Pharmaceutical News: Novartis Institute Tackles Unprofitable Drugs

FDA issues warning letter to makers of ‘Viagra coffee’

Magic Power Coffee has come under government scrutiny for claiming its product, which is only sold online, is a “100% natural” dietary supplement that can enhance sexual performance.

However, a Food and Drug Administration laboratory test found that at least one batch of the coffee product also contained hydroxythiohomosildenafil, a compound similar to the drug sildenafil, the active ingredient in Pfizer’s Viagra.

This undisclosed inclusion of a pharmaceutical component prompted the FDA to warn consumers last June to avoid the product and to report any adverse health effects to the agency.

Despite the manufacturer’s mass voluntary recall of all Magic Power Coffee made before May 8, 2010, the FDA then sent the company a letter Aug. 23 warning that the marketing and distribution methods for Magic Power Coffee violate the federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301.

Why did the FDA issue a warning letter?

Since 2004, the FDA has monitored the online marketing of so-called dietary supplements that claim to treat erectile dysfunction and enhance sexual performance. The agency has found that some of these unapproved products, despite being presented as all-natural alternatives to prescription drugs like Viagra, Levitra and Cialis, actually contain undisclosed amounts of the same pharmaceutical ingredients in those FDA-approved drugs.

FDA approval is required for these types of drugs because they pose serious health risks to certain classes of consumers. Specifically, these drugs (known as PDE 5 inhibitors) may interact with nitrates, commonly taken by consumers with diabetes, high blood pressure, high cholesterol or heart disease, to cause blood pressure to drop to unsafe levels.

The FDA’s concern is that consumers who are unable to obtain prescriptions for Viagra, Levitra or Cialis may be using alternative products such as Magic Power Coffee, unaware of the serious risks and consequences that they pose.

According to the FDA’s warning letter, the inclusion of hydroxythiohomosildenafil in Magic Power Coffee meant that the product could not be properly marketed either as a dietary supplement or as a conventional food, as its labeling suggested.

The drug’s presence, along with claims such as “Serving Passion One Cup at a Time” and “For best results, use approximately 30-45 minutes prior to engaging in sexual intercourse,” led the FDA to find that Magic Power Coffee qualified as a “drug” under the Food, Drug and Cosmetic Act as the product was intended to affect the structure or function of the body.

More specifically, the agency found that the product constituted a “new drug” under the FDCA because it was “not generally recognized as safe and effective for use under the conditions proscribed, recommended or suggested in the labeling thereof.” The introduction and delivery of a new drug into interstate commerce without an FDA-approved application violates FDCA Sections 301(d) and 505(a).

The warning letter further states that Magic Power Coffee was misbranded under the FDCA in three respects.

• The product was misbranded under Section 502(f)(1) because it failed to bear adequate directions for its intended use. Magic Power Coffee is a prescription drug because, like all other PDE 5 inhibitors the FDA has approved, its potentially harmful effects render it unsafe for use except under the supervision of a licensed practitioner. Because prescription drugs can only be used safely under the supervision of a licensed practitioner, it is impossible to write adequate directions for consumer use only.

• The undisclosed presence of hydroxythiohomosildenafil caused Magic Power Coffee to be misbranded under Sections 502(a) and 502(f)(2). A drug is misbranded under Section 502(a) if “its labeling is false or misleading in any particular” and under Section 502(f)(2) if its labeling lacks adequate warnings for the protection of users based on the risks associated with the consumption of the product. As noted, the product’s labeling did not warn consumers of the presence of hydroxythiohomosildenafil or of its potentially dangerous side effects.

• The introduction and delivery of the misbranded Magic Power Coffee into interstate commerce violated Section 301(a).

What is an FDA warning letter?

Initially, it is important to note that ongoing or promised corrective action, such as the manufacturer’s voluntary recall of Magic Power Coffee, will not necessarily preclude the issuance of a warning letter.

An FDA warning letter is an informal and advisory correspondence that notifies companies and individuals that their products, practices, processes or other activities violate the Food, Drug and Cosmetic Act. The FDA regulatory procedures manual describes the warning letter as the “agency’s principal means of achieving prompt voluntary compliance” with the FDCA.

Despite having no obligation to issue warning letters to violators of the law, the FDA does so with the expectation that these companies and individuals will promptly and voluntarily come into compliance once notified.

Warning letters are issued only for violations of regulatory significance, i.e., those violations that may ultimately lead to enforcement action if not promptly and adequately corrected. In this sense, they serve to ensure that the seriousness and scope of the observed violations are understood by top management so that the appropriate response can be made by the affected industry in order to correct violations and to prevent recurrence.

Are warning letters legally binding?

Despite the serious nature of the warning letter, they are not binding upon either the affected industry or the FDA. They serve the purpose of communicating the FDA’s position on a very specific matter, but they do not commit the agency to take any further enforcement action against the industry. As such, the FDA does not consider the warning letter to constitute final action upon which the agency can be sued.

Warning letters do, however, serve the additional purpose of being the FDA’s primary means of establishing prior notice. It is the agency’s policy to afford individuals and firms an opportunity to take voluntary corrective action prior to the initiation of an enforcement action.

However, if that voluntary action is not achieved to the FDA’s satisfaction, documentation of prior notice strengthens the agency’s position in future enforcement actions by establishing that responsible individuals continued violating the law despite having been previously warned.

What if you get a warning letter?

Generally, warning letters give the party in violation 15 days to respond, in writing, to inform the office issuing the letter of the specific steps that have been taken to correct the stated violations and to ensure that similar violations will not recur. As discussed, FDA warning letters are nonbinding, and compliance is purely voluntary. Further, the issuance thereof does not necessarily indicate that an enforcement action will follow.

However, the warning letter will serve as prior notice to the violator, which strengthens the agency’s position in any future enforcement action. Therefore, upon receipt of an FDA warning letter, the targeted individual or company should promptly respond within the allotted 15-day period.

The individual or company should first consult inside counsel and/or attorneys familiar with FDA compliance issues in order to establish a working plan to make an appropriate response.

The individual or company should contact the FDA if any aspect of the letter is unclear. It may also be appropriate in some circumstances to schedule a meeting with the agency.

A typical response should first acknowledge the company’s and or individual’s obligation to implement whatever measures are necessary to ensure that the products are in compliance with the law.

The response should then state what corrective action is being taken on the company’s behalf and what corrective action, if any, has already been taken. It should be as specific as possible in communicating to the FDA a relative timetable of when future corrective action will take place.

A thorough response letter should also refer to any changes that are being made in company practice/policy to keep abreast of changes in the law and to ensure future compliance with the FDCA.

A response letter could articulate any reasons that the company has for disagreeing with the FDA’s position on a particular matter, but again, the FDA uses the warning letter as a means of facilitating prompt and voluntary compliance with the FDCA and as its chief means of providing prior notice.

Failure to take corrective action despite being notified could subject affected individuals and companies to harsh FDA enforcement action, where the agency’s position would be strengthened by virtue of the prior notice that was established through the issuance of the warning letter.

Novartis Institute Tackles Unprofitable Drugs

Pharmaceutical companies get a bad rap for focusing their R&D efforts on diseases and ailments that impact people in wealthy countries. American men can choose between two hair loss drugs, and four for erectile dysfunction. Yet throughout the developing world, millions of people die from so-called “neglected diseases”—like malaria, leishmaniasis, lymphatic filariasis and Chagas disease—that kill them in horrifying ways.

Drug development is costly and unreliable. Only one in seven drugs make it to market, and drugs for neglected diseases can’t be sold at a price that would offset the cost of developing them—not to mention the six other drugs that fail.

The more I report on global public health, the more I see the need for creative approaches to drug development and distribution. I’ve reported on product development partnerships (PDPs)—such as DNDi and the Institute for OneWorld Health—which share the cost of drug development with pharmaceutical companies. And last week I spoke with Paul Herrling, the head of corporate research at Novartis, and chair of the drugmaker’s Institute for Tropical Diseases— a $200 million, ten year-old initiative that develops new drugs to treat dengue fever, tuberculosis and malaria. After discussing neglected diseases with NGOs and PDPs, I was curious to hear from the pharmaceutical sector.

Here’s my interview with Herrling, condensed and edited.

Why did Novartis decide to create the Institute for Tropical Diseases, and how does it work?

Ninety percent of drug development is generated by commercial pharmaceutical companies. I said “Why don’t we allocate a portion of our drug discovery budget to a number of diseases where we think we can make a big difference?” We did not pick HIV because there was already so much money being devoted to it. We selected tuberculosis and dengue fever.

Later, the Wellcome Trust [a health-focused foundation] came to us and said that they would like to partner to make a new anti-malarial drug. We had already been manufacturing the anti-malarial Coartem, and didn’t want to dilute our efforts with malaria and TB. They said that they are seeing resistance to artemisinin, the major compound in Coartem, and offered to finance our malaria efforts so that we wouldn’t have to dilute the resources that we devoted to dengue and TB. We hired some scientists and started a malaria project. It resulted in a compound that is now in clinical testing.

Our group includes 100 scientists and 30 students, and I have access to the resources of 6,000 Novartis scientists. We’ve since created a second institute for developing vaccines.

What do you say to people that $200 million is still a small percentage of Novartis’ $7.5 billion overall R&D budget?

We are a commercial organization and we are responsible to shareholders. We also believe that one of our missions is contributing new medicines to society, which is horrendously expensive. There is a limit to what we can do if we want to maintain profitability as a company. It cannot be a commercial organization’s responsibility to solve access to medicine problems where there is no market. We are trying to partner with PDPs [product development partnerships] and NGOs to work together to try to solve this problem. We would go out of business if we tried to address this problem on our own.

Tell me how your partnerships work. Who does what?

We have contracts with TB Alliance, MMV (Medicines for Malaria Venture) and DnDi (Drugs for Neglected Diseases Initiative). We have libraries where all of the compounds are in the public domain. They are available to all of our external partners, including universities and PDPs. In the public library we don’t own the IP.

We would give our partners an exclusive license for an indication that comes out of our work together. Once the utility has been shown, they can develop it with whomever they want— in India and elsewhere. Then they distribute it at the conditions they decide. They are the owners and can do whatever they want in that indication. We keep the rights for other indications.

For those compounds that are not in the public domain, we screen them ourselves. We select out the compounds that seem to be of interest. We publish and make those compounds available for the particular indication—like malaria, TB and dengue. If a lot of chemistry work has to be done later and what we put in development is not the original compound, then we take the IP in case the same molecule can be used in a commercial environment. For example, some compounds for dengue might also work for Hepatitis C, which is a blockbuster. We could give that IP to Novartis’ pharmaceutical department, which is a commercial organization.

We have committed to do all of the science and drug discovery and work to get to proof of concept, which is around Phase 2A. For dengue and TB, we will pay for FDA trials. For malaria, the Welcome Trust and MMV will pay.

In a perfect world, would the health ministries of endemic countries buy these drugs in bulk, thereby creating a real profit motive for drug companies?

If you define “demand” by medical need, then we’ve decided on the drugs with the biggest medical need. Coartem—a malaria drug— is one of Novartis’ biggest drugs in terms of the amount of the drug delivered. The problem is that in Africa, the drugs would never reach the patients if they were not delivered at the cost of goods so that patients would get it completely free. In some cases, medicines get hijacked somewhere along the distribution chain and get sold. Currently, because of the volume, we’ve been able to offer an adult dose of Coartem for 80 cents, and a pediatric dose at 50 cents, which is something that the system can absorb. We get no profit out of it.

There is no market where the market price of drugs would in any way compensate for the cost of developing them. For every one drug that makes it to market, seven or eight other drugs will fail, and they cost the same to manufacture. When you’re working in a rich country, your shareholders will bear this risk because if you have one drug that makes it, you recover the risk through sales.

Depending on how you calculate it, the direct cost of developing a drug equals everything that you actually spend on the drug that makes it, plus all of the costs of the drugs that failed. When you do that for each drug, you come up with a number of $1 billion per drug or more. It’s that order of magnitude. That is why pharmaceutical companies try to develop blockbuster drugs to offset the failures.

The FDA runs a Priority Review Voucher program, where a company that develops a drug for a neglected disease receives a voucher that it can use at another time, and which will allow it to expedite the testing process. You received a Priority Review Voucher for Coartem. What’s good about the vocuher program? What needs improvement?

We got the first and only Priority Review Voucher so far, for Coartem. The good part is that it’s a step in the right direction. The FDA offers an advantage to those people who actually take the risk to invest in an indication and are successful. That might be, to some extent, an incentive. It doesn’t guarantee that your review will be positive—just that the process will be faster.

The key downside is that it doesn’t take away the disincentive that any entity that works in this field is stuck with the risk of failure. If you fail to get your drug approved, you can’t apply for the voucher. The high rate of failure is a major disincentive for companies to invest in a drug where there is no normal commercial market: Only one out of seven drugs will make it.

Where we are now?

PDPs are a brilliant concept because involve collaboration with charities, NGOs, donors like the Wellcome Trust and the Gates Foundation, and the pharmaceutical industry. Over the last eight to ten years, PDPs have generated a portfolio of more than a 100 potential drugs, which is outstanding.

But today the PDPs are seeing a major problem looming on the horizon. Their funding allowed them to generate this pipeline, but it won’t sustain later stage trials. Neither the Gates Foundation nor the Wellcome Trust can allocate sufficient resources for the full development of these drugs. In some ways, PDPs are a victim of their own success.

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