Life Science Compliance Update

February 10, 2016

BioSimilars: FDA Panel Overwhelming Recommends Approval of Remicade BioSimilar, Congress Asks Tough Questions of FDA and CMS

Yesterday an FDA Advisory panel overwhelmingly recommended the Celltrion/Pfizer biosimilar Remsima 21-3 for approval for all the clinical indications for Jannsen's Remicade including (RA, AS, PsA, PsO, adult CD, pediatric CD, adult UC). The discussions were straight forward outlining just how similar the two products really were.

This is only the second biosimilar to get an advisory committee. But given the FDA's staff enthusiastic analysis of the clinical program and the advisory panels whole hearted validation for all the questions before the panel we can expect to see the flow of biosimilar applications and approvals start to accelerate.


While Martin Shkerli was busy making fun of congress for discussing his Wu Tang album at the Government Oversight committee hearing. The real work to reduce drug prices was being held at the same time in the Committee on Energy and Commerce Subcommittee on Health, entitled, "Examining Implementation of the Biologics Price Competition and Innovation Act." The hearing was an opportunity for the Congress and the general public to get an update from the Food and Drug Administration (FDA) on the regulation and approval of biosimilars, as well as an update from the Centers for Medicare and Medicaid Services (CMS) on the recent reimbursement policy.

In 2010, the Biologics Price Competition and Innovation Act was enacted to establish a new and abbreviated approval pathway at the FDA for biological products that are determined to be "biosimilar" to or "interchangeable" with an already-FDA licensed product. In 2012, the Biosimilar User Fee Act was enacted to support the FDA's work related to the development, review, and approval of biosimilar products. The FDA has continued to issue guidance documents on key policy considerations, and in March 2015, the FDA approved the first biosimilar in the United States. CMS, in preparation for biosimilars entering the market, has published final rules that set the stage for how Medicare will reimburse for biosimilar products.

The Contentious Hearing

Throughout the hearing, members of Congress were fairly critical about the pace at which the FDA is approving biosimilars and how Medicare plans to reimburse for them. Committee members asked Janet Woodcock, MD, the Director of the Center for Drug Evaluation and Research, and Sean Cavanaugh, Deputy Administrator and Director of CMS' Center of Medicare, whether the two agencies had ever discussed the differences between generics of small-molecule drugs and biosimilars of large-molecule biologics.

Throughout the hearing, the subcommittee reviewed the ways that differentiate biosimilars and their regulation. Congress was concerned that the unique qualities of biosimilars are not being properly considered by CMS, and that the existing payment policy could negatively impact biosimilars that enter the market in the future, or even ultimately, wind up limiting beneficiary access and negating program savings.

Congressman Joe Barton, for example, one of the authors of the Biologics Price Competition and Innovation Act, seemed troubled that the CMS payment system for biologic drugs may discourage competition and that the FDA has not moved quickly enough to finalize a naming convention or issue guidance to manufacturers of biosimilar medications. His comments sounded a bit like a disappointed teacher, "As to how you've been doing with biosimilars, I would give FDA a C plus, maybe a C minus, and CMS a D. The only reason I haven't given you an F is because you're trying, you got something out there."

He further commented that, "today, we sit as a subcommittee with numerous concerns about the implementation – or more appropriately, the lack thereof – of this important piece of legislation. Only one biosimilar has been approved, and numerous products are waiting to proceed through the approval process, and many physicians, patients, and concerned individuals like myself are concerned with the lack of progress."

CMS Reimbursement Policy

The current CMS policy, published in November 2015, allows for biosimilars to be paid for, depending on the average sales price, using six percent of the reference product price as the add-on, and also groups all biosimilars that share the same reference product, with each product being reimbursed under the same code.

This creates concern because, as Rep. Frank Pallone, Jr., stated, it "treats biosimilars like generic drugs" and runs the risk of "disincentiviz[ing] manufacturers from entering the biosimilars marketplace." Pallone also reminded Congress and the witnesses that Medicare Part D and Medicaid both acknowledge the difference between biosimilars and generics in their own programs.

Congressman Joe Barton also asked Sean Cavanaugh whether or not the agency has plans to revisit how biosimilar drugs are priced. Cavanaugh simply stated that, "From a clinical perspective, CMS knows that biosimilars are not the same as generics. From a regulatory perspective, there are similarities. Consequently, we created similarities as to how biosimilars and generics are priced," and that CMS will be monitoring the market closely and that rulemaking could be possible in the future.

FDA's Delay

The Subcommittee was also displeased with the way the FDA has worked to implement the BPCIA, since only one biosimilar has been approved. The FDA has been dragging its feet on implementation, but Dr. Woodcock claimed that, "We've seen a lot of progress since 2010, although most of it has been under the hood. We did approve the first biosimilar in 2015, and on Feb. 9, 2016, FDA's Arthritis Advisory Committee is scheduled to hold a meeting to discuss a biosimilar to Remicade (infliximab), a biological product licensed by FDA to treat conditions such as rheumatoid arthritis, ulcerative colitis and Crohn's disease."

Woodcock emphasized that for biosimilars, it is important to her that the FDA applies "rigorous standards" and that while biologics are life-changing and cost-saving, "we don't intend to sacrifice on their performance with biosimilars."

Woodcock also placed a bit of blame back on Congress for the slow pace at which biosimilars and biologics are being approved, highlighting the fact that "Congress didn't appropriate any additional funding to the FDA to implement BPCIA. We took money from other activities." She did mention that the FDA has begun to collect more money under the user fee program, and that she is hopeful that the FDA will have more "robust funding" for biosimilars. Dr. Woodcock further expressed concern that "as more biosimilar applications come in, … we will not have the staff because we always seem to be waiting to catch up."

February 09, 2016

An Update on the Nomination of FDA Commissioner Robert Califf

An increasing number of senators are threatening to block Dr. Robert Califf's nomination to be the next Commissioner of the U.S. Food and Drug Administration. The story illustrates an unusual coalition of right and left-leaning members of the Senate, and common refrains about "industry ties" in government and medicine. Ultimately, arcane Senate rules allow the entire process to be stalled by these individual members of the body.

The U.S. Senate: Where things go to die (slowly)

Members threatening to block Califf's nomination include Senator Joe Manchin of West Virginia. He cited Califf's ties to the pharmaceutical industry and concerns over opioid abuse. He is joined by "Democratic Socialist" Bernie Sanders of Vermont. Presidential ambitions likely play some role in his decision to place a hold on Califf—a procedure that prevents the nomination from even coming to the Senate floor in the first place—and Sanders cites industry ties, along with Manchin.

The theatrics on the Senate floor could possibly include Manchin reading letters from West Virginia families dealing with opioid abuse, if the nomination ever gets past the hold stage. Senator Edward Markey of Massachusetts, also cites opioid concerns, along with Senator Ayotte of New Hampshire.

Not to be out done, Senator Murkowski of Alaska, a Republican, says she will hold up the vote unless the FDA changes its position on the voluntary labeling of genetically modified fish.

Califf helped establish Duke University's clinical research center and has acknowledged that his studies have received funding from pharmaceutical companies. But he insists that they had no ability to change or hide the results, and the Senate Health, Education, Labor and Pensions Committee approved his nomination with no dissenting votes earlier this year.

In Califf's corner against the unlikely alliance of diverse interests stands, President Obama.

"Obviously, the president and the administration have full confidence in the ability of our nominee to make the kinds of decisions that are in the best interest of the health and safety of the American people," White House press secretary Josh Earnest recently said at a briefing. "The president would not have nominated him to the job if he didn't think that he would be able to effectively look out for the interests of middle-class families in that role."

According to Senate rules, one senator is allowed to block a nomination vote unless 60 Senators vote to overrule the hold. And while it is not likely Califf's nomination will be held up indefinitely, the efforts of the senators to block Califf from moving forward highlight lawmakers' concerns over the approvals process at the FDA.

Positives of industry ties

A recent Medscape article addresses Califf's ties to industry and the Senate procedural hurdles facing the nominee. Although the industry ties are cited by politicians as a negative, a number of clinicians and medical professionals disagree. In the article, Medscape notes that a large group of doctors and organizations have publicly declared their approval of Califf as FDA commissioner, including the American College of Cardiology (ACC), the American Heart Association (AHA), and the American Psychiatric Association. The American College of Cardiology's president, Dr. Kim Williams, cited Califf's vast knowledge as a cardiologist and investigator which will be beneficial when dealing with a variety of conditions.

Dr. Jeffrey Drazen, editor of the New England Journal of Medicine stated that Califf's interactions with pharmaceutical companies is a strength instead of a weakness because Califf will be able to illustrate the intricacies of the relationships.

"The ability to know how the pharmaceutical industry works is probably key for a person in the position of an FDA commissioner or leader. You need someone who knows the issues . . . and can give some guidance," Dr. Williams said in the Medscape article.

It was further reported that the AHA's CEO, Nancy Brown, stood by her organization's support of Califf as she "cannot think of a better person" to lead the FDA, despite his ties to industry. This work, she notes, has been focused on clinical research and innovation—ultimately a positive for patients.

Many of the senators opposing Califf implicitly call into question his ability to act ethically having "ties" to industry. This is a foolish argument, at best, as noted by Dr. Robert Harrington, one of Califf's former colleagues at Duke who cited Califf's "highest level of integrity and honesty," according to Medscape. "He believes passionately in providing evidence for people to practice medicine. And he has been unfailing in his quest for the truth about what works and doesn't in a clinical setting."

Dr. Harrington's defense continues and serves as an important reminder of the positive outcomes from industry-physician collaboration: "I can't imagine there's someone who better understands the complexities of the issues, especially around the healthcare side of the FDA." Harrington added that many of the concerns brought up by the senators revolve around politics "and don't actually speak to his qualifications or suitability for the job."

And regarding talk about too-close pharma ties, "the reality, from a research perspective in cardiovascular medicine, is that to understand therapeutics, then one is almost certainly going to be doing collaborative research with industry," he said. Califf "does have a lot of relationships with industry. But they've always been appropriately managed and been very strict about their independence."

Medscape's article continues with a quote from AHA chief science officer Dr. Rose Marie Robertson, noting that Califf's experience over the years "gives him a broad view not only of the science of the drugs and devices used in his trials, but lets him understand and be critical of study design in a way that people who haven't had that experience would find very difficult to do."

FDA Changes Course

One of the objections to Dr. Califf's nomination is around the approval of opioids. Califf and others at the FDA recently called for a far reaching plan to reassess the agency's approach to opioid medications. The plan will focus on policies aimed at reversing the epidemic, while still providing patients in pain access to effective relief. Including requiring an advisory committee for the approval of new opioids, additional warnings to immediate release labeling, and updating REMS.

Tide is moving against Hold

Recent editorials seem to suggest there is a growing interest in seeing an up-or-down vote on Califf—one he would surely win. In an editorial, several papers wrote:

Senators are entitled to object to White House nominees, but Ms. Murkowski and Mr. Markey have gone further and placed a hold on the appointment. A hold is a maneuver permitted by Senate rules that allows a single lawmaker to block a measure from receiving a floor vote.

It is often used as a partisan weapon, in which a senator from one party can hold hostage the appointment of a president from the other party. Last month, no fewer than 28 Obama nominees — for judgeships, ambassador posts, terrorism finance specialist, and high-level state department positions — were on ice in the Republican-led Senate, some of them via individual holds.

The holds on this nomination aren't partisan payback, but they're just as insidious because they deny the full Senate a chance to vote.


February 05, 2016

Testy Oversight and Government Reform Committee Hearing on Prescription Drug Pricing

The United States House Oversight and Government Reform Committee held a hearing on developments in the prescription drug market. What was particularly interesting about this hearing, compared to past hearings on drug pricing and the current drug market, was that an executive was present from each of the two most-disliked pharmaceutical companies in the country, Turing and Valeant. Also present was Dr. Janet Woodcock, Director of the Center for Drug Evaluation and Research at the Food and Drug Administration (FDA) and Mr. Mark Merritt, the President and Chief Executive Officer of the Pharmaceutical Care Management Association.

The hearing was a fairly contentious one, with Congressman Cummings coming out of the gate packing heat, saying that he doesn't believe the pricing tactics that have been seen at companies like Turing and Valeant are "limited to a few bad apples," and that instead, he believes most of the pharmaceutical industry is looking to make quick money off of patients who desperately need their treatments to live.

The tension did not stop there; during opening statements, when it came time for Martin Shkreli, the disgraced former-CEO of Turing Pharmaceuticals, to make his opening statement, he opted to "invoke his Fifth Amendment privilege" based on "advice of [his] counsel." When questioned further by Chairman Jason Chaffetz, it became clear that Shkreli was not planning on answering any questions Congress had for him, even though he had previously talked about being excited to "school Congress" in television interviews.

After a five- to ten-minute long sideshow of Representative Trey Gowdy talking to Shkreli about what the Fifth Amendment does and doesn't protect, Chairman Chaffetz asking additional questions (and receiving the same response of invoking the Fifth Amendment), and Rep. Cummings asking Shkreli to push his former company to lower drug prices and for him to become a "poster child" of prescription drug accessibility, Shkreli was excused by the Committee. Following Shkreli's excusal, Representative John Mica asked Chairman Chaffetz to consider holding Shkreli in contempt of Congress. While Chairman Chaffetz did not seem to take to the idea then, who knows what may happen in the future. Especially after Shkreli went on Twitter, calling Congress "imbeciles," as seen below. Welcome to the Circus.

Once Shkreli left, and it was only adults in the room (depending on your feelings of Congress, one might disagree), the hearing proceeded as normal. Once Shkreli left, however, the tension remained thick in the room – no one sitting at the witness table seemed to have a single friend on the Committee. All members were tough on the witnesses, asking (some) relevant questions as to how to lower the consumer cost of drugs.

Nancy Retzlaff, the Chief Commercial Officer of Turing, got a lot of heat for the price hike of Daraprim. She did try to talk around it, stating that they do a lot of scholarships, and that two-thirds of patients on Daraprim receive the drug through government programs and receive a discounted price of approximately one penny per pill, but that did not seem to be good enough for the Oversight Committee members present. They either weren't buying what she was selling, or were trying to draw out of her some ideas for long-term, sustainable, changes that can be made to make pharmaceuticals more affordable to patients.

Turing Code of Conduct

Interestingly, as a footnote on compliance and ethics matters, prior to Shkreli's dismissal, Turing did not have a Code of Conduct. Following his dismissal, however, that has supposedly changed, though information on the new Code of Conduct cannot easily be found online.


Retzlaff also received an earful when she claimed that Turing was losing money" yet the committees documents show Turing spending huge sums on salary increases and lavish items including yacht rental, fireworks, celebrity performances and nightclubs. This is clearly where an active ethics and compliance program may have kept them out of significant trouble.

Everyone's Guilty

Besides Turning, there were significant questions posed towards Howard Schiller the Interim CEO of Valeant Pharmaceuticals. Mr. Schiller was forced to defend the almost total historical lack of R&D spending by Valeant and the significant price increases of two of their products. 

Mr. Schiller was forthright in his discussion about Valeant’s pricing strategies. He admitted to pricing drugs based on “revenue goals” and that price increases accounted for 80 percent of the company’s growth in the beginning of 2015. He said that their pricing strategy was “too aggressive” in some cases. He noted in the future Valeant would not be looking for opportunities to buy compounds and then raise prices.  Valeant was also questioned on internal memos received by the committee, where they discussed raising the prices of two of their drugs as the increase being passed on to hospitals because those drugs are reimbursed as part of the procedure.  

The FDA was not off the hook either, as Janet Woodcock, MD was forced to defend the delays in approvals at the office of generic drugs. Many of the members questioned Dr. Woodcock on the backlog of generic applications at FDA, their concern being that slow application approvals prevented competitors from entering the market. In response to questions Dr. Woodcock said FDA was behind when they started the accelerated program under GDUFA. She said at this point there are only 600 applications outstanding. Starting in October,she said, FDA will have a goal to decide new generic applications within 10 months. Reps also commented that the FDA backlog was perhaps creating the market conditions leading to the abusive pricing practices they were discussing.

Mark Merrit the President and CEO of the Pharmaceutical Care Management Association also took hits for spread pricing where the Pharmacy Benefit Manager (PBM) receives the higher price from the insurance company but reimburses the pharmacy at the previous price, he was questioned on the potential conflict of interest of the practice of PBM's owning specialty pharmacies.  He was also questioned about predatory marketing,  and other pharmacy benefit management practices.

The Panelist included:

Dr. Janet Woodcock

Director, Center for Drug Evaluation and Research

U.S. Food and Drug Administration



Mr. Howard B. Schiller

Interim Chief Executive Officer

Valeant Pharmaceuticals International, Inc.



Mr. Martin Shkreli

Former Chief Executive Officer

Turing Pharmaceuticals LLC


Ms. Nancy Retzlaff

Chief Commercial Officer

Turing Pharmaceuticals LLC



Mr. Mark Merritt

President and Chief Executive Officer

Pharmaceutical Care Management Association



What is the Solution?

This hearing did not offer much in the way of solutions to rising pharmaceutical and prescription drug costs. In order for any real movement or change to be made, Congress will likely need to dial back on the heat and rhetoric. There is no doubt that this is a "hot topic," and one that draws ire from many American citizens. However, as the old saying goes, you catch more flies with honey, and if Congress and the FDA would work not only with each other, but also with groups like the Pharmaceutical Care Management Association, and pharmaceutical and generic manufacturers, real solutions could be proposed, and timelines created. With rhetoric flying back and forth, and pharmaceutical companies feeling the need to staunchly defend themselves, few solutions can be though of, and little can actually get done.

While no solutions really came from the hearing, one potential idea to lower drug costs and promote healthy competition is for the FDA to institute a rule that if a generic manufacturer raises generic drug prices by a certain amount (such as 50%, 100%, or 200%), the FDA will then "fast track" any generic drugs currently in the pipeline, or applied for after the fact, with an average of a four-month approval time. Additionally, if any company raises generic drug prices by the specified amount, overseas companies should be permitted to submit applications.  The FDA also needs additional resources to accomplish a streamlined approval process for generic drugs, one area congress has not shown interest in doing.

This would help promote the free market and healthy competition, while still permitting pharmaceutical companies to turn their necessary profits, and allowing patients to access the lifesaving drugs they need.

These hearings are sure to continue, with different committees of Congress trying to hear different viewpoints, while making sure to get their points across. We await the hearing that finally comes up with a palatable solution, and are eager to write up that story.


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