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The FDA’s Concession Conundrum

TAGline Fall 2015

Can regulatory incentives promote responsible TB drug development?

By Lindsay McKenna and Erica Lessem

There are woefully few drugs in development with the potential to improve the safety and effectiveness of tuberculosis (TB) treatment. Indeed, the market-driven approach to drug development leaves most diseases not affecting wealthy countries without viable treatments and cures. To stimulate drug development for these conditions, the U.S. Food and Drug Administration (FDA)—which cannot mandate development—offers regulatory incentives; these incentives are of varying utility in the case of TB. Some, like accelerated approval and aspects of the Orphan Drug Act, have likely played a large role in the development and 2012 approval of bedaquiline, a muchneeded new drug to fight multidrug-resistant TB. Others actually hinder regulatory processes and the conduct of high-quality research, which can result in limited access and affordability.

The Orphan Drug Act includes a range of provisions to attract investments in the development of treatments for orphan diseases (conditions, such as TB that affect fewer than 200,000 people a year domestically). The useful, or at least benign, incentives in this act include waived application fees, product development grants, tax credits, and priority review for eligible products. Since the act’s inception in 1983, the FDA has granted 3,280 orphan drug designations to more than 4,500 candidates, ultimately approving 511 of them. TB drugs with orphan status include moxifloxacin, rifapentine, bedaquiline, delamanid, pretomanid, and clofazimine; importantly, rifapentine and bedaquiline have FDA approval for TB, making them the first new TB drugs developed since the 1960s.

Yet the Orphan Drug Act includes two deeply flawed provisions. First, it offers seven years of exclusivity following approval. Depending on the timing of registration and patent filings, this can add an additional seven years of marketing exclusivity to patents, which expire 20 years from the date of patent filing. These provisions hinder affordable access by blocking generic competition. After attracting drug developers through tax breaks and free applications, and then offering public funding for the development of products, the Orphan Drug Act goes too far in allowing developers monopolies on drugs developed with public support. Second, the Orphan Drug Act offers developers an exemption from the standard pediatric study requirement, which can delay and even entirely prevent access to new treatments for children who desperately need them (see text box).


Orphaned by the Orphan Drug Act

Children, who are especially vulnerable to a range of diseases such as TB, are often neglected by market-driven development of new treatments. For TB specifically, children tend to have less TB bacteria in their sputum and more TB disease outside of the lungs, making it more difficult to detect, which challenges both enrollment and endpoint collection for TB trials and leaves most childhood TB undetected, resulting in a small drug market. More generally, perceiving children as riskier to include in research, the development of pediatric formulations as costly or timeconsuming, or pediatric markets as less profitable, drug sponsors are slow to opt in to formulating and testing new treatment options for children. To counteract this, the Pediatric Research Equity Act (PREA) of 1997 mandated that developers of new drugs must conduct pediatric studies. But the Orphan Drug Act effectively sidesteps the PREA for orphan drugs, creating an exemption from pediatric research requirements for qualifying drugs.

In the name of stimulating drug development, the Orphan Drug Act allows developers to shirk their responsibility to collect data critical to informing safe and effective treatment in children and, in turn, to provide children access to new lifesaving treatments. This dangerous exemption renders pediatric development an optional, rather than mandatory, step toward drug approval, delaying timelines and often leaving it to publicly funded research consortia to pick up the slack—and the bill.

Other incentives for pediatric drug development fall similarly flat. The 1997 FDA Modernization Act (FDAMA) aimed to offer a financial incentive for pediatric research by offering an additional six months of marketing exclusivity. However, under the FDAMA, the FDA is only able to issue requests for pediatric studies; companies may oblige or not. While 211 approved drugs have been granted pediatric exclusivity, none were studied for a TB treatment indication in children. Worse, the FDA grants pediatric exclusivity on acceptance of requested pediatric study reports rather than approval of labeling containing information on pediatric use—meaning that developers may never finalize development of or market their drugs for children. Moreover, once pediatric exclusivity is granted for research conducted in older children, there is no further incentive for conducting necessary studies in younger age groups.

The 2002 Best Pharmaceuticals for Children Act (BPCA), reauthorized in 2007, extended the FDAMA six-month marketing exclusivity provision. It also tasked the U.S. NIH with establishing a program for pediatric drug development and with conducting studies on priority drugs after manufacturers decline to do so. While the BPCA is intended to ensure that pediatric studies are conducted, it further facilitates the shift in responsibility for pediatric studies from developers to public research networks.

Letting companies off the hook for something as necessary as pediatric research should not be offered up as an incentive. Removing the pediatric exemption for orphan diseases—which must be done, and is possible under the reauthorization of the Prescription Drug User Fee Act (PDUFA), expected in 2017— would still allow companies to benefit from other incentives that do not compromise patient access and safety. Building this amendment to the Orphan Drug Act into PDUFA is especially important, as opt-in alternatives have been predictably ineffective at ensuring timely completion of pediatric investigations, especially for orphan drugs with little expected market potential.


Another useful FDA mechanism is the accelerated approval pathway, which began with regulations in 1992 and was codified by Congress in 2012 with the passage of the Food and Drug Administration Safety Innovation Act. Accelerated approval allows for potentially lifesaving early market entry of drugs for serious conditions that fill an unmet medical need. It can be granted after phase II trials with surrogate or intermediate clinical endpoints and is conditional on the performance of full phase III trials with standard clinical endpoints confirming safety and efficacy. This mechanism facilitates interim access for patients (and income for developers), while requiring fuller evaluation of safety and efficacy data. However, the FDA lacks the resources to actually enforce the conditions of its laudable accelerated approval program—as of 2009, one of every three conditionally required studies had not been performed. And while the FDA does have the authority to remove conditionally approved drugs from the market if manufacturers fail to meet postmarketing trial requirements, the agency has never exercised this power.

This program has largely been useful for TB: bedaquiline was approved under it in 2012, paving the way for widespread access for patients with multidrug-resistant TB here and globally. But nearly three years later, the required phase III trial (which has now been redesigned so that bedaquiline will be tested as part of treatment-shortening standardized regimens in the largely publicly funded STREAM-II trial) has yet to start; it is in the process of getting regulatory approval in trial-site countries. This trial is critically important to confirm the safety and efficacy of bedaquiline and provide additional evidence to support its broader use. It is unclear that Janssen would have undertaken a phase III trial at all, and especially in a timely fashion, without a time-bound FDA mandate to do so—underscoring the need for more, rather than less, regulatory oversight and authority.

A regulatory incentive with less utility for TB is the priority review voucher (PRV) program. A PRV is essentially an award ticket given to manufacturers for expedited FDA review (within six months) of a future product following successful approval of a drug for an eligible condition. The PRV program is distinct from the priority review, fast track, and breakthrough therapy designations and accelerated approval pathway, which are designed to expedite FDA review of drugs that address an unmet medical need in the treatment of a serious or life-threatening condition. Originally introduced in 2007 to stimulate drug development for neglected tropical diseases (NTDs)—infectious diseases, including TB, that have no significant market in developed nations and that disproportionately affect poor and marginalized populations—the PRV program expanded to include rare pediatric diseases in 2012. As standard FDA review typically takes 10 months, a PRV facilitates quicker market entry for an approved drug. Theoretically, this allows drug sponsors earlier returns on investment and a comparative advantage over competitors whose products are still tied up in FDA approval processes. PRVs can be transferred or sold and thus can, in theory, reward developers of drugs for NTDs or rare pediatric diseases even if they do not plan to develop a second, more market-friendly drug. In 2015, AbbVie purchased a rare pediatric-disease PRV from United Therapeutics (developer of dinutuximab for neuroblastoma) for $350 million.

Yet, this seemingly compelling reward system has not attracted substantial investment in drug development for TB or other conditions. In fact, only six PRVs have ever been awarded, one of which went to Janssen for the development of bedaquiline. Like the Orphan Drug Act, the PRV program doesn’t require a drug sponsor to invest its own funds in the product to be eligible—a company can rely on public-sector research funding and even public entities to conduct research and still remain eligible to receive a PRV. Again similar to the Orphan Drug Act, the PRV program does nothing to promote access or affordability of approved products. The PRV system has not served to attract new funding for TB drug development and in fact encourages the status quo of the public paying twice—first, by funding research and, second, by paying high prices for the resulting drugs under public health programs.

What the FDA lacks is not incentives—the existing ones have reached maximal effect for stimulating TB drug development—but rather more power to enforce requirements for sound research, including pediatric drug development and the conduct of confirmatory studies following accelerated approval. Unfortunately, instead of providing additional necessary resources and power to the FDA, proposed new legislation, under the guise of stimulating innovation and expediting patient access to new treatments, threatens to further reduce the FDA’s ability to ensure public safety (see “The 21st Century Cures Act’s ‘Pathway to Crisis’ in Drug Safety”).

Regulatory incentives will not work if they detract from the FDA’s ability to properly regulate drug development and approval, a task that could become increasingly difficult given the FDA’s paucity of resources and the increasing legislative threats to its authority. Attempting to stimulate research and development through regulatory laxity will endanger the public. In the absence of a lucrative market, a better way to stimulate research is through additional funding (such as an increased budget for the National Institutes of Health [NIH] and other public funders of research). However, to ensure that those affected actually benefit from new treatments, public funding should come with conditions for access. We should also explore alternative systems for funding and rewarding drug development for diseases like TB, for which the current market- and patent-driven approaches may be fundamentally flawed. In the meantime, we need a stronger FDA that can set development requirements, ensure their execution, and act on developers’ failures to meet them.•

Utility of Regulatory Incentives for TB Drug Development

Incentive

Key Features

Legislation

Utility for TB

Accelerated approval pathway

  • Allows conditional approval based on surrogate or intermediate endpoint
  • Eligible for priority review

Section 901, FDASIA (2012)

Strong: Speeds access to new drugs without compromising research

Qualified infectious disease product designation

  • Fast track designation
  • 5 years exclusivity (added to exclusivity granted with approval)
  • Guaranteed priority review

GAIN Act–Section 801, FDASIA (2012)

Unclear: Intended to expedite development programs, FDA review, and time to market availability without compromising research

Priority review designation

  • 6-month review

(vs. 10-month standard)

PDUFA (1992)

Strong: Expedites FDA review and time to market availability without compromising research

Fast track designation[1]

  • Opportunity for frequent interaction with FDA
  • Rolling review of marketing application sections in advance of full submission
  • Eligible for priority review

Section 112, FDAMA (1997); Section 901, FDASIA (2012)

Unclear: Intended to expedite development programs; has shown utility for HIV drugs

Breakthrough therapy designation[2]

  • Intensive FDA guidance on development program
  • Rolling review of marketing application sections in advance of full submission
  • Eligible for priority review

Section 902, FDASIA (2012)

Unclear: Intended to expedite development programs; has shown utility for HCV drugs

Orphan drug designation

  • Waived fees
  • Development grants
  • Tax credits
  • Eligible for priority review
  • 7 years exclusivity
  • Pediatric research exemption

Orphan Drug Act (1983)

Strong: Offers generous incentives for entering an otherwise unattractive market (though exclusivity and pediatric research exemption limit access; see below)

Exclusivity

  • Exclusive marketing rights in the U.S.

GAIN Act (2012);

Orphan Drug Act (1983);

FDAMA (1997);

BPCA (2007)

Very limited: Likely to limit access to and affordability of drugs

Pediatric research requirement exemption

  • Exemption from studying orphan drugs in children

Orphan Drug Act (1983)

Very limited: Makes pediatric development optional, delays access for children, and shifts responsibility to public

Priority review voucher (PRV) program

  • 6-month review for future NDA

FDA Amendments Acts of 2007

Limited: Only 6 PRVs ever awarded, including 1 for a TB drug; valuable asset that retroactively rewards successful development but alone insufficient to stimulate upfront investment in TB drug development

 

[1] Features similar to those offered for breakthrough therapy designation, but fast track designation is granted at earlier stages of development with nonclinical or clinical demonstration of potential to address unmet need.

[2] Breakthrough therapy designation requires preliminary clinical evidence of improvement over existing therapies.