WASHINGTON (Dow Jones)--Congress's watchdog arm has criticized the Food and Drug Administration for creating the appearance of favoritism toward a Boston company that won lucrative first rights to sell a generic drug after providing free consulting work to the agency.
On Tuesday, a congressional committee plans to release a report by the Government Accountability Office that says the FDA risked giving the appearance that it had compromised its integrity because of its dealings with the company, Momenta Pharmaceuticals Inc. (MNTA).
Winning the first right in July to sell the generic version of the blood thinner Lovenox has already meant hundreds of millions of dollars in sales for Momenta and its partner, Novartis AG's Sandoz unit (NVS, NOVN.VX).
(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)
Also critical of the FDA's actions are Momenta's rivals--including Teva Pharmaceutical Industries Ltd. (TEVA, TEVA.TV), the world's largest generic drug manufacturer, and Amphastar Pharmaceuticals Inc.--as well as a recently retired official in the FDA's generic-drug division. The drug companies' applications are still awaiting FDA action.
The controversy centers around Momenta's performance of months of free work for the FDA during a high-profile investigation of tainted Chinese drug imports in 2008. At the same time, agency officials were reviewing the company's application to sell the generic version of a blockbuster blood thinner.
As a result, "agency officials ran the risk of undermining public confidence in the integrity of FDA's operations," including drug approvals, the report says, according to a copy reviewed by The Wall Street Journal.
In response to the report, the FDA said it needed to draw on Momenta's expertise to find the cause of the tainted Chinese imports, but it acknowledged it should have considered potential conflicts of interests and done more to disclose them.
The FDA said its reliance on Momenta's free work had nothing to do with its approval of the company's drug ahead of competitors'.
Momenta said it conducted the investigation for the FDA in the interest of public health, not because of its drug application.
Momenta's newly approved product is a generic version of a fast-acting form of heparin. Until the July approval, Sanofi-Aventis SA's (SNY, SAN.FR) Lovenox drug had a monopoly on that market, with world-wide sales last year that topped $4 billion.
Since Momenta and Sandoz won FDA approval for their rapid-acting heparin in July, the drug's sales have topped $300 million.
The small biotech company doesn't have other marketed products.
Teva officials told the Journal that the company met with the FDA in October and complained about possible bias. It said its application, which was filed two years before Momenta's, is stuck in bureaucratic limbo, and that it received delayed notice when the FDA changed the terms for evaluating the drugs.
Amphastar filed the first application to make generic Lovenox in 2003. It says the FDA told it in late 2007 that it met the standards for "sameness" but then the standards changed. The company sued the FDA in October, alleging favoritism.
Richard Adams, a former official in the FDA's generic-drug division who retired this year, agreed with the bias allegation. "Everyone closely involved saw that it was stacked and the whole direction was toward Momenta," he said.
Momenta's chief executive, Craig Wheeler, has said that the company's science for copying complex drugs such as Lovenox surpasses that of other companies. Its scientists have spent more than a decade developing ways to pinpoint the molecular structure of Lovenox, he said.
The FDA turned to Momenta for help in early 2008, when it was trying to figure out what was tainting a widely used older form of heparin. Hundreds of people were suffering severe shock after taking the drug, which was linked to 81 U.S. deaths that year.
The FDA said that Momenta's researchers did an excellent job identifying the contaminant. "This successful effort to protect public health would not have been possible without the unique expertise and extraordinary efforts of the outside scientists," it wrote in a response to the GAO.
In October, the FDA changed its rules for bringing in outside experts during a crisis, though it didn't publicize the action. A spokeswoman said it acted in response to the report's findings.
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