Pharmaceutical News: The Year In Review

In 2012, FDA related topics made headlines regarding compounded drugs, graphic tobacco labels, arsenic in rice, generic drug user fees and drug approvals. Looking forward to 2013, the Supreme Court’s anticipated ruling on pay-for-delay drug settlements looks to ensure the food and drug industry will continue to be busy.

Compounded Drugs

The Centers for Disease Control and Prevention (CDC) collaborated with state and local health departments and the FDA to investigate a multistate outbreak of fungal meningitis. Patients who were affected received contaminated preservative-free methylprednisolone acetate steroid injections used to treat back and joint pain from New England Compounding Center (NECC). Unlike drug manufacturers, which are regulated by the FDA, compounding pharmacies are overseen by state boards of pharmacy. All medications produced by NECC were recalled in early October. Over 424 cases of fungal meningitis and joint infections have been reported to date, with at least 31 deaths.

Graphic Tobacco Labels

The U.S. Court of Appeals for the District of Columbia Circuit ruled in August that tobacco companies do not need to print graphic warnings of the dangers of smoking on cigarette packages. In a 2-1 decision, the D.C. Circuit struck down an FDA regulation that requires tobacco companies to display graphic images such as a diseased mouth. The court held that the FDA’s rule on graphic cigarette label warnings exceeded the agency’s statutory authority and undermined tobacco companies’ economic autonomy. Subsequently, in December, the D.C. Circuit rejected a request for a hearing en banc. The question remains whether the federal government will ask for the matter to be heard before the Supreme Court.

Arsenic in Rice

The nation’s food safety supply was once again a matter of concern, as the levels of arsenic in rice were studied. Consumer Reports found measurable amounts of total arsenic in its two forms in almost every rice product it tested. Additionally, a significant level of inorganic arsenic, which is a carcinogen, was present in almost every rice product category. Using a proposed, but not promulgated, EPA five parts per billion standard, the study found that a single serving of some rice could give an average adult almost one and a half times the inorganic arsenic present in a whole day’s consumption of water, about 1 liter. Though many experts have been urging the FDA to set limits for arsenic in food and food agencies in other countries have already set safety standards for rice, the FDA has not urged consumers to change their eating habits.

Generic Drug User Fees

In July, the Generic Drug User Fee Amendments of 2012 (GDUFA) were signed into law. The user fees will be used to speed access to generic drugs for the public and reduce costs to industry. The law requires the drug industry to pay user fees to supplement the costs of reviewing generic drug applications and inspecting facilities. Additional resources will enable the FDA to reduce a current backlog of pending applications, cut the average time required to review generic drug applications for safety, and increase risk-based inspections.    

Drug Approvals

For the first time in 13 years, the FDA approved a new drug to help people lose weight. The FDA gave the green light to Arena Pharmaceuticals to sell Belviq, or lorcaserin generically, a twice-a-day pill that suppresses appetite and appears to affect metabolism by influencing levels of the brain chemical serotonin. This approval was 1 of 35 expedited new drug approvals during fiscal year 2012. The expedited reviews have generally been for new drugs that address needs of patients with cancer and other deadly diseases.

Pay-for-Delay Settlements

In 2013, the Supreme Court will hear oral arguments on the legality of drug companies paying their generic-making counterparts to keep generic drugs – in this case, a testosterone gel – off the market. The justices agreed to hear the case of Federal Trade Commission v. Watson Pharmaceuticals, as well as two other cases, to resolve conflicting rulings in lower courts. Both the pharmaceutical industry and the FTC requested a Supreme Court review to resolve a long-running battle that antitrust regulators have labeled as pay-for-delay settlements.

Watson, along with another generic drug maker, won approval from the FDA for a generic version of the testosterone gel in 2003, triggering a patent infringement lawsuit. In 2006, the generic companies agreed to hold off on marketing their products until August 2015 in exchange for tens of millions of dollars in annual payments from the brand-name drug maker. The FTC challenged the settlement as anti-competitive.

In April of 2012, the U.S. Court of Appeals for the 11th Circuit ruled against the FTC, holding that as long as the patent settlement did not extend exclusive rights beyond the patent expiration date, it was immune to antitrust violations. In contrast, the Third Circuit struck down payments made to delay generic versions of a potassium supplement. The FTC asked the Supreme Court to settle the issue, and 31 states filed a brief in support of the suit. Both the generic and brand-name drug companies involved asked the high court to weigh in as well.

The Supreme Court’s eventual decision can be considered the health care reform case of 2013, as it will have a pronounced impact on reducing health care costs. The FTC has estimated that the deals between brand-name drug makers and generics cost consumers as much as $3.5 billion annually. The CBO has estimated that the government would save more than $2.5 billion over 10 years in federal health care spending alone.