Senator Sanders has offered an amendment to the Food and Drug Administration Safety and Innovation Act of 2012 that would require drug sponsors to disclose the costs of pre-clinical research, clinical trials and related R&D, as well as grants, economic incentives that subsidize drug development costs, and also report quarterly sales and revenues, register all clinical trials at www.clinicaltrials.gov, and report detailed descriptions of each clinical trial participant’s results.
To no one’s surprise, this amendment is opposed by the pharmaceutical industry.
The following is a May 18, 2012, memo to Senate from Andrew Emmett. Emmett, who lists the Sidwell Friends School (1983 – 1997) in the education section of his Linked-in profile, is the Managing Director, Science and Regulatory Affairs at Biotechnology Industry Organization (BIO). The memo sets out the industry talking points in opposition to the transparency amendment. KEI’s commentary of the BIO memo follows.
Oppose the Sanders Transparency Amendment and Efforts to Disclose Confidential, Competitive InformationDuring consideration of the Food and Drug Administration Safety and Innovation Act of 2012, Senator Sanders (D-VT) is expected to offer an amendment (#2110) that would require drug sponsors to disclose the costs of pre-clinical research, clinical trials and related R&D, report quarterly sales and revenues, register all clinical trials at www.clinicaltrials.gov, and report detailed descriptions of each clinical trial participant’s results. This information would then be made public. Some of the information related to this amendment is already provided to FDA and NIH, while other information is considered confidential commercial information. Such premature disclosure of sensitive business information could undermine the competitive standing of U.S. biotechnology and pharmaceutical companies and undermine America’s lead in the life sciences. For these reasons, the amendment should be opposed.
- Disclosure of Confidential R&D Information can Undermine a Life Science Companies’ Competitive Standing: The Amendment would require that drug sponsors disclose the “total amount expended for pre-clinical research and for each phase of clinical trials of the drug”, as well as grants, economic incentives, and “such other information, as the Secretary may require. Biopharmaceutical companies expend enormous resources on R&D and clinical development programs. However, to protect their competitive position and not tip their business strategy to competitors, private companies are not required to publically report this information. Rather, aggregated, de- identified information is often collected by accredited academics to provide periodic estimates of the cost of modern drug development. Only one out of every 250 compounds that enter pre-clinical testing are ultimately approved by FDA for marketing, so it is important to understand both the successes and failures to fully appreciate the economic dynamics of drug development. Finally, granting FDA authority to require “such other information, as the Secretary may require” represents a sweeping, unprecedented expansion of regulatory authority into the private sector.
- Congress should not Undercut the current Administrative Expansion of ClinicalTrials.gov: The bill would also require that all clinical studies be reported with www.ClinicalTrials.gov. Under the FDA Amendments Act of 2007 (FDAAA), this registry and results database was expanded and a rulemaking process is currently pending to potentially expand the database to include additional types of information, such as study results for non-approved products, adverse event reports, non-promotional summaries. It is appropriate for the rulemaking process to expand ClinicalTrials.gov beyond studies relating to serious or life-threatening conditions, to include the voluntary registration of all confirmatory trials that evaluate both safety and efficacy in patients who have the disease or condition to be treated, diagnosed, or prevented. However, Congress should not further expand the database reporting requirements until the provisions of FDAAA have been fully implemented and the rulemaking process has been completed.
- Study information is Already Submitted to FDA in Clinical Protocols: The bill also directs sponsors to report the number of patients participating in a trial, the dosage, and participant results. This type of information is typically included in study protocols submitted to FDA and marketing submissions. It is redundant to require this information be submitted again. Further, even though it would be de-identified, it would be inappropriate to publically disclose this information, particularly participant results, during a blinded, randomized study, which could lead to bias and weaken the study data. In light of the ongoing HHS effort to unify various regulatory systems that protect patient privacy, and to expand patient privacy protections, this Amendment is out of step and conflicts with other Administration priorities.
KEI Commentary
Economic data
It is interesting that BIO begins it memo with assertions about the great expense of drug development, in a lobbying effort to suppress Independent information about such costs. Andrew Emmett says that such disclosure would “tip their business strategy to competitors,” and is really unnecessary, since
“aggregated, de- identified information is often collected by accredited academics to provide periodic estimates of the cost of modern drug development.”
One assertion is that the disclosures of drug development costs would unfairly prejudice the company’s business interests. At present, publicly traded companies already have to disclose information of material interest to investors, and as a consequence of these obligations, many BIO member companies already report outlays on clinical trials, and most companies report the sales revenue from its most successful products, often on a quarterly basis.
It is true that such disclosures are in some cases more limited than those proposed by the Sanders transparency amendment, but only in degree, and not in kind, and the limitation is due to the purpose of the SEC rules on disclosures, which are to inform investors, not taxpayers or consumers.
The revenues and prices for products are now available to a company’s competitor, through expensive private databases, such as the IMS database, or the Thomson Redbook online. These data are not readily available to policy makers, or voters, but they are hardly secrets to the companies selling products.
The Sanders amendment seeks to give taxpayers and consumers the information that is necessary to evaluate the costs and benefits of various government granted monopolies and subsidies — the one the drug companies keep demanding are needed, because of the largely undocumented costs of drug development.
Emmett’s suggestion that the public can depend upon “de- identified” data from “accredited academics” on average cost of drug development is quite telling. At present the large drug companies primarily use the work of the Tufts Center for Drug Development as an industry funded source of data that is spun to benefit industry lobbying efforts, supplemented by a group of economists that PhRMA has referred to as their ”intellectual echo chamber of economists” [See: Robert Pear, “Drug Companies Increase Spending on Efforts to Lobby Congress and Governments,” New York Times, June, 2003).
By “accredited academics”, one has to ask, who provides the accreditation to have access to non-disclosed project level data? The answer, of course, is the PhRMA and BIO member companies who lobby the Congress.
When does this information become relevant? Here are some examples. Bayer opposes a compulsory license on Nexavar, because of its great, undocumented, R&D expenses on the drug. Norvartis opposes a compulsory license on Gleevec, because of its great undocumented expenses on R&D. Abbott claims to have spent $300+ million on development of ritonavir, but does not provide details. Companies want all sorts of patent extensions, pediatric testing exclusivity, test data exclusivity, antibiotic exclusivity, etc, without ever providing useful information to evaluate the costs and benefits of the monopoly. S.1138 proposes a new Prize Fund for HIV/AIDS. Is the $3 billion per year fund enough? It would be good to know what the industry is actually spending on R&D for new AIDS drugs.
One obvious inference is that BIO member companies do not want the public to have better and more independent information on drug development costs. If not, why not? Perhaps because the stories told by the “accredited academics” with privileged access to drug development costs would not be as credible if there was more competition from a broader set of independent academic and non-academic researchers and policy wonks.
In the meantime, does anyone in the Congress actually know what the private sector spends on clinical trials for AIDS drug development? Do they know how much it costs for the trials that justify the pediatric marketing exclusivity? Can they explain what it costs to get an orphan drug designation, or what the impact of the designation is on the prices of an older generic drug that is suddenly re-classified as a monopoly? And, if not, is this ignorance really appropriate for a legislative body?
Medical issues
KEI is not in a position to address some of the points BIO raises as regards disclosure of medical data from trials, but to the extent that any have merit, the solution would be to accommodate the narrow concerns, rather than block the whole amendment. Among the major reasons to have more transparency and openness are the deplorable conflicts of interest that are routinely evident in the evidence that is use to justify the use and valuation of medical inventions.