Biotech Values

[DewDiligence]

FDA Is Creating Monopolies, Says Wyeth’s Outgoing CEO

[The FDA has seemingly created a higher barrier to drug approval than mere safety and efficacy, at least in some segments of the drug market. Is this within the Agency’s legal mandate?]

http://us.ft.com/ftgateway/superpage.ft?news_id=fto110420071721241727

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By Christopher Bowe
Nov 4, 2007

The leading US drug regulator "is establishing monopolies" by denying approval to drugs, says Bob Essner, outgoing chief executive of Wyeth (NYSE:WYE) .

Mr Essner said the Food and Drug Administration was blocking new drugs after their efficacy was compared to those already on the market. He said this was beyond its mandate and could prompt legal action.

Drugmakers fear that the FDA could be going too far by evaluating drugs with criteria beyond its legal mandate, which is to determine that a drug is safe and that it works.

Mr Essner expressed concerns that FDA assessments now include whether a drug can work better than an existing product, instead of allowing the market to determine what it wants.

"If you're the first company to get approved in a certain area and competitors can't get on the market, the FDA is now establishing monopolies. And that's certainly not their mandate," Mr Essner told the Financial Times in an interview. "It could well be legally challenged. Although that may not be a formal standard, it does appear to be a growing practice."

Other chief executives of big drugmakers are also expressing frustration that the FDA is over-reaching its mandate.

Dr Dan Vasella, chief executive of Novartis of Switzerland, told the FT last month: "The discussion on what this [drug] brings over and above what's on the market is a question that's being asked. The FDA doesn't seem to trust the physicians any more."

The concern is that the FDA is overcautious following drugmaker Merck's sudden withdrawal of painkiller Vioxx three years ago be¬cause of heart risks.

A more cautious FDA affects drugmakers by delaying or blocking approval for drugs to sell in the world's most lucrative pharmaceutical market.

The FDA said it "does not have what is called a 'comparable effectiveness' standard for drugs. We do consider other products already available as we make benefit/risk decisions for new products."

Wyeth and Novartis have both had FDA approval denied for bifeprunox, a schizophrenia treatment, and Prexige, a painkiller, respectively. [NVS also got an approvable letter for Galvus requiring more clinical studies despite having a dossier that was similar to the one for MRK’s Januvia.]

Part of the assessment of these drugs included a broader discussion of their place in the market, or comparison to alternative treatments' effectiveness.

Wyeth says bifeprunox is valuable because it has significantly fewer side-effects than available treatments.

The group has had three new drugs delayed or rejected this year - Viviant, for osteoporosis; antidepressant and menopause treatment Pristiq; and bifeprunox.

This has cut its share price far too much, Mr Essner said, because the company is confident in their ultimate approval.
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