralized procedure in 1995, making it the first regulatory
88
body to award a product license that was valid throughout the European Union. This
helped remove trade barriers so that a medicine marketed in one EC country could also
be made available in the same way and subject to the same conditions in other EC
countries. At the same time, it provided consistent safeguards as to the safety, quality
and efficacy of medicinal products. The centralized procedure is mandatory for most
biotechnology products and certain innovative medicinal products.
In July 2004, comprehensive legislation was passed that, among other things, changed
the name of the 'European Agency for the Evaluation of Medicinal Products' to the
'European Medicines Agency', although the EMEA acronym remained the same.
EMEAs centralized procedure goes hand in hand with the Mutual Recognition
Procedure. The MRP is currently the preferred route for most new products not derived
from life sciences. From 1995 to 2007, nearly 4,000 products have been authorized in
the MRP, more than 10 times the number that have made it through the centralized
procedure during that time.
The continually evolving body of laws published by the EU is collectively known as

the Acquis Communautaire, or simply the Acquis. It consists of a set of Directives,
Regulations and Miscellaneous Provisions put in place by the EC/EEC from 1965 to
the present. All of this pharmaceutical legislation was originally published in the
Official Journal. This body of legislation is continually being updated as technical and
other advances create new areas for inclusion in the legal framework.
The EMEA
The EMEA is particularly intended for the evaluation of novel and pioneering
technologies, especially products that pose scientific challenges from a public health
point of view. However, it does not evaluate these technologically advanced products
directly. The EMEAs so-called centralized procedure is actually a network of 3,500
89
experts from the European Unions 27 member states and the EEA-EFTA States
(Iceland, Lichtenstein and Norway), which provides scientific resources in the
evaluation and supervision of medicines. A marketing authorisation issued by the
EMEA is valid in all of these countries for five years, and is renewable for five-year
periods.
The EMEA groups responsible for the oversight of human medicines consist of:
A management board consisting of one representative from each Member State,

two representatives from the European Commission, two representatives appointed
by the European Parliament, two representatives from patients groups, one
representative from physicians organizations and one representative of
veterinarians groups, as well as one observer from each of the three EEA-EFTA
states;
two committees responsible for evaluating medicinal products for human use (the
CHMP) and medicinal products for rare diseases (the COMP);
an Executive Director;
a Secretariat consisting of 29 sectors, which can broadly be subdivided into the

following categories: Pre-authorisation for Medicines for Human Use, Postauthorisation for Medicines for Human Use, Administration, Communications and
European Commission Services.
The CHMP coordinates the evaluation of all technologically advanced products for
human use other than those to treat rare diseases. It consists of 34 members and a
chairman. Each of the 27 EU Member States and the EEA-EFTA states nominates a
member and an alternate. The committee also has additional 5 members with specific
areas of expertise.
The COMP oversees orphan medicinal products which affect no more than 5 in 10,000
persons. It has one representative per Member State, three representatives from the
90
EMEA and three from patient groups. Although the same network of rapporteurs is
used to evaluate medicines for rare diseases, the evaluation of medicines for orphan
drugs takes considerable resources, so a separate Committee has been established. The
EMEA receives just under two thirds as many applications to the COMP as the CHMP.
concerns mean that the EMEA will continue to rely on the network of national
authorities and the MRP will remain the preferred route for most new products not
derived from life sciences for the foreseeable future. Since 1995, the MRP has
authorized roughly ten times as many new products as the centralised procedure.
The Mutual Recognition Procedure (MRP)

The MRP is based upon the principle that EU Member States recognize one anothers
market authorizations. For each drug authorization, a company selects one country as
its Reference Member State (RMS). Through the Mutual Recognition Facilitation
Group, the dossier in support of the products initial (RMS) authorisation is forwarded
to other Member States. If these Concerned Member States (CMSs) validate the dossier
approved by the RMS the MRP is complete. The product is then authorized for sale,
with one standard SmPC valid in all the CMSs. Marketing authorisations for the
product are issued by each of the competent authorities involved in the procedure.
The RMS is supposed to evaluate the initial application within 210 days, the same
length of time allowed for a centralised procedure at the EMEA. After this national
authorization is completed, the competent authorities have 90 days to prepare their own
assessment reports. If one or more of the CMSs competent authorities refuses to
recognise the initial authorisation, the EMEA is called in to arbitrate. This entire
process, from application to the Reference Member State through authorisation in all
Concerned Member States, should theoretically be completed in 300 days. However, in
practice the time taken can vary considerably and is dependent on a variety of factors,
particularly the choice of Reference Member State.
91
The MRP is currently the most widely used route of approval for pharmaceutical
products in the EU, and is the only way to get Europe-wide approval for generics.
However, the centralized procedure is obligatory for biotechnology products and is
becoming increasingly popular for NCEs. Therefore, in the future, the roles left for
national authorities will be the authorisation of generics, variations and parallel
imports, the provision of scientific advice to the EMEA, and pharmacovigilance.
The MRP has several advantages over the centralized procedure. These include the
ability to:
Launch a product in one country to provide cash flow while establishing an

effective marketing strategy before Europe-wide launch. This also allows time to
observe the drugs clinical and commercial performance;
exploit a companys strong presence in one country to conduct more cost-effective

clinical trials and achieve market penetration in home territory first;
co-market a drug with other licensees or partners. The centralised procedure can
restrict the possibility of co-marketing drugs with companies, as it creates a single
Europe-wide approval for a single brand name;
pre-empt review of a drug by Member States that may be unlikely to approve it.
Alternatively, a company may choose to use neither of the two routes to Europe-wide
approval and instead opt to market the drug in one home market. This can be a more
cost-effective and market-targeted approach, particularly for small or medium sized
enterprises in large, self-sufficient market places. Europes largest market, Germany,
for example, issues many national authorisations to SMEs that do not seek
authorisation outside of their home country.
A companys choice of reference state usually depends primarily upon the time taken
to receive a national authorisation and to finalise the report before starting the
92
procedure, as well as the number of indications a for which a product can be licensed.
Although all countries are supposed to process applications in 210 days, the time taken
to issue market authorisation varies greatly from country to country.
The quality of the assessment provided by the competent authorities also varies from
one country to another. A thorough assessment from an RMS known to be competent
will be recognised by Concerned Member States, decreasing the risk of arbitration or
withdrawal.
The evaluation process in some countries is more transparent than in others. The level
of advice offered by a competent authority to the EMEA is a good indicator of its
trustworthiness in adhering to European standards of safety, quality and efficacy.
Similarly, authorities that are more experienced in processing authorisations as an RMS
will create fewer problems for the applicant in the recognition Phase. Therefore, the
number of applications received by each country varies considerably.
The National Competent Authorities

While the centralised procedure issues one European marketing authorisation for a
product, the MRP issues a series of national authorisations. Each of these has various
strengths and weaknesses, which are often taken into account in drug makers choice of
reference state. As of March 2008, the EMEA recognized National Competent
Authorities corresponding to each EU member. The leading organizations are profiled
in Table 3.10. Because this report focuses on the EMEA, however, the National
Competent Authorities will not be discussed in detail.
The Common Technical Document

The basic platform for all data submission is the Common Technical Document (CTD),
which can be submitted via the Internet as an Electronic Common Technical Document
(eCTD). This is a common format for the dossier that must be submitted to the
authorities in Europe, the U.S. and Japan established in November 2000 by the
International Conference on Harmonisation.
93
Table 3.10: Leading European National Competent Authorities, 2008

Country
Germany
France
dubbed the
National Competent
Comments
Authority
BfArM
Germany is the largest pharmaceutical market in Europe with many small to medium sized enterprises dedicated to the
German marketplace. As a result, 75% of authorisations currently issued in Germany are national authorisations that do
not go on to use the MRP.
AFSSAPS
The Agency is unusual in that it also conducts pharmacoeconomic evaluations of drugs. AFSSAPS has
been
Italy
Pharmaceuticals
Directorate
U.K.
MCA
Spain
AEM
The Netherlands
Belgium
Sweden
Switzerland
CBG-MEB
AFGIP
MPALIF
Swissmedic
Portugal
Austria
Greece
Finland
Denmark
Infarmed
BMSG
EOF
NAM
DKMA
medical police in France, because of its rigorous monitoring of health and safety aspects of medicinal products,
particularly in its post-marketing activities.
Although Italys pharmaceutical market is the third largest in Europe, it does not issue as many market authorizations.
This is because, as in France, generics are largely missing from the Italian market. To date, doctors have not been
encouraged by government regulations to prescribe them, and pharmaceutical manufacturers and distributors enjoy the
profit margins of branded products.
The MCA is known for being fast but rigorous. The cost of authorizing a new chemical entity in the U.K, although the
cost of obtaining a generic authorization tends to be lower.
Created in 1997 to take the responsibility of medicines evaluation and market authorization from the National Health
System.
Most authorisations granted are for parallel imports.
Belgiums AGFIP is relatively small compared with other National Competent Authorities.
Most authorisations granted are for parallel imports.
Under the terms of Switzerlands Therapeutic Products Act, all products on the Swiss market require a license from
Swissmedic, although unlicensed products may be dispensed in exceptional circumstances. As Switzerland is not in the
EU, it does not recognize central applications or use the Mutual Recognition Procedure. However, a concession is
available for medicinal products already licensed in another country with similar control of medicinal products and
corresponding clinical data is taken into account.
Generic authorizations in Portugal are increasing, although the cost of market authorization remains high.
Many authorizations are for generic drugs.
Charges very low fees.
Continuing to expand as a RMS.
Denmark is the 14th largest market in Europe but is a significant contributor of scientific advice to the EMEA.
Source: National Competent Authorities
94
The CTD format became mandatory in July 2003 and consists of five modules. These
are comprised of:
Module 1, containing the prescribing and administrative information specific to

each regulatory agency. In Europe this information must contain the application
form, SmPC, labelling and packaging details;
module 2, containing the overall summary, the nonclinical overview and the
clinical overview followed by nonclinical written summaries and the clinical
summary. The summary provides the critical key parameters of the product and
justification in cases where guidelines are not followed. The non-clinical overview
provides an interpretation of the data, the clinical relevance of the findings, and the
implications of the findings for the safe use of the product. The clinical summary is
a high level analysis of the clinical data including an evaluation of benefits and
risks;
module 3 is concerned with quality and provides an analysis of the chemical,

pharmaceutical and biological information. All analytical test procedures are
described in sufficient detail to enable the procedures to be repeated if necessary;
module 4 contains non-clinical study reports;
module 5 presents clinical study reports.
In February 2008, the EMEA announced plans to implement the electronic-only

submission of data supporting marketing authorization applications and ultimately, the
implementation of the new electronic Common Technical Document (eCTD). The
eCTD was included in a broader EU initiative dating to early 2005, requiring that by
the end of 2009, European regulators must have the infrastructure and processes in
place to handle the electronic-only eCTD. The major milestones for implementing this
strategy include:
95
From July 1, 2008, the EMEA will accept electronic-only submissions, either in
eCTD format or non-eCTD format, with no additional requirement for paper
copies. This will apply to both new and existing applications and all types of
submissions to the EMEA pursuant to the centralized procedure (new drug
applications, supplementary information, variations, renewals). However,
rapporteurs and CHMP members may still have paper-copy requirements;
From January 1, 2009, the EMEA will strongly recommend electronic-only

submissions, either in eCTD or non-eCTD format, although eCTD will be the
recommended electronic format. Paper will be an exception to the general e-format
recommended for any application. Rapporteurs and CHMP members will not
receive paper copies from this date;
From July 1, 2009, the EMEA will strongly recommend eCTD-format electroniconly submissions.
The promotion of paperless drug applications is expected to facilitate the review and
management of information, providing standardization of some administrative tasks, as
well as easier access to information for both internal and external EU sources.

In Europe as in the U.S., several emerging trends are creating imperatives for drug
safety. These include increasing reports of adverse drug reactions, expanding usage of
products obtained over the Internet and associated issues with counterfeiting. In 2006,
for example, the number of individual case safety reports reported to the EMEAs
centralized EudraVigilance reporting system reached 283,768, triple the 2005 figure.
As in the U.S., certain drug classes presented specific concerns; these were addressed
through a series of reviews, whose results are expected to have a direct bearing upon
the level of scrutiny afforded to new drug applications in these areas:
Under Article 5(3) of the cardiovascular safety of non-selective non-steroidal antiinflammatory drugs (NSAIDs), and considering new clinical and epidemiological
96
study data, the CHMP concluded that some non-selective NSAIDs may be
associated with a small increase in the absolute risk for thrombotic events,
especially when used at high doses for long-term treatment;
under Article 20 of centrally authorized tacrolimus-containing medicinal products

(Protopic, Protopy), in relation to a potential risk of skin cancer and lymphoma, the
CHMP concluded that the benefits associated with the use of these dermatological
medicinal products outweigh the risks, but that they should be used with greater
caution;
under Article 20, of centrally authorized recombinant hepatitis B vaccines

(HBVAXPRO and Procomvax), in relation to the efficacy of the vaccines, the
CHMP concluded that these products continue to offer effective protection against
hepatitis B, but recommended changes to the prescribing information.
To provide greater oversight for all products during both the approval and postmarketing periods, the EMEA created a set of Scientific Advisory Groups in 2006.
Creation of Scientific Advisory Groups

Scientific Advisory Groups (SAGs) support the CHMP on the scientific evaluation of
medicinal products, depending on the area of expertise of each group. As of early 2007,
six SAGs were established covering all therapeutic areas in the mandatory scope of the
centralized procedure (anti-infectives, central nervous system, diabetes and
endocrinology, diagnostics, HIV and viral diseases, oncology). The seventh, focusing
on cardiovascular issues, was established later in the year. In terms of their expertise
and role in the drug approval process, the SAGs are similar to the FDAs Advisory
Committees.
97
Future directions in drug safety testing

Like the FDA, neither the EMEA nor the National Competent Authorities have recently
made substantive official changes to their overall standards for drug approval. On case
by case basis, however, European regulators appear to be exercising more caution in
granting approvals, particularly requiring sufficient data to confidently verify drug
safety. This trend is likely to persist through the foreseeable future, as regulators
continue to respond to calls from the public to make sure that approved medicines
cause no harm.

In an effort to bring needed medicines to market more quickly, the EMEA has been
attempting to reduce the time it spends reviewing marketing applications. This goal
was specifically set forth in the EMEAs Roadmap to 2010, a document developed in
2005 as a means to achieve the agencys goals, in light of the challenges of a growing
European Union, in the short term. The Roadmap lists several key hurdles, including:
A fall in innovative productivity, despite a sharp increase in global R&D

expenditure;
an aging population that is creating increased demand for medicines in areas of

unmet medical need;
development of antimicrobial resistance;
adequate management of bioterrorism and chemical terrorism agents and other

major public health issues (influenza pandemic, another SARS outbreak, etc.);
the ability of regulators to adequately monitor the safety of medicinal products

following worldwide withdrawals of several high-profile medicines.
These challenges are to be met through strengthening the EMEA base by better
integrating the 27 EU member states within the EMEAs networking model,
98
modernizing
the
EMEAs
functional
structure
and
reducing
administrative
impediments. To help improve regulatory and scientific memory, and presumably

thereby improve the drug review process, the Roadmap suggests strengthening the
EMEAs peer review system, particularly through the continued provision of highquality scientific resources by the National Competent Authorities to the EMEA.
Particular attention will be put on identifying the bottlenecks in the drug development
process and undertaking remedial actions to remove these logjams.
Halfway into the implementation of Roadmap provisions, the EMEA strategy appears
to have been successful. After a slight increase in overall review time in 2005, a shown
in Figure 3.5, review times were significantly reduced in 2006 for centralized
procedures.
Figure 3.5: Average number of days for centralized procedure positive

opinions, 2004 - 2006
350
300
41
Number of Days
250
200
94
56
31
36
150
100
203
187
171
50
0
2004
Assessment Phase
2005
EMEA Post-Opinion Phase
2006
Decision Process
Source: EMEA
99
In the area of orphan drugs, processing times have improved even more. In 2006, the
agency reduced the average time to 57 days the shortest average time since the start
of the procedure, in 2000. Figure 3.6 shows trends in orphan drug approvals.
Figure 3.6: Average number of days for orphan drug designation opinions,
2004 - 2006
80
70
69
60
57
Number of Days
60
50
50
40
32
30
25
20
10
0
2004
2005
Time to Opinion
2006
Time to Decision
Source: EMEA
Accelerated opinions
In July 2006, the EMEA implemented a new review system to so speed up the approval
of innovative drugs that have "major therapeutic interest". Drug makers can apply for
accelerated assessment if they are able to demonstrate that their product responds to
unmet medical needs or constitutes a significant improvement over the available
methods of prevention, diagnosis or treatment of a disease. Under the accelerated route,
the standard time period of seven months to give an opinion for a marketing
authorization is reduced to five months.
100
The CHMP received 13 applications for accelerated assessment in 2006, 4 of which

were accepted. In February 2007, Alexions new orphan drug Soliris was the first
therapy to be approved under the new process, becoming the only drug approved in
Europe to treat patients with paroxysmal nocturnal hemoglobinuria, a rare blood
disorder defined by chronic red blood cell destruction, or hemolysis.
Pediatric testing exemptions

To streamline drug testing and eliminate the collection of unnecessary clinical data, the
EMEA has relaxed requirements to for pediatric trials for products that:
Are likely to be ineffective or unsafe in part or all of the pediatric population;
are intended for conditions that occur only in adults;
do not represent a significant therapeutic benefit over existing treatments for

children.
Following an opinion adopted by the Paediatric Committee during its November 2007
meeting, the EMEA adopted in December 2007 a list of conditions that occur only in
adult populations. These include various types of carcinoma, multiple myeloma,
dementia and Alzheimers disease, non-juvenile Parkinsons disease, age-related
macular degeneration, certain menopausal and post-menopausal conditions, Chronic
Obstructive Pulmonary Disease (COPD), amyotrophic lateral sclerosis and organic
amnesiac syndrome.
Decreasing EMEA approvals vs. FDA approvals

Despite improvements in processing speed, the EMEA is reportedly approving fewer
products than the FDA. According to the Tufts Center for Drug Development, the mean
approval times for 71 new medicinal products approved by the EMEA through its
centralized procedure and in the U.S. by the FDA during 2000 - 2005 were nearly
identical at 15.8 months versus 15.7 months. However, the FDA approved a greater
number of products (47) faster than the EMEA. Because of this, of the 71 products
101
authorized by both agencies, 52 were approved first in the U.S., an average of 11.8
months before receiving EU approval. While products with an orphan drug designation
had similar approval times at an average of 16.8 months for the EMEA and 15.5
months for the FDA, products without such a designation took longer to approve in
Europe than in the U.S.
While these decreasing approvals mainly take the form of delays, in some cases, the
EMEA refuses marketing authorization altogether. A portion of these refusals will later
be reconsidered upon the provision by the drug developer of further data; however,
many will not be reevaluated. In 2006 and 2007, the EMEA refused marketing
authorizations for six products, based upon both safety and efficacy concerns:
Genasense (Genta and Sanofi-Aventis) for advanced melanoma;
Mycograb (NeuTec Pharma) for systemic candidiasis;
Thymanax and Valdoxan (Les Laboratoires Servier) for depression;
Alpheon INN (BioPartners GmbH) for Kaposis sarcoma;
Natalizumab (Elan Pharma) for multiple sclerosis and Crohns disease.
As discussed in the following case study, however, many of these represent products
with a complex history of safety and efficacy challenges.
Case study: natalizumab H3

Natalizumab is a humanized monoclonal antibody against integrin-4 that has
demonstrated efficacy in the treatment of multiple sclerosis (MS) and Crohn's disease.
Co-marketed by Biogen Idec and Elan as as Tysabri, it has a long history of safety
risks. In November 2007, the EMEA refused marketing authorization to Elan for an
infused product indicated for the treatment of Crohns disease.
102
In November 2004, the FDA approved Tysabri for the treatment of multiple sclerosis.
Three months later, however, in February 2005, Biogen Idec and Elan voluntarily
withdrew the drug after it was linked to one fatal and one non-fatal case of a rare, often
lethal brain disease known as progressive multifocal leukoencephalopathy (PML). The
companies conducted an intensive safety review of Tysabri, and in March 2005, a
second PML death was linked to the drug. Nonetheless, in late 2005, Biogen Idec and
Elan resubmitted marketing applications to the FDA and EMEA. In June 2006, both
regulators re-approved Tysabri for relapsing MS. Although the FDA required restricted
distribution in a new program known as the TOUCH Prescribing Program ("TOUCH"
stands for "Tysabri Outreach: Unified Commitment to Health"), the EMEA approved
the drug without this condition. Under this program, only prescribers, infusion centers,
and specialty pharmacies trained and enrolled in the TOUCH program can prescribe
and administer Tysabri. Additionally, patients must also be enrolled in the TOUCH
program, so that they may be educated on Tysabri as well as periodically evaluated
while being treated with Tysabri.
In early 2007, Elan applied to the EMEA for permission to market natalizumab for the
treatment of Crohns disease. The company submitted two clinical studies involving a
total of 905 patients with moderate to severe Crohns disease. The first study compared
the effects of treatment with natalizumab to treatment with placebo in all 905 patients
over a period of 10 weeks. The 354 patients who responded to treatment with
natalizumab went on to enter the second study, in which the effects of the drug in
maintaining response were evaluated over an additional nine months of treatment. In an
opinion delivered in July 2007, the CHMP found insufficient evidence to show the
effectiveness of natalizumab in Crohns disease, calling the effects of the medicine
modest. The CHMP also had concerns over the safety of the drug, particularly with
regard to PML. After Elan requested a re-evaluation, the CHMP in November 2007
removed its opinion regarding the effectiveness of the medicine in patients starting
treatment but re-stated its other concerns and ruled finally that the benefits of the drug
did not outweigh its risk for Crohns disease.
103
The decision did not affect Tysabri, which continues to be marketed in the EU for
treatment of MS, but does not authorize natalizumab for the additional indication of
Crohns disease. Interestingly, natalizumab was granted approval for the treatment of
Crohns disease in August 2007, albeit subject to "strict post marketing surveillance."
Current EMEA approval levels

According to the EMEAs annual report for 2007, the agency is increasing the number
of drug applications processed and approved. In 2007, it received 90 applications for
marketing authorizations, 12 more than in 2006. This includes 11 applications for
orphan medicines, 10 for generic drugs and 10 for similar biological medications. Of
these, 65 opinions on initial marketing authorizations for medicines for human use
were adopted in 2007, representing an increase of 14 adopted marketing authorizations
over 2006. Cancer medicines were the most-represented therapeutic category, followed
by anti-infectives and gastrointestinal medicines.
The EMEA expects its volume of activity in 2008 to further increase, forecasting a
12% rise in the number of initial applications for marketing authorizations for human
medicines to 102 applications.

In the future, drug approval times at the EMEA are expected to improve somewhat, but
these improvements will be experienced mainly by innovative drugs with "major
therapeutic interest" that can benefit from the new accelerated opinion process.
Products that merely offer alternate options to existing therapies will likely continue to
experience delays, especially if their developers are unable to demonstrate extremely
strong safety profiles. Products that are associated even peripherally with major side
effects will increasingly be delayed or rejected.
In January 2008, the EMEA announced a new cooperative agreement with Health
Canada, wherein the agencies would share confidential information about the
104
authorization and safety of medicines. This includes assessments of applications for

marketing authorizations, and builds on prior cooperation between the two regulators.
Although the EMEA noted that the agreement is expected to provide accelerated
access of patients to new and innovative medicines, it remains to be seen how great an
impact this expanded relationship will have.
The overall speed of orphan drug approvals, however, is likely to accelerate with the
late 2007 agreement between the FDA and EMEA whereby the same application could
be used for both agencies. This reduces the time and finances required of companies to
apply for orphan drug status. However, the two agencies still maintain separate
approval processes.

When the EMEA has concerns about product safety, it may refuse marketing
authorization. The agency will, however, reexamine applications when developers can
provide additional data to address its concerns. This has the net effect of delaying
authorization for drugs until developers can demonstrate that the products carry an
acceptable level of risk. In 2007, the EMEA reevaluated seven applications for which it
had initially delivered a negative opinion:
Kiacta (Neurochem Luxco II SARL) for amyloid A amyloidosis;
Rhucin (Pharming Group) for angioedema;
Cimzia (UCB Pharma) for Crohns disease;
Zavasca (Actelion Registration) for Niemann Pick type C;
NutropinAq (Ipsen) for severe idiopathic short stature in children;
Mylotarg (Wyeth) for acute myeloid leukemia;
Natalizumab (Elan Pharma) for multiple sclerosis and Crohns disease.

105
Many of the National Competent Authorities are following a similar approach.

The EMEA is expected to continue to delay approval of applications it deems risky,
denying marketing authorization and/or requesting more data to support conclusions.
However, this trend may be less pronounced in Europe than in the U.S., as the EMEA
continues to attempt to speed its drug approval process. Furthermore, public criticism
of the EMEA has been significantly less than that of the FDA, resulting in a lesser
imperative to tighten the drug approval process.
It should also be noted that more so than in the U.S., European regulators currently
appear to favor the evaluation of drugs on a case-by-case, rather than a class-by-class,
basis. In October 2006, for example, the EMEA concluded that the risk-benefit balance
for non-selective non-steroidal anti-inflammatory drugs (NSAIDs) remained favorable,
thereby precluding a blanket prejudice against class members based solely upon that
status. This conclusion was drawn following a review of new thrombotic
cardiovascular safety data in which the CHMP determined that:
Non-selective NSAIDs are important treatments for arthritis and other painful
conditions;
Risk-benefit is acceptable when the product is used according to its treatment

guidelines and taking into account the patients individual gastrointestinal,
cardiovascular and renal risk factors;
However, non-selective NSAIDs may be associated with a small increase in the

absolute risk for thrombotic events, especially when used at high doses for longterm treatment.
106
The EMEA has closely monitored the usage of non-selective NSAIDs since initial
recommendations were made in October 2005, and recently confirmed its previous
advice for patients to use the lowest effective dose for the shortest possible duration to
control symptoms.
Biosimilars
Biosimilars are follow-on drugs that effectively represent generic versions of biological
products. Legislation passed by the European Parliament provides 10 years of market
exclusivity for innovator drugs and biologics against generics, hybrids, and similar
biological products. The ten-year period may be extended for an additional year, for a
total of 11 years of market exclusivity, with respect to certain new indications. After
this time, other manufacturers may introduce bioequivalent version of the innovator
product.
However, while the approval path for generic drugs has been well-defined for many
years, the review process for biosimilars has only recently been clarified. Due to the
complexity of biological/biotechnology-derived products, as well as the fact that
biological products are made in living organisms and manufacturing processes are trade
secrets, generic versions of biologics cannot be identical to their reference products so
the generic approach is scientifically not appropriate for these products. Biosimilars are
different from existing biological products in terms of raw materials and manufacturing
processes and that even very small differences can significantly alter a biological
therapy's safety and effectiveness. Therefore, a biosimilar can exhibit immunogenicity
problems that were not detected in clinical trials and do not occur with the innovative
product; this requires that biosimilars undergo post-marketing monitoring.
New biosimilar guidelines

approval structure in place than the FDA and in fact, Europe is quickly becoming the
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global center for the development and production of biosimilar medicines. This is
mainly the result of recent initiatives to clarify the approval process.
Europe adopted a new directive in 2004 outlining the legal area for the approval of
biosimilars. While the law was very basic, it endowed the EMEA with authority to
approve biosimilars based on their scientific guidelines and requirement. In October
2005, the EMEA Committee For Medicinal Products for Human Use published its
EMEA Guideline on Similar Biological Products to provide a framework for the review
and approval of such products.
EMEA used a public process to obtain input to establish both the general testing
requirements for biosimilars as well as the testing requirements for certain individual
product types. The final guidelines recognize that there may be safety and efficacy
differences between seemingly similar products. To address this, the EMEA takes a
case-by-case approach to similar biological products, saying that any "differences
between the similar biological medicinal product and the reference (innovator)
medicinal product will have to be justified by appropriate studies on a case-by-case
basis." Such studies will typically include clinical trials and safety data because a
similar biological product may have a different safety profile from the reference
product even if the efficacy is comparable. In general, biosimilars must demonstrate
that they are as safe and effective as the originator reference product in order to gain
approval, and their potency and purity must not vary outside the limits displayed by the
reference product.
Future directions in biosimilar approvals

Through the forseeable future, the development of biosimilar medicines in Europe is
expected to be brisk. In 2007, the EMEA approved five new biosimilars and issued two
positive scientific opinions. The agency received 16 applications for new biosimilar
products during the year, representing almost one third of all centralized applications.
This is largely the result of pent-up demand, as manufacturers submit the first
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applications for follow-on versions of the large and growing number of patent-expired
biologics.
Rx-to-OTC switches
In Europe, Rx-to-OTC switches tend to be handled on a country-by-country basis,
rather than through a centralized process. While the U.S. has just one class of
nonprescription drugs (over the counter or OTC), many European countries have two
(pharmacist-dispensed and OTC). Pharmacist-dispensed products must be requested by
the consumer of a pharmacist, who may then determine the appropriateness of the drug
for the customer. In contrast, OTC products are available on retail shelves, for selfselection by consumers.
Despite interest in the European Union in switches and a mid 2004 report from the
Association of the European Self-Medication Industry (AESGP) indicating that
ramping up the pace of switches could save the EU more than 16 billion a year, the
U.K. remains the only country in that region with significant momentum behind
switches. In an effort to both expand consumer access to medicines and decrease costs
to the public health care system, Rx-to-OTC switch activity in the U.K. has been
strong.
While some 50 substances have been removed from prescription-only status over the
past 10 years, since the launch of the new streamlined reclassification process in the
U.K. in 2002, more than three dozen products had been reclassified by the end of 2007.
Key products which recently switched from prescription to pharmacist-dispensed sale
include GlaxoSmithKlines Imitrex for migraine and Mercks Zocor for cholesterol
reduction, as well as limited availability of Pfizers Viagra erectile dysfunction drug.
While the U.S. FDA has thrice rejected applications from Merck to switch Zocors
predecessor, Mevacor, on safety concerns, the U.K. regulatory authority has taken a
more liberal approach to expanding the availability of popular medicines.
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In Europe as in the U.S., reclassifications of medicines from prescription to
nonprescription status are expected to increase as more and more blockbusters lose
patent protection and become subject to low cost generic competition. However, due to
the complexity of filing applications in many different countries, it is likely that the
U.K. with its more liberal stance to switches will see the greatest number of
reclassifications.
Marketing withdrawals, in which a drugs Marketing Authorization is officially
withdrawn, are intended to prevent unsafe drugs from use. They typically involve
significant side effects that were not identified in clinical trials, but come to light only
after very large numbers of patients have used the drug. As shown in Figure 3.7,
EMEA marketing withdrawals have increased significantly since the discontinuations
of Mercks Vioxx and Pfizers Bextra in 2004, with 24 withdrawals in the 2004 to 2007
period compared with just 13 withdrawals from 2000 to 2003. Although many of these
withdrawals also occurred in the U.S., some drugs were not approved in the U.S. so
withdrawals only occurred in Europe. For example, Novartiss Prexige is a COX-2
inhibitor like Vioxx and Bextra which was not approved in the U.S.; in December
2007, the EMEA recommended the withdrawal of the drugs Marketing Authorization
due to potentially harmful effects on the liver.
When the EMEA fails to approve a drug based upon data insufficiencies, and the drug
developer is unable to provide sufficient information to address the deficiencies, the
developer often withdraws the application. For example, in December 2007, Guerbet
withdrew its application for a centralized Marketing Authorization for the medicine
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Sinerem (superparamagnetic iron oxide nanoparticles stabilized with dextran and

sodium citrate), to be used for the characterization of lymph nodes visualized with
magnetic resonance imaging in the evaluation of primary tumor spread in pelvic
cancers. Guerbet had submitted the application in October 2006, but was later informed
that the CHMP considered that the main study used to evaluate the benefit-risk profile
of the drug had failed to statistically demonstrate its efficacy. A similar situation
occurred in March 2008, when Wyeth withdrew its application for Pristiqs, a treatment
for vasomotor symptoms associated with menopause. Wyeth had submitted the
application to the EMEA in October 2006, but CHMP had raised questions regarding
the risk-benefit profile of Pristiqs. In its official statement on the matter, Wyeth said it
would conduct additional clinical studies that would address CHMPs questions.
Figure 3.7: EMEA marketing withdrawals, 2000 - 2007
9
8
Number of Withdrawals
7
6
5
4
3
2
1
0
2000
2001
2002
2003
2004
2005
2006
2007
Source: EMEA
Sometimes an application is withdrawn because a drug maker cannot provide requested

data within a specified timeframe. This occurred in May 2007, when Protherics
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withdrew its application for Voraxaze, a treatment for the relatively rare but lifethreatening condition, methotrexate toxicity. With revenues of less than 25 million in
2006, Protherics was unable to provide the CHMP with the additional information it
requested within the allotted timeframe.

With an ongoing focus on drug safety, it is likely that the EMEA will continue to seek
marketing withdrawals for products that are linked, even peripherally, to significant
adverse reactions. While the regulator may have utilized this power somewhat less
liberally in the pre-Vioxx era, the EMEA is now likely to err on the side of caution in
protecting public safety. In this environment, manufacturers are expected to continue to
support only the strongest new product applications, withdrawing those that they are
unable to fully support with convincing safety data. The smallest drug makers, which
are unable to fund comprehensive testing programs or find a partner who will support
such research, are likely to be most affected, despite the EMEAs recent establishment
of an SME Office to provide additional guidance to small and medium-sized drug
developers.
Conclusion
European regulators have recently made great strides in expanding its drug approval
process with the introduction of regulatory pathways for biosimilars and orphan drugs,
the shift of new classes of medications from prescription to nonprescription status, an
accelerated approval process and new pediatric testing exemptions. Although the
EMEAs drug approval rate has lagged the FDAs rate somewhat, this is expected to
improve as the regulator continues to implement changes that will expand access to
medicines for EU residents.
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CHAPTER 4
Industry response
113
Chapter 4
Industry response
Summary
Pharmaceutical and biotech companies continue to work aggressively, both

separately and together, to improve drug development processes.
Several new technologies are emerging to help identify toxicity early in drug
candidates, including genomics and stem cell approaches.
One of the simplest, albeit least desirable, means to address rising data requests
from regulators and increasing standards for approval is for drug makers to raise
their investments in R&D. This has, in fact, occurred, with the number of U.S.
clinical trials expanding by 6.9% per year from 2000 to 2007 and U.S. R&D
spending increasing by 13.2% annually.
One of the most significant ways in which drug makers have, and continue to,
achieve R&D productivity improvements has been through the utilization of
CROs. Overall, CROs are able to shorten clinical testing times by as much as
30%, thereby leading to faster drug approvals. This has led to rising usage of
CRO services, with global CRO revenues estimated at $16b in 2007 and
continuing to grow by roughly 10% per year.
Over the past two years, the pharmaceutical industry has embraced
repositioning, a systematic new means to analyze an entire library of failed
experimental compounds to identify new therapeutic applications.
Industry groups are seeking greater transparency of clinical trial results in an

effort to self-police the industry and thereby proactively prevent potentially
more restrictive requirements from the FDA or Congress. In both the U.S. and
EU, new clinical trial databases have been established to provide details of drug
testing results.
On the theory that a stronger regulator can more effectively, and more quickly,
process drug approvals, industry groups are banding together to call for increased
funding for regulators.
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Background
To further their common goals of speeding drug approvals, pharmaceutical and biotech
companies have a long history of working both together and separately to improve drug
development processes. This collaboration remains strong, with activities compassing a
broad range of ongoing initiatives. The most important of these include the
improvement of safety testing in drug candidates, boosting investment in R&D and
public reporting of clinical trial results.
Improving safety testing

Safety testing remains a cornerstone of an efficient drug development program. Drug
candidates that do not demonstrate adequate safety profiles will not be approved for
sale. However, the longer it takes to identify safety risks, the greater the expense of
testing. For example, Phase III clinical testing typically encompasses several years and
thousands of participants. Therefore, drug makers continue to seek technologies that
will allow them to spot safety problems as early as possible, eliminating drug
candidates before clinical testing costs mount.
One of the most significant inherent safety risks from a drug is toxicity, or the degree to
which a substance is considered innately harmful or poisonous. In conventional clinical
trials, levels of toxicity are evaluated through preliminary animal trials. Human
investigations of a drug candidate follow only if toxicity levels in animal models are
found to be acceptable. However, this method has drawbacks since many compounds
are found to demonstrate toxic properties in humans after successfully completing
animal studies. Additionally, humans may react differently to a particular drug, with
some metabolizing a drug more slowly thus receiving a stronger effective dosage. This
makes it difficult to accurately identify toxicity problems in drug candidates and many
inappropriate candidates therefore progress into later stages of testing. Several new
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technologies are being used in this regard, including genomics and stem cell
approaches.
Genomics
In the emerging field of toxicogenomics, gene expression in cells or animals exposed to
the drug is analyzed to predict human effects. This can not only help prevent more
expensive human clinical trials, but also identify rare, unexpected side effects in
humans and help adjust for differences in rates of drug metabolism.
When the body's cells are exposed to a drug, they respond by altering the pattern of
expression of genes within their chromosomes. Genes are transcribed into messenger
RNA, which is in turn translated into proteins that serve a variety of cellular functions
in response to the exposure. The production of protein encoded by a given gene may be
increased, decreased, or remain unchanged, depending upon the type of exposure and
the cell's needs. Using DNA micro-array technology, researchers can monitor the
activity of thousands of genes simultaneously. This helps define the complex circuitry
within a cell, tissue or organ and gives scientists perspective on how an organism
responds to a particular compound.
As of early 2008, toxicogenomics is a developing area, with one leading company,

Gene Logic, offering drug development solutions based on an extensive proprietary
human gene expression database and several in-house departments of drug developers
and universities utilizing their own gene expression data sets. The number of
researchers utilizing such technologies, continues to rise, with Gene Logic reporting
increasing numbers of customer subscription agreements each quarter. In December
2007, Gene Logics genomics division was acquired by India-based Ocimum
Biosolutions, which provides outsourced genomics services to drug developers
worldwide.
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Stem cell approaches

Because they can develop into any of the specialized cells in the body, stem cells are
known as the bodys master cells. Found in embryonic tissue, umbilical cord blood as
well as a wide variety of locations in the adult body, stem cells are defined by their
ability to:
Produce copies of themselves;
proliferate rapidly;
differentiate into other tissues, such as bone and cartilage.
With these properties, stem cells could provide a virtually endless supply of cells that
could be made into liver or heart cells, the two most common places for toxicity.
In October 2007, GlaxoSmithKline, AstraZeneca and Roche announced the

establishment of a new venture to use stem cells for safety testing of experimental
medicines. Stem Cells for Safer Medicines Ltd. aims to develop effective ways of using
human embryonic stem cells to screen for potentially dangerous side effects of new
drugs before they go into clinical trials. It will focus initially on developing better ways
of testing for liver toxicity, the single greatest cause of drug failures and withdrawals.
The next research is expected to be heart cells, where new tests could shed light on
cardiovascular side effects like those that led to the withdrawal of Mercks Vioxx and
Pfizers Bextra in 2004 and 2005, respectively. The companies each paid $200,000 to
help fund the first year's work, while the British government contributed $1.5 million.
The U.K. has encouraged such research and science minister Ian Pearson said the new
collaboration was an example of the government's commitment to the field. Other drug
firms are expected to join soon. However, there remain significant hurdles to overcome
in differentiating liver cells from existing stem cell lines.
Other groups are also beginning to utilize stem cell technologies in drug development.
In September 2007, for example, Stem Cell Sciences was named to lead an EU funded,
multinational novel drug screening collaboration using its proprietary Neural Stem
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(NS) cells. The project, named NEUROscreen, involves designing NS cell-based

bioassays which will then be used to discover new candidate medicines for the
treatment of cancer, Alzheimer's disease, stroke and epilepsy.
Future drug safety testing improvements

Through the foreseeable future, drug makers will continue to see new technologies that
can shorten testing times, and reliably predict the safety of experimental medicines in
humans. As in the past, many new technologies and approaches will likely emerge not
from drug makers laboratories, but from technology specialists that increasingly offer
services and/or partner with multiple drug makers.
Raising investment in R&D

One of the simplest, albeit least desirable, means to address rising data requests from
regulators and increasing standards for approval is for drug makers to raise their
investments in R&D. This has, in fact, occurred, with the number of U.S. clinical trials
expanding by 6.9% per year from 2000 to 2007 and U.S. R&D spending increasing by
13.2% annually, as shown in Table 4.11.
Table 4.11: U.S. Clinical trials and R&D spending, 2000 - 2007
Year
2000
2001
2002
2003
2004
2005
2006
2007
Number of U.S.
Clinical Trials
3,663
3,883
4,158
4,544
4,827
5,029
5,445
5,826
R&D Spending
($b)
26
30
31
34
39
47
55
62
Cost per Clinical

Trial ($m)
7.1
7.7
7.5
7.5
8.1
9.3
10.1
10.6
Source: FDA
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Although the number of clinical trials has risen, R&D spending increases have
exceeded the number of new projects with the effect of raising the per-trial cost by
6.0% per year. This has occurred despite industrys growing attempts to boost R&D
productivity through the usage of contract research organizations (CROs).
Improving R&D productivity

Productivity improvements allow drug makers to obtain greater benefit from their
existing R&D resources and/or maintain R&D output while reducing their drug
development spending. One of the most significant ways in which drug makers have,
and continue to, achieve this has been through the utilization of CROs.
Contract research organizations

A CRO is any company to which a pharmaceutical or biotechnology company can
outsource part or all of the processes involved in the development of a product from
compound to market. By outsourcing specific clinical projects to CROs, a sponsor can
convert the fixed costs of maintaining the personnel, expertise and facilities necessary
for clinical trial management into variable costs paid to an external contractor.
Technological imperatives may also dictate usage of a CRO. If certain R&D functions
lie outside of the sponsor companies core competencies, outsourcing of such activities
will help focus resources towards these. For example, CROs can offer the expertise
necessary to gain regulatory approval in national markets in which pharmaceutical and
biotechnology companies may hold little experience. CROs may also offer unique
technology skills which compliment a drug developers internal resources.
The R&D services most commonly outsourced are clinical monitoring for Phase II-IV
trials, clinical trial project management and data management. These are typically
complex studies involving large patient populations and significant amounts of data.
Furthermore, the increasing complexity of clinical trial regulations means that greater
numbers of suitable patients and investigators must be recruited, often across a wide
number of sites and countries. The management of such large and complex clinical
trials lends itself well to the flexibility and expertise which outsourcing can provide.
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CROs have often built up greater access to those groups so the time taken to recruit
both patients and the medical staff required to manage a trial, which can account for a
significant proportion of the overall time taken within the trial process, is faster. Data
collection and delivery time is also often reduced by the use of proprietary clinical trial
management systems and all Phases of testing may be shortened by CROs expertise in
a given therapy area. Overall, CROs are able to shorten clinical testing times by as
much as 30%, thereby leading to faster drug approvals.
In recent years, the portfolio of services offered by CROs has widened dramatically,
with many CROs now promoting themselves as full service providers, offering an
exhaustive list of core and ancillary R&D services. This may include R&D enabling
technologies (e.g. drug discovery, genomics, high throughput screening, combinatorial
chemistry) using proprietary techniques for which they often own the intellectual
property rights. In 2007, more than 30% of clinical Phase I IV development work was
outsourced, accounting for the bulk of CRO activity. About 18% of pre-clinical
evaluations, including
synthesis and extraction, pharmacological testing, toxicology and safety testing, dosage
formulation and stability testing was outsourced. Similarly, about 15% of regulatory
(Investigational New Drug and New Drug Application) submissions was outsourced.
To achieve cost savings, clinical trials are increasingly outsourced to less expensive
regions that may be a considerable distance from the drug developer, such as Eastern
Europe, India, South America and Africa. This can result in cost savings of up to 70%
over conducting trials in the U.S. or Western Europe.
These advantages have resulted in rising usage of CRO services, with global CRO
revenues estimated at $16b in 2007 and continuing to grow by roughly 10% per year.
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Repositioning
Over the past two years, the pharmaceutical industry has embraced a systematic new
means to repurpose projects that had been discarded. In the best cases, this approach
can leverage prior safety studies, finding new uses for compounds that have proven
safe but ineffective in original indications
Called repositioning or sometimes re-purposing, the trend refers to the methodical

analysis of an entire library of failed experimental compounds to identify new
therapeutic applications. Typically, this analysis is conducted by a specialty
biotechnology company that will apply a proprietary screening process which could
incorporate multiple different technologies, and could be used to re-evaluate hundreds
of candidates that may have been discarded as much as 20 years prior. With a typical
pharmaceutical company having an inventory of about 2,000 failed Phase II or Phase
III compounds with another 150 or so failing each year, it makes sense that drug
developers would attempt to identify any previously unidentified potential for these
discarded projects.
Although a rising number of firms around the world is establishing repositioning

services for Big Pharma, among the most prominent is Gene Logic, which announced
repositioning agreements with Organon, Pfizer, Roche and Eli Lilly in 2006. The deals
are structured so that Gene Logic will receive milestone payments based on certain
laboratory breakthroughs then royalties on eventual sales in the high single digits on
products that are commercialized. Gene Logic entered the drug-repositioning business
through its 2004 acquisition of Millennium Pharmaceuticals' repurposing technology
program, which brought in vivo imaging capabilities, in vitro cell-based profiling
technologies, and ex vivo analysis through a metabolomics program. While Gene Logic
is an established drug discovery and development firm, other companies, such as
Melior Discovery, focus exclusively on repositioning. In November 2006, Melior
announced a collaboration with Merck to re-evaluate Mercks neuroscience compounds
utilizing its in vivo Indication Discovery platform, which allows the rapid evaluation of
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many small molecule compounds across multiple therapeutic areas. Table 4.12 shows
leaders in the emerging field of repositioning.
These programs are slowly starting to bear fruit. As a result of GlaxoSmithKlines

ongoing repositioning initiatives, for example, the company has been able to initiate 3
Phase II clinical studies and more than a dozen new lead to candidate programs.
Table 4.12: Selected repositioning specialists

Company
Focus
Cypress Bioscience
Repositioning central nervous system compounds for functional somatic

syndromes.
Gene Logic
Compounds discontinued after Phase II that did not demonstrate

significant safety issues; orally available, small-molecule drugs.
KineMed
Discontinued Phase II and Phase III compounds.
MDS Proteomics
Proprietary technology enables observation of proteins and interactions to

understand the underlying causes of disease and develop new drugs and
diagnostic products.
Melior Discovery
Discontinued Phase II and Phase III compounds; pursues new indications

for compounds with expired composition-of-matter patents; also acquires
and develops products for its own pipeline.
Sosei
New indications for both commercialized and abandoned compounds;

generates new intellectual property by making chemical modifications to
the compound or developing a new delivery method.
Source: Chemical & Engineering News
Future directions in R&D investment

The twin trends of ever-increasing research budgets coupled with attempts to boost
R&D productivity through the usage of repositioning and outsourcing are expected to
continue as drug makers face ongoing pressure to introduce more new products as cost
effectively as possible. This will result from continued patent expirations of
blockbuster drugs, which impact revenues. Although many of the largest
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pharmaceutical companies have already experienced expirations of important products,

another three dozen medicines with global revenues in excess of $500 million are
expected to lose patent protection by 2013. This will maintain pressure on drug
developers to replace these maturing products.
Public reporting of clinical study results

Even before the Vioxx withdrawal, industry groups have actively sought greater
transparency of clinical trial results in an effort to self-police the industry and
thereby proactively prevent potentially more restrictive requirements from the FDA or
Congress. After the recall, their efforts have accelerated.
United States
In October 2004, the Pharmaceutical Research and Manufacturers of America
(PhRMA) launched a Clinical Study Results Database, which contains a bibliography
of published studies, summaries of unpublished clinical trial results, and a link to a
drugs FDA-approved prescribing information. It is intended to make clinical study
results more transparent and accessible to both physicians and patients by providing the
results of Phase III and IV studies completed since October 2002 for PhRMA-member
company drugs approved in the U.S. PhRMAs board approved a set of Principles on
Conduct of Clinical Trials and Communication of Clinical Trial Results in 2002 which
laid the foundation for the database by expressing the commitment of PhRMA member
companies to communicate the results of all hypothesis-testing clinical trials, both
positive and negative, for commercialized drugs. The group also continues to support
the National Library of Medicines Clinical Trials Registry, which similarly contains
information about drug trial results.
After the Vioxx withdrawal, PhRMAs members agreed to voluntarily provide more
details about drug trials. While manufacturers are only required by law to provide
information to clinicaltrials.gov on trials that deal with serious or life threatening
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conditions, members now voluntarily provide details about mid to late stage clinical
trials results for all diseases. The move has substantially increased the amount of
information available on the drugs, providing greater transparency and confidence in
the testing process.
The trial data is also now disclosed in a format consistent with new voluntary
disclosure principles agreed upon in early 2005 by four major international
pharmaceutical associations. The European Federation of Pharmaceutical Industries
and
Associations
(EFPIA),
the
International
Federation
of
Pharmaceutical
Manufacturers and Associations (IFPMA), the Japanese Pharmaceutical Manufacturers

Association (JPMA), and the Pharmaceutical Research and Manufacturers of America
(PhRMA) issued a Joint Position on the Disclosure of Clinical Trial Information via
Clinical Trial Registries and Databases containing principles that:
Describe the types of information that member companies should make available, at
a minimum, in registries of clinical trials;
express member companies commitments to post in an accessible clinical trial

results database the results of clinical trials completed from today forward on all
marketed products;
instruct member companies subscribing to the joint position to establish compliance

and verification procedures for their participation in both clinical trial registries and
clinical trial databases;
support worldwide standardization of clinical-trial disclosure policies.
The initiative represents the first time that an international agreement has been struck
calling for such broad dissemination of clinical study data.
Europe
Although there are many pharmaceutical trade associations in Europe, representing
manufacturers and industry at both the national and regional levels, most have not been
124
as proactively engaged in issues related to drug safety as U.S. organizations. This

reflects both the fragmented and under-funded nature of the groups as well as a widely
held belief that drug safety is the purview of other organizations, such as the regional
industry associations and the regulatory authorities. One notable exception is the
Association of the British Pharmaceutical Industry (ABPI).
Association of the British Pharmaceutical Industry

As the U.K. represents approximately 25% of the European drug industry, the ABPI is
one of the strongest national trade associations. It is also one of the most proactive,
having established its own website for companies to voluntarily register information
about clinical trials in 2003. The ABPI, therefore, strongly supported resolutions
announced in 2005 by PhRMA, the IFPMA and JPMA to develop a worldwide
database of clinical trial data.
Over and above more comprehensive reporting of clinical trials data, however, the
ABPI continues to lobby for greater transparency in the pharmaceutical industry. For
example, the group has delivered recommendations to the House of Commons Select
Committee designed to improve the industrys relationship with the National Health
Service (NHS). The document was developed following a committee inquiry into
industry practices. The recommendations include:
Requiring all clinical trials involving the NHS to mandate publication of results as
part of the contract;
regularly assessing physicians use of the Yellow Card reporting system and more
aggressively promoting direct patient reporting of adverse drug reactions;
developing further guidelines on fostering relationships between the pharmaceutical

industry and patient groups;
ensuring that National Institute for Clinical Excellence (NICE) guidance is

implemented in the prescribing of medicines by monitoring physicians prescribing
practices.
125
Future directions in clinical data reporting

Although it is relatively new, the trend towards voluntary reporting of clinical trial data
has become well established, with the largest pharmaceutical companies participating
in an effort to provide greater transparency and win public (and regulatory) favor. This
will create expectations of smaller drug makers similarly providing data, eventually
pressuring virtually all drug makers to release greater detail about study results to the
public. However, regulators are unlikely to be swayed by greater disclosure alone, and
will continue to require increasingly comprehensive applications that fully address both
safety and efficacy of drug candidates in order to issue approval.
Strengthening regulatory processes

On the theory that a stronger regulator can more effectively, and more quickly, process
drug approvals, industry groups are banding together to call for increased funding for
regulators. This trend is particularly apparent in the U.S. One of the more visible
proponents of this movement is the Coalition for a Stronger FDA in the United States.
Coalition for a Stronger FDA

Established in September 2006, the Coalition for a Stronger FDA (CSF) brings together
more than three dozen leading patient and industry groups as well as 10 global drug
makers including Abbott, AstraZeneca, GlaxoSmithKline, Johnson & Johnson,
Novartis and Pfizer. Other participants in CSF include the last three Secretaries of the
U.S. Department of Health and Human Services, who serve as co-chairs of the
Coalition, as well as William Hubbard, former FDA Senior Associate Commissioner
for Policy and Planning and Legislation. The groups two-pronged goal is to work with
the executive and legislative branches of the federal government to:
Ensure the FDA has sufficient resources to protect patients and consumers;
maintain public confidence and trust in the FDA.
126
This latter point is important, since a recent CSF survey of 1,029 adults found that just
30% had a great deal of confidence that the FDA ensures that the products it
regulates are safe and effective. Another 52% said they only had some confidence in
product safety, while 13 % had not too much confidence and 4% had none at all.
Furthermore, 24% said their confidence in FDA had decreased in recent years.
From a practical perspective, maintaining public confidence in the FDA and ensuring
the agency has sufficient resources means increasing agency funding. The CSF notes
that the FDAs current lack of sufficient funding has caused an increased reliance on
drug user fees, with user fees now accounting for more than 59% of funding for FDA's
human drug review, a 700% increase since 1993 when the program was first
implemented. As of early 2008, it appears that the CSF may have had some degree of
success, as the FDAs fiscal 2008 budget at $2.1b represented an increase of $105.8m
over the fiscal 2007 budget request. This increase is itself significantly higher than the
$70.1m increase the FDA received between 2006 and 2007.
Future directions in regulatory support

In the short term, the industry is expected to continue to lobby for greater FDA funding
as a means to enhance the agencys ability to process drug applications. Such funding
is sorely needed and advocates can point to the widening funding gap between the FDA
and other U.S. public organizations such as the Centers for Disease Control (CDC) and
National Institutes of Health (NIH). Over the long run, however, these activities may or
may not persist, depending upon their early success and the FDAs own ability to
straighten out glitches in its drug approval process. In fact, the CSF was founded
specifically as a multi year effort rather than an ongoing concern.
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Conclusion
By impacting the drug approval process, heightened concerns about drug safety have
become a major issue for both manufacturers and consumers. Rising standards for
approval, albeit informal, longer approval times and rising requests for data are making
drug development for expensive while at the same time, delaying access to new
medicines for the patients that need them. This has resulted in a variety of initiatives
throughout the industry aimed at increasing confidence in the safety of both drug
candidates and approved medicines. New organizations are also seeking to strengthen
regulatory budgets, in an effort to expand drug application review staff.
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CHAPTER 5
Global drug approval trends to

2012
129
Chapter 5
Global drug approval trends

to 2012
Summary
In recent years, drug safety regulators worldwide have become more cautious of
new products in response to heightened public scrutiny. This trend is expected to
continue through the foreseeable future.
The FDAs Strategic Action Plan specifically notes that protecting U.S.
consumers from unsafe medical products is its first and foremost responsibility,
implying that speeding drug approvals is of secondary importance.
A key component of the FDAs approach to ensuring drug safety through the
approval process is likely to be increased requests for additional data to
supplement marketing applications as well as post-marketing data.
heightened interest in safety.
The FDA is attempting to reduce its approval times through innovative new
technology and training initiatives.
While drug safety is also a key concern for the EMEA, the agency is also focused
on expanding access to drugs and innovation.
In 2006, the first marketing authorization application using the EMEAs new
electronic PIM system was submitted.
The EMEA has recently implemented legislation aimed at promoting innovation

and development of new medicinal products by small and medium sized
enterprises (SMEs).

industries, the FDA and EMEA are increasingly sharing information about new
drug candidates and adopting similar approaches to address issues that jointly
affect their respective constituents.
130
Background
Over the past few years, drug safety regulators worldwide have become more cautious
of new products in response to heightened public scrutiny. This has been triggered by a
variety of events including:
The 2004 market withdrawal of Mercks Vioxx and subsequent withdrawals of

other COX-2 inhibitors for similar safety reasons;
ongoing safety concerns with other approved products including Abbotts Meridia
for weight loss, GlaxoSmithKlines Avandia for diabetes, Roches Accutane for
acne, various antidepressants, etc.
continued aggressive lobbying from consumer advocacy groups, such as Public

Citizen, on the risks associated with particular products;
significant safety issues related to medicine and personal care products produced in
China, followed by the execution of Zheng Xiaoyu, head of the Chinese State Food
& Drug Administration (SFDA) in July 2007 on charges of accepting bribes;
rising utilization of prescription medicines by consumers;
increasing submission of new drug applications that address complex conditions

with highly sophisticated science;
ongoing initiatives to move new classes of medicines, some for chronic conditions,
from prescription to non-prescription use.
In both the U.S. and Europe, these latter three trends are expected to continue into the
foreseeable future. Therefore, it is likely that regulators in both regions will remain
vigilant of drug safety issues throughout the approval process.
131
Trends at the FDA

According to the FDAs 2007 Strategic Action Plan, the agency has four key objectives
in the near term, which each represent fundamental public health tasks:
Strengthening the FDA;
improving the safety of patients and consumers;
increasing access to new medical and food products;
improving the safety and quality of manufactured products and the supply chain.
These first three goals have a direct bearing upon the drug approval process; however,
the second and third would appear to be in direct conflict, as improving safety often
requires delaying access to new products while additional data is collected or denying
applications which cannot support safety claims. The Strategic Action Plan specifically
notes that protecting U.S. consumers from unsafe medical products (and contaminated
food) is its first and foremost responsibility, thereby implying that increasing access
to new medical products is of secondary importance. This distinction is important to
note, as it will set the framework for the agencys drug review process over the next
several years.

A key component of the FDAs approach to ensuring drug safety through the approval
process is likely to be increased requests for additional data to supplement marketing
applications as well as post-marketing data. This data will support the FDAs
conclusions as it attempts to render decisions that are science-based. In its 2007
Strategic Action Plan, the agency hints that it will increasingly rely on such data and
may use it to change initial assessments:
132
In determining whether a new product can be marketed to consumers FDA

must make a determination of the benefit versus risk based on the best available
science. New information may later become available that will require revising
our earlier assessment of benefits and risks. Given this reality of advancing
science and emerging information, we have come to view our public health
responsibilities in terms of the entire life cycle of the productfrom the earliest
data on benefit-risk to long experience with marketed use, and spanning the
supply chain from source of ingredients to point of consumption.
heightened interest in safety, as they represent drugs with very limited usage in
humans. In 2008, the FDA is expected to conduct a pilot study to systematically review
the safety profiles of NMEs on a regular basis to determine whether these reviews
should be initiated for all NMEs as suggested by Institute of Medicine in its 2006
report, The Future of Drug Safety. These post marketing evaluations of NMEs will
incorporate data from post marketing clinical trials as well as the Adverse Events
Reporting System (AERS), data mining analysis, epidemiologic data, and a review of
the Periodic Safety Update Reports (PSURs) or U.S. Periodic Report, to identify
potential safety concerns before any such risks become significant public health threats.
To better communicate potential safety risks to the public, the FDA has begun
publishing and electronic newsletter on its website that contains summaries of the
results, including methods, of FDA post marketing drug reviews. The newsletter also
offers information on emerging safety issues, as well as details on recently approved
products.
New technology-based standards for drug application review

In an attempt to develop quantifiable, science-based standards that will provide
guidelines for the approval of new medicines, the FDA has said in its 2007 Strategic
Action Plan that it intends to:
133
harness the new genetic and molecular sciences, new advances in imaging
and bioinformatics, and other biomedical breakthroughs to create a new
generation of cutting edge scientific regulatory standards that provide both
predictability and enhanced efficiencies for product development. Such
standards will incorporate new tools that better predict a products efficacy
and/or safety, and do so earlier in the development process. This will help
sponsors shorten medical product development time, identify unpromising
products earlier in development, and get more products with more promise into
the development pipeline.
To further this objective, the FDA has created a Critical Path Initiative (CPI) that
utilizes the latest discoveries in genomics, proteomics, tissue engineering, imaging, and
bioinformatics to improve the efficiency and effectiveness of product development and
evaluation. The CPI dates to a 2004 report in which FDA outlined the path for
identifying scientific hurdles that impede medical product development. FDA issued a
follow-up report in March 2006, describing 76 concrete scientific impediments to
product development identified by both outside stakeholders and inside experts. Since
then, the agency has initiated efforts to solve more than a dozen of these hurdles.
Through mid 2009, the FDA plans to expand on this effort with the following actions:
Establishment of standards, in collaboration with industry, academia and others, for

analysis of microarray data. Microarrays allow analysis of the unique genetic
fingerprints of tissue samples, an essential step to identify and validate biomarkers.
Today, the lack of standards for microarrays impedes biomarker development;
expansion of FDAs collaboration with the National Cancer Institute (NCI) and the
Centers for Medicare and Medicaid Services (CMS) to qualify cancer biomarkers
for use in research and product assessment;
collaboration with NCI to implement an electronic drug review process using

common solutions and data standards. First steps include establishing a web-based
clinical investigator reporting system (called FIREBIRD), and a database for the
management and analysis of study data;
134
development of new regulatory standards and guidance that promote drug

developers use of innovative clinical trial designs that more reliably assess the
safety and effectiveness of drug candidates;
collaboration with the National Institutes of Health, academia, industry and others
to develop a computer model that will help identify early signs of liver toxicity.
Drug-induced liver injury is one of the most common severe adverse effects of Rx
drugs.
development of a review pathway for nanotechnology. This will include a

foundation for analyzing nanomaterials, as well as an understanding of nanoparticle
behavior in biological fluids and tissues, and mechanisms of action and toxicity in
humans.
Decreasing application review times

Review times for drug applications remain long due mainly to a dearth of reviewers
who are able to fully understand the increasingly complicated science of new drug
candidates. While the FDA has taken steps in the past to address this problem, notably
through the establishment of the Prescription Drug User Fee Act (PDUFA) in 1992 to
decrease review times by strengthening the FDAs budget, the agency continues to
suffer from a lack of expert manpower. In late 2007, FDA established a new program
to provide more comprehensive training for its drug reviewers.
The new FDA Fellowship Program is designed to bring new scientific staff fellows to
FDA, providing the agency with access to new scientific talent with relevant research
and applied experience. In the first year, FDA will appoint approximately 100 fellows
to participate in the two-year program. Based on applicants area of expertise, he will
be accepted into either the Scientific Track or the Administrative Track. The Scientific
Track provides opportunities for persons with a science background to participate in
FDA-related regulatory review and research functions while the Administrative Track
offers opportunities for individuals with an administrative background to participate in
135
activities aimed at improving the efficiency and effectiveness of operations in specific

divisions.
In order to access more information about products under review, as well as additional
scientific expertise, the FDA has said that it will also expand its work under
confidentiality arrangements and with key international regulatory agencies such as the
medical products regulatory authorities in Belgium, Denmark, the European
Commission, the Netherlands, and New Zealand.
To facilitate the efficient dissemination of information pertaining to drug applications,

the FDA will continue to enhance its information technology infrastructure. This
includes several new initiatives including:
The deployment of agency-wide IT teams to connect systems performing similar

functions. This will enable synergy and the ability to share data throughout the
FDA to identify and mitigate potential signals more effectively and efficiently;
an Information Technology Transformation Initiative, which will enhance the

FDAs IT infrastructure while enabling greater interoperability throughout the
agency;
the delivery of new computational tools for FDA scientists and professionals which
provide bioinformatics capabilities;
expanded information technologies including increases in computational power

and data volumes.
Boosting integrity and accountability

Since the withdrawal of Mercks Vioxx and ensuing investigation of regulatory
loopholes that led to the public safety failure, the FDA has come under attack by
whistleblowers as well as lawmakers as an agency that values speedy approval and
marketing of new drugs more than patient safety. To address this issue, former acting
136
FDA Commissioner Lester Crawford then current Commissioner Andrew C. von

Eschenbach, M.D. have both indicated their intention to foster a more open and
transparent culture.
One of the most significant steps in this regard is expected to be the FDA Core Values
Statement. This document will be developed in 2008 by the FDA Workplace Culture
Initiative Co-Chairs, based on survey and focus group input of staff throughout the
agency, and will serve as a set of guiding principles for agency operations.
Consumer groups maintain that a key aspect of culture change would be the elimination
of conflicts of interest. More than a dozen such groups including the Center for Science
in the Public Interest are calling on FDA to take steps to exclude individuals who have
close ties to industry from sitting on advisory committees. The ban would not
encompass individuals with any corporate ties but would include those currently or
recently employed by companies with a direct stake in the committees proceedings.
According to the FDAs 2007 Strategic Action Plan, the agency will finalize guidance
on advisory committee conflicts of interest in 2008. The form of this guidance,
however, and the degree to which it will fully address such conflicts, remain unclear.
Trends at the EMEA

According to the EMEAs mission statement, published in its most recent annual
report, the agencys goals in relation to drug approval are to:
Develop efficient and transparent procedures to allow rapid access by users to safe
and effective innovative medicines and to generic and non-prescription medicines
through a single European marketing authorization;
control the safety of authorized medicines;
facilitate innovation and stimulate research;
137
coordinate European scientific resources to provide high-quality evaluation of

medicinal products and advise on research and development programs.
Interestingly, while safety is listed in second place and rapid access is ranked third in
the FDAs list of goals, the order is reversed for the EMEA, implying that the European
regulator is more concerned with access and innovation. While it should not be
construed that the EMEA would sacrifice safety in the interests of access, as the agency
remains highly concerned about product safety, this slight bias towards access is
consistent with the EMEAs somewhat less stringent scrutiny of safety issues compared
with the FDA, as discussed in Chapters 2 and 3.

Drug safety remains an important issue at the EMEA, which will continue to be
addressed through a variety of different initiatives. Some of these focus on preapproval safety evaluation, while others center on the identification of safety issues in
drugs that that received approval.
In September 2007, new EMEA guidance came into effect outlining safeguards in the
establishment of clinical study design. It identifies factors influencing risks for new
investigational medicinal products and considers quality aspects, non-clinical and
clinical testing strategies and designs for first-in-human clinical trials. The guidance
provides strategies for mitigating and managing risk, including calculation of the initial
dose to be used in humans, subsequent dose escalation, and the conduct of the clinical
trial.
As required by a new regulation on advanced-therapy medicines which will take effect

from December 2008, the EU will create a sixth scientific committee that will assess
advanced-therapy medicines. The Committee for Advanced Therapies was deemed
necessary due to the rising number of marketing authorization applications for
increasingly complex drug candidates. These applications often require more
138
specialized analysis to fully understand the mechanisms of action and effects of these
drug candidates.
Post approval risk management is featured prominently in the EMEAs 2007 annual
report, which states that, efforts to reinforce a proactive approach to the monitoring of
the safety of medicines will remain high on the Agencys agenda, including initiatives
to be undertaken in the context of the European Risk Management Strategy (notably
the ENCePP project), the further development of EudraVigilance databases, and the
improvement of the concept of risk-management plans for human medicines. The
recently formed ENCePP (European Network of Centres for Pharmacoepidemiology
and Pharmacovigilance) will be responsible for identifying, characterizing and
assessing risks related to marketed medicines in Europe.
Product Information Management (PIM) Project

In December 2005, the EMEA introduced the Product Information Management (PIM)
Project, a joint initiative between industry and regulators designed to increase the
quality and efficiency of drug marketing authorization (MA) application submission
and review.
First conceived in 1999, PIM represents a standard for the electronic exchange of
product information in the context of MA applications. It describes how the required
information should be created and validated so that it can be exchanged successfully
between applicants and competent authorities. PIM utilizes XML (Extensible Markup
Language) to structure and control the product information being exchanged. The
format minimizes the repeated adjustment of information that is included many times in
different locations within the documents, holding each piece of information only once
for use as many times as necessary to create the required documents. This replaces the
need to supply either paper or Microsoft Word documents, as have been previously
required, although to the reader, the final PIM documents look like they would using
the prior format, both on screen and on print out.
139
In June 2006, the first live MA application using the PIM system was submitted and in
2007, the EMEA continued to develop PIM, introducing a series of follow-on tools.
While PIM was initially developed to support the centralized procedure, it is expected
that over the new few years, the standard will be further developed to support products
in the Mutual Recognition, Decentralised and National Procedures.
Cooperation with other regulators

Like the FDA, the EMEA is seeking to cost-effectively expand its access to
information about product candidates and technologies. One important way to do this is
through cooperation with regulators in other jurisdictions. Following the highly
successful collaboration between the EMEA and FDA, as described below, the EMEA
announced a new cooperative agreement with Health Canada in early 2008, wherein
the agencies would share confidential information about the authorization and safety of
medicines. This includes assessments of applications for marketing authorizations, and
builds on prior cooperation between the two regulators. It is not unlikely that over the
next several years, the EMEA will enter into more such agreements, perhaps with
regulators in Japan, Australia or other important regions.
Incentives for small drug developers

In December 2005, the EU adopted legislation aimed at promoting innovation and
development of new medicinal products by small and medium sized enterprises
(SMEs). In 2006 and 2007, the EMEA implemented this new regulation and now
provides incentives for SMEs that are developing medicinal products. It does this
through a dedicated SME Office within the EMEA, which is staffed with personnel that
respond to practical or procedural enquiries, monitor applications, and organize
workshops and training sessions for SMEs.
Specific incentives offered to SMEs
include:
Administrative and procedural assistance from the SME Office;
fee reductions for scientific advice and inspections;
140
fee exemptions for certain EMEA administrative services;
deferral of the fee payable for an application for marketing authorization (MA) or
related inspection;
conditional fee exemption where scientific advice is followed and a MA application

is not successful;
assistance with translations of the product information documents submitted in the

MA application.
This effort is designed to boost competitiveness by assisting small drug developers,

which often are unable to bring a product to market due to resource constraints
affecting the collection and compilation of clinical trial data. Over the next several
years, the EMEA is expected to continue to support and expand this initiative.
Convergence of regulatory approaches

industries, the FDA and EMEA are increasingly adopting similar approaches to address
issues that jointly affect their respective constituents. The approval of safe and
effective medicines is one of the most important such issues, and to ensure that
products are being appropriately reviewed, the regulators are increasingly sharing both
information on specific drugs as well as approaches to product review.
In late 2004, the EMEA and FDA signed confidentiality agreements allowing the
agencies to share data and information under a pilot program to provide parallel
scientific advice. The goal of this pilot is to provide a mechanism for EMEA and FDA
drug reviewers and sponsors to exchange their views on scientific issues during the
development Phase of new medicinal products, thereby providing a deeper
141
understanding of the bases of scientific advice, as well as the opportunity to optimize

product development and avoid unnecessary or duplicative testing.
Following its scheduled completion at the end of 2005, the collaboration was renewed
and strengthened in 2006 and 2007, particularly in the areas of scientific advice, MA
applications and emerging safety issues. Areas of particular activity included orphan
drugs, pediatric products and fast-track applications. In each of these areas, information
provided about product candidates by drug developers was necessarily limited, so
additional data supplied by external regulators proved extremely useful providing for
timely review and decision making. Other areas of collaboration between the FDA and
EMEA included:
Influenza vaccines;
oncology products, including monthly teleconferences to discuss ongoing

applications, pending regulatory actions, mutual participation in advisorycommittee meetings and joint participation in specialized international conferences;
anti-infective medicines;
consolidation of the joint Voluntary Genomic Data Submission (VGDS) process,

allowing more in-depth scientific discussions in the area of pharmacogenomics.
The EMEA is also playing an important role in the FDAs Critical Path initiative that
seeks to modernize the scientific process through which drug candidates progress from
discovery to commercialization. In this initiative, the EMEA is represented as an
observer on the management committee and in expert groups of the consortium
focusing on the validation of toxicity-predictive biomarkers. In addition to providing
scientific and technical assistance, the EMEA representatives are also expected to
contribute to the development of the process itself.
Transfer of knowledge between the FDA and EMEA is further facilitated through a
staff-exchange program, wherein scientific and technical staffers from one agency
142
travel to and work at the other agency for a defined period of time. This program is
expected to continue through the foreseeable future as a means to not only share
information but also build ongoing working relationships between professionals at the
two agencies.
Over the next several years, the collaboration between theses two agencies is expected
to increase as the market for medicinal products becomes increasingly global and
budget-constrained regulators continue to rely on external resources for the information
they need to provide accurate, timely decisions for product candidates. As this occurs,
the regulatory approaches utilized by the FDA and EMEA will become increasingly
similar.

One recent example of the convergence of regulatory approaches between the FDA and
EMEA is the new orphan drug approval process established in Europe. The U.S. has
long had a process encouraging manufacturers to develop medicines for rare diseases,
with the Orphan Drug Act of 1983 offering incentives for such activities. In 2006, the
EMEA established a similar category of drugs, offering accelerated review to products
that address rare conditions. In late 2007, the FDA and EMEA came to an agreement
whereby the same application could be used for both agencies, thereby reducing the
investment of time and money required of companies to apply for orphan drug status.
Although the two agencies continue to maintain separate approval processes, the ability
to use a single application for approval in both regions is expected to further boost
orphan drug applications in Europe as well as the U.S.
143
Conclusion
Over the next several years, the FDA and EMEA are expected to maintain a strong
focus on drug safety. While this will be balanced by the need to continue to reduce
approval times, drug safety will remain paramount, especially in the United States.
Despite attempts by both regulators to work cooperatively and share information, this
is likely to lead to increasing requests for more comprehensive clinical data, both prior
to and following marketing approval.
144
145
Chapter 6
Appendix
Index
Abbott, 22, 24, 25, 82, 127, 132
eCTD, 94, 96, 97
ABPI, 126
EFPIA, 125
Adolor, 83
Elan, 103, 104, 106
Advisory Committees, 45, 49, 75, 98
Eli Lilly, 82, 83, 122
AERS, 134
ENCePP, 140
Alexion, 102
EudraVigilance, 97, 140
ANDA, 23, 41, 73
FDA, 60
AstraZeneca, 58, 66, 75, 118, 127
Gene Logic, 117, 122, 123
Barr Laboratories, 67, 71, 80, 83
Generic, 21, 22, 59, 95
Bausch & Lomb, 67, 73
Genomics, 117
Biogen Idec, 103, 104
Genta, 103
BioPartners GmbH, 103
GlaxoSmithKline, 22, 25, 33, 44, 67, 76, 77,

82, 83, 110, 118, 123, 127, 132
Boehringer Ingelheim, 82, 83

GPC Biotech, 83
Bristol-Myers Squibb, 67, 78
Guerbet, 111
CDC, 52, 128
Hana Biosciences, 83
CDER, 45, 48, 49
IFPMA, 125, 126
CHMP, 88, 91, 92, 97, 98, 102, 104, 107, 112,
113
Johnson & Johnson, 22, 24, 25, 26, 33, 67, 70,
127
CMS, 52, 135

JPMA, 125, 126
COMP, 91
KineMed, 123
Critical Path Initiative, 135
Les Laboratoires Servier, 103
CRO, 14, 115, 120, 121
Ligand Pharmaceuticals, 61
CTD, 94, 96
MDS Proteomics, 123
Cypress Bioscience, 123
146
Melior Discovery, 122, 123
Pfizer, 25, 32, 33, 55, 60, 61, 67, 68, 110, 111,
118, 122, 127
Merck, 10, 11, 18, 22, 25, 27, 31, 32, 33, 39,
43, 50, 55, 67, 78, 79, 83, 110, 111, 118,
122, 132, 137
PhRMA, 35, 37, 124, 125, 126

PIM, 15, 131, 140, 141
MRP, 20, 23, 88, 89, 90, 92, 93, 94, 95

Pozen, 60
Mylan, 75
Procter & Gamble, 60, 67, 75
National Competent Authorities, 94, 95, 99,
100, 107
Protherics, 112
NCI, 135
Repositioning, 123
NDA, 20, 40, 42, 47, 53, 60, 61, 62, 70
RMS, 92, 94, 95
NeuTec Pharma, 103
Roche, 25, 33, 76, 77, 83, 118, 122, 132
New Drug Application, 60
Sanofi-Aventis, 68, 82, 83, 103
NICE, 126
Schering-Plough, 25, 57, 67, 68, 69, 70, 75, 76
NIH, 52, 128
Schwartz Pharma, 73
NME, 56, 57
Scientific Advisory Groups, 12, 87, 98
Novartis, 25, 33, 57, 61, 62, 67, 73, 74, 75, 76,
82, 111, 127
SME, 113, 141

Sosei, 123
Ocimum Biosolutions, 117
Supergen, 83
Organon, 33, 122
Trimeris, 83
Orphan Drug Act, 11, 39, 54, 144
Voluntary Genomic Data Submission, 143
OTC, 48, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74,
75, 76, 77, 78, 79, 80, 110
WellPoint Health Networks, 68
PDUFA, 51, 54, 136
Wyeth, 25, 33, 57, 70, 82, 106, 112
147

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Drug Approval Trends at the FDA and

Copyright 2008 Business Insights Ltd

The shifting regulatory landscape

Drug approval trends at FDA

Drug approval trends at EMEA

Global drug approval trends through 2012

The shifting regulatory landscape

Drug usage in the U.S. and Europe

New molecular entities

Drug approval issues

Ensuring drug safety

Safety shortfalls: rising adverse drug reactions

Drug approval trends at the FDA

Drug approval process

Future directions in the FDA drug approval process

Future directions in drug safety reviews

Future directions in speeding drug approvals

Delaying risky applications

The future of biosimilar approvals

Future directions in nonprescription drug approvals

Drug approval trends at the

Drug approval process

The Mutual Recognition Procedure (MRP)

Future directions in drug safety testing

Delaying risky applications

Improving safety testing

Raising investment in R&D

Future directions in R&D investment

Public reporting of clinical study results

Future directions in clinical data reporting

Future directions in regulatory support

Global drug approval trends to

Trends at the FDA

Trends at the EMEA

Convergence of regulatory approaches

Orphan drug approvals

Drug safety risk spectrum

Selected indication expansions for U.S. commercialized drugs, 2002 - 2007

Mercks withdrawal of Vioxx has galvanized public scrutiny of drug approval

Expanding R&D activities to ensure that compounds submitted for approval

Drug approval trends at FDA

Despite ongoing attempts by FDA to increase the availability of medicines, there

FDA is attempting to reduce approval times for generic medicines and is

Drug approval trends at EMEA

In Europe as in the U.S., increasing reports of adverse drug reactions, expanding

Despite improvements in processing speed and volume, the EMEA is reportedly

In its approach to biosimilars, the EMEA has a significantly more comprehensive

Pharmaceutical and biotech companies continue to work aggressively, both

Global drug approval trends through 2012

The EMEA has recently implemented legislation aimed at promoting innovation

As globalization continues throughout the pharmaceutical, healthcare and other

The shifting regulatory

The shifting regulatory

Mercks withdrawal has galvanized public scrutiny of drug approval processes,

As more blockbuster drugs lose patent protection and R&D productivity

Expanding R&D activities to ensure that compounds submitted for approval

Drug usage in the U.S. and Europe

New molecular entities;

generic drugs, which are based bioequivalent to previously approved products;

previously approved drugs seeking expansions of their original indications.

New molecular entities

the drugs proposed labeling is appropriate;