Uncertainty continues at FDA while the agency addresses drug safety; Medicare drug benefit rolls out

The future leadership of FDA remains highly uncertain following the unexpected resignation of commissioner Lester M. Crawford, DVM, PhD, in September. Andrew C. von Eschenbach, MD, director of the National Cancer Institute (NCI) at the National Institutes of Health (NIH), was named acting FDA commissioner, but conflict arose initially because Dr von Eschenbach wanted to retain a leadership role at NCI while also taking the helm of FDA. Although he handed over day-to-day leadership of NCI to a deputy, that move failed to fully appease critics concerned about conflicts of interest in advocating for speedy access to new cancer treatments while overseeing the safety and effectiveness of those therapies. Department of Health & Human Services (HHS) secretary Michael Leavitt has indicated that Dr von Eschenbach is not likely to get the top job at FDA on a permanent basis.

The future leadership of FDA remains highly uncertain following the unexpected resignation of commissioner Lester M. Crawford, DVM, PhD, in September. Andrew C. von Eschenbach, MD, director of the National Cancer Institute (NCI) at the National Institutes of Health (NIH), was named acting FDA commissioner, but conflict arose initially because Dr von Eschenbach wanted to retain a leadership role at NCI while also taking the helm of FDA. Although he handed over day-to-day leadership of NCI to a deputy, that move failed to fully appease critics concerned about conflicts of interest in advocating for speedy access to new cancer treatments while overseeing the safety and effectiveness of those therapies. Department of Health & Human Services (HHS) secretary Michael Leavitt has indicated that Dr von Eschenbach is not likely to get the top job at FDA on a permanent basis.

Meanwhile, the acting commissioner is busy dealing with pressing issues at FDA. The battle has accelerated over broader access to the "morning-after" pill, Plan B. Congress continues to push for changes to ensure the safety of prescription drugs, and implantable medical devices are raising new safety concerns.

At the same time, the uncertain atmosphere at FDA is making it difficult to move forward with important initiatives. A much-anticipated white paper on generic versions of costly biotech therapies, for example, has been delayed while agency lawyers further examine policy and legal issues. FDA also plays a central role in ensuring public access to vaccines and therapies to guard against a possible flu epidemic, responsibilities that require strong leadership and ample resources. All sides are watching to see if von Eschenbach approves non-prescription use of Plan B, but as a close ally of President George W. Bush, FDA's interim leader may not be willing to do so.

A top priority for FDA officials is to regain public confidence regarding the safety and efficacy of prescription drugs. The agency has scheduled a public meeting next month (December 7–8) to solicit public comment on its traditional ways of communicating about drug risk, such as issuing talk papers, health advisories, and press releases, and posting adverse event information from its MedWatch system. FDA's new Drug Safety Oversight Board has begun to assess safety concerns, while agency staff members evaluate comments on the proposal to make public emerging drug safety information on a new "Drug Watch" website.

One important effort is to expand FDA's ability to access data on prescription drug prescribing and utilization. The aim is to reduce reliance on individual reports from physicians and pharmacists that may signal emerging drug safety problems. FDA signed contracts in September to gain access to population-based databases established by 4 leading health plans: UnitedHealth Group's Ingenix subsidiary, Harvard Pilgrim Health Care, Kaiser Permanente of California, and Vanderbilt University. By providing information on 11 million covered patients, the contracts will help FDA conduct post-marketing surveillance, respond more quickly to new safety concerns, and conduct collaborative pharmacoepidemiological studies related to suspected adverse drug events.

The data from these collaborations will support broader FDA efforts to build a central electronic information system that can provide up-to-date information on medical product safety and appropriate use. Unofficially dubbed "Facts@FDA," the system ultimately will contain current product labeling information plus safety data gleaned from adverse event reports. More immediate access to current information on a drug's side effects and appropriate use aims to address many post-approval drug safety concerns and may affect how safety and efficacy information is collected in clinical trials.

MEDICARE PRESCRIPTION DRUG PLANS READY TO ROLL

To the surprise of many involved in the Medicare modernization efforts, hundreds of insurers and pharmacy benefit managers (PBMs) have applied to market national and regional prescription drug plans (PDPs) to seniors, as well as managed care plans with enhanced drug benefits. How well these plans succeed in enrolling beneficiaries and delivering benefits promises to have a major impact on the pharmaceutical market and healthcare system.

The Centers for Medicare & Medicaid Services (CMS) spent 6 months reviewing plan applications to ensure that they met requirements for pharmacy access, that formularies list all medically necessary drugs, and that tiering and utilization management strategies don't discriminate against patients with higher-cost drug regimens.

Most plan formularies are fairly robust, with many already in use by commercial plans and PBMs, according to Babette Edgar, PharmD, MBA, director of the CMS formulary review group.

The Medicare drug benefit is expected to give the government (federal, state, local) control of more than 40% of the prescription drug market, up from about 25% today. At the same time, growing pressure to cut federal spending in the wake of the Gulf hurricanes and the war in Iraq is intensifying efforts to reduce the cost of the multi-billion-dollar Medicare program. This means expanded comparison of drug effectiveness and safety, along with efforts to negotiate lower drug prices.

CONTROLLING COSTS

The plans are doing their part in offering drug coverage at unexpectedly low prices to gain market share while attracting healthy beneficiaries. Some plans have premiums under $5, and a number of managed care plans are promoting zero-premium options. Other plans feature low or no deductibles, flat co-pays, and higher-premium plans that would fill in the feared "donut hole." Ten companies are marketing drug plans on a national basis, which means "there will be no fall-back plans anywhere," according to CMS administrator Mark McClellan, MD, PhD. In other words, CMS will not have to provide back-up drug coverage for seniors unable to access a PDP, since numerous options exist nationwide.

The abundance of plans and options is generating much competition to sign up beneficiaries, along with predictions of a future shake-out as smaller and more costly plans may be dropping out of the Medicare market. The remaining plans would gain more market leverage, increasing pressure on drug manufacturers to negotiate lower prices and higher discounts.

Insurers and plans negotiated drug prices and discounts months ago, and the word is that manufacturers have offered rebates much higher than expected in hopes that their products will be placed in competitive classes on formularies, according to Marc Benoff of IMS Health's Cambridge Pharma Consultancy. Some of the negotiations also may have involved tier placement, inclusion in step therapies, and prior authorization and therapeutic interchange requirements, Benoff said.

The transparency of rebate and discount numbers is a big issue. Plans have to post co-pays and costs to beneficiaries, but CMS has promised to keep confidential actual rebate and discount figures. Tier placement and other plan features may reveal a good deal about plan negotiations; pressure is likely to rise for CMS to make more proprietary information public, even though CMS officials acknowledge that keeping price information proprietary makes discounting easier.

FORMULARIES TO EVOLVE

As plans look to achieve profitability and sustainability, Benoff expects formularies to become more controlled and to limit choices and options. Medicare permits plans to change categories and classes only at the beginning of the plan year and requires advance notification of drug additions, deletions, and tier changes. CMS also may be revising its model formulary and mandatory coverage requirements, an important process for insurers, PBMs, and pharmaceutical companies.

With all eyes on the costs and benefits of the Medicare drug benefit program, government agencies will be scrutinizing payment and rebate arrangements between pharmacy plans and manufacturers even more closely. Medicare marketing guidelines require plans to spell out what drugs are covered and how much beneficiaries have to pay for different types of medications. Any arrangements that smack of hidden incentives or special deals likely to induce product coverage will be fodder for federal and state investigators, who anticipate an increase in enforcement action arising from this highly complex program.

Ms Wechsler is a veteran reporter specializing in federal and state healthcare and pharmaceutical issues.