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Drugmakers Upset Approval System Plan Biotechs Sought

(Corrects comment mistakenly sourced to Glaxo spokeswoman by deleting it from the eighth paragraph)

Drugmakers have fought off a U.S. senator’s proposal that would have approved medicines for diseases that are fatal, or have no existing treatments, based on fewer human trials.

The plan, drafted by Democratic Senator Kay Hagan of North Carolina, was supported by biotechnology companies to speed up approvals and make the process less expensive. It would have created a program with the flexibility to allow drugs to be cleared based on any testing that shows they may be effective. This may include early trial results, interim data and use of so-called biomarkers that measure the effects of a molecule on biological functions linked to a disease.

The unusual dispute pitted biotechnology companies struggling to finance extensive trials against larger drugmakers who often trade financial aid in return for sharing sales later, said Erik Gordon, a business professor at the University of Michigan in Ann Arbor.

“Smaller biotech companies often can’t raise enough money on their own to do the currently-required safety trials, so they want to dilute the rules to let them get approvals without having to give big pharma a cut of the action in return,” said Gordon, who is based in Ann Arbor, in an e-mail. “Big pharma says ‘don’t dilute safety measures for new drugs.’ That sounds better than ‘we want to keep our cut of the action.’”

People gather at the Biotechnology Industry Organization's international convention in Washington, D.C., on June 28, 2011. Photo: Rich Clement/Bloomberg Close

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People gather at the Biotechnology Industry Organization's international convention in Washington, D.C., on June 28, 2011. Photo: Rich Clement/Bloomberg

Biotechnology Organization

The rift played out within the Washington-based Biotechnology Industry Organization, a group that includes both smaller companies such as Acorda Therapeutics Inc. (ACOR), with $1 billion market value, and Glaxo, with a value of $71 billion.

The group’s board is organized into different sections, reflecting the size of their companies. Most of the emerging companies’ group backed the proposal while members from larger companies --including GlaxoSmithKline Plc (GSK) and Pfizer Inc. (PFE) -- mostly didn’t support it, said Chief Executive Officer Ron Cohen of Hawthorne, New York-based Acorda.

Glaxo disagreed with the original proposal, said Sarah Alspach, a spokeswoman for the London-based company. “Our preference is to modify existing tools and programs that are familiar to regulators and regulated companies, rather than create new ones,” she said,

Cohen said safety concerns dominated the debate. “It was very clear by creating a new track we were going to engender so much anxiety and suspicion up front that we were going to never get to the meat of the proposal,” he said in a telephone interview.

Expanded Program

As a result, the industry group now supports a new plan to expand an existing accelerated-approval program for cancer and HIV drugs to include other products aimed at fatal diseases or those with few or no cures, said Jim Greenwood, the organization’s president and chief executive officer.

Hagan plans to introduce the new proposal in Congress this year, he said. The revived proposal does allow companies to use so-called surrogate endpoints showing a molecule’s effects on biological activity. They also must later prove clinical outcomes.

Mary Hanley, a Hagan spokeswoman, declined to comment, as did Peter O’Toole, a spokesman for New York-based Pfizer.

John Vernon, an assistant professor of health policy and management at the University of North Carolina, said the original proposal was seen as a no-win proposition for large drugmakers for several reasons.

“I could see how it would be a threat to have a new process, to think about how to redefine efficacy,” he said. “It would have been a game-changer.”

Broader Legislation

The compromise may become part of broader legislation renewing the fee system drugmakers use to fund FDA product reviews, which expires at the end of September, Greenwood said. Timing is sensitive because talks are occurring during an election year, when Congress typically leaves Washington by the end of July.

Karen Riley, a spokeswoman for the FDA, said the agency has several processes to help speed approval of drugs and will work with Congress going forward.

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net.

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net.

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