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Insight & Intelligence™ : May 2, 2012

Even If Bills to Hasten Drug Approvals Pass, Investments May Remain Dry Longer than Stakeholders Claim

Accelerated approval of any form will likely not sufficiently irrigate the valley of death.
  • Alex Philippidis

Congress appears poised this year to deliver on years of lobbying by industry to speed up reviews of new drugs and cut regulatory red tape. That helping hand alone, however, isn’t likely enough to draw investors, still shell-shocked by the recession, back into funding new biopharma startups and early-stage companies.

Several bills promising fast relief for biopharma are pending in Congress. Chief among them is the fifth authorization of the Prescription Drug User Fee Act (PDUFA V). Faster action on drug applications is the goal of the Faster Access to Specialized Treatments (FAST) Act introduced in the House of Representatives; the Transforming the Regulatory Environment to Accelerate Access to Treatments (TREAT) Act introduced in the Senate; and another Senate bill, the Advancing Breakthrough Therapies for Patients Act of 2012.

Among the claims made in support of the measures is that they will help draw venture capitalists and other traditional investors back to biopharma companies, thawing the long-chilly investment climate knocked cold by the Great Recession and weak recovery of the past five years. Maybe so, but it won’t likely be as quickly as startups are hoping for.

Bills Pending in Congress

First the good news. Several bills before Congress hold the promise of faster arrival-to-market of new medicines. Most important of these and also most likely to be approved is PDUFA V. It requires more communication between FDA and companies and is intended to smoothen the path to approval.

Senate changes to PDUFA included the Generating Antibiotic Incentives Now (GAIN) Act, which extends the exclusivity period for new antimicrobial drugs by five years. Supporters say this provision should stimulate development of more such treatments.

On April 25, the Senate’s full Health Education Labor and Pensions Committee voted to approve PDUFA V reauthorization by voice vote with only Sen. Bernie Sanders (I-VT) opposed. The House Energy and Commerce Committee’s health subcommittee will mark up PDUFA on May 8.

The TREAT Act (S.2113), introduced by Sen. Kay R. Hagan (D-NC), directs FDA to accelerate reviews and approval processes for treatments for diseases that have unmet medical need, that “significantly” advance the standard of care, or that are “highly targeted therapies for distinct subpopulations.”

The FAST Act (HR 4132), introduced by Reps. Cliff Stearns (R-FL) and Edolphus Towns (D-NY), allows FDA to expedite reviews of a fast-track product, defined as drugs that are “intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition,” as well as drugs demonstrating “the potential to address unmet medical needs for such a disease or condition.”

Most recently, the Advancing Breakthrough Therapies for Patients Act of 2012 (S.2236) was introduced by Sens. Michael Bennet (D-CO), Orrin Hatch (R-UT), and Richard Burr (R-NC). The measure would allow FDA to speed up review and development of a “breakthrough therapy” intended for “a serious or life-threatening disease or condition,” where preliminary clinical evidence indicates that the drug “may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.”

Impact on Investment

“The individual bills will have an impact, but I tell you, it’s going to be slow,” Robert More, general partner with Frazier Healthcare, told GEN. “What industry is really looking for is a clarity of understanding; let’s set the hurdles, but let’s not move the goalposts all the time.”

Richard (Erik) M. Gordon, clinical assistant professor at the University of Michigan’s Stephen M. Ross School of Business, doesn’t think the bills will irrigate the long-discussed “valley of death” since the legislation will affect later phases of development.

“TREAT and FAST come into play later on, somewhere in Phase IIb and Phase III, where you’re really doing your pivotal trials to nail down the evidence that you need to make the demonstration of safety and efficacy. What these acts would do is allow you to do that more quickly and at less expense under particular circumstances,” Gordon pointed out.

“We’re not jumping up and down and saying, ‘This will get us through the valley of death.’ However, if it compresses the time and money that our portfolio companies are spending in Phases IIb and III, we’re always in favor of that,” added Gordon, who is also managing director of the Wolverine Venture Fund. “For some companies, it will require less overall investment.”

As Gordon rightly acknowledges, startups that cannot get through the valley of death can’t progress to the costlier Phases IIb or III. That leap in costs is much steeper for biologics than small molecules.

The current TREAT Act differs from a draft made public last year. That version would have allowed the review of new drugs under two new FDA approval pathways—progressive or exceptional—if they provided meaningful advances in the treatment of serious or life-threatening conditions or if they addressed an unmet medical need. Drugs undergoing these accelerated reviews would be cleared based on efficacy results from biomarker tests, early-stage clinical trial results, as well as interim data.

Biotechs endorsed the original TREAT but pharma giants were mostly opposed. “The original idea that we proposed at BIO was to recommend a new track for drug approval that would speed approvals while not compromising safety,” Ron Cohen, CEO of Acorda Therapeutics told GEN.

“However, several of the PhRMA companies disagreed with this approach, fearing that a new pathway nevertheless might be interpreted as reducing safety standards. We at BIO did not believe that this was at all the case, but as the perception was there, we ultimately felt it would be more effective to expand the use of the existing ‘accelerated approval’ pathway that has been used for years at FDA to approve many HIV and oncology drugs.”

Which pathway is used matters less than the fact that the aim of all the bills is the creation of an accelerated pathway along the lines of the successful fast-track approach that has helped bring orphan drugs to market in recent years. Yet a faster track to drug approvals cannot instantly circumvent market forces that have been created over decades. In the end, drug developers will have to develop treatments that can withstand the heightened risk-benefit analysis of recent years and, finally, market the products effectively.