New Leadership, New Policies at FDA

McClellan shifts to head Medicare after delivering new proposals to block counterfeits, add bar codes, and assess drug imports.

After weeks of insider speculation, the White House announced in February that commissioner Mark McClellan would be leaving the Food and Drug Administration to become administrator of the Centers for Medicare and Medicaid Services (CMS) in the Department of Health and Human Services (HHS). A top priority for the Bush administration clearly is to begin implementing the Medicare prescription drug benefit to quell complaints from seniors before the November elections. As a physician and economist, McClellan knows a lot about drug pricing and reimbursement and their impact on biomedical innovation. He is also skilled in navigating the political minefields of Washington, which will be important in building public understanding and confidence in this very complex and untested Medicare policy.

As FDA commissioner, McClellan has demonstrated a broad interest in drug coverage and access, as well as issues affecting research and development of new therapies. Before coming to FDA in fall 2002, he was White House health policy advisor as a member of the Council of Economic Advisors; in recent months he advised administration officials on various issues in the Medicare legislation related to pharmaceutical coverage and quality of care.

Establishing a Medicare drug coverage program will require CMS to issue dozens of new rules and policies. The upcoming legislation also promises to make significant changes in health care delivery and innovation, as seen in provisions to promote electronic prescribing, develop more evidence on product safety and effectiveness, and provide more useful information to patients and health professionals.

FDA in good hands
In shifting McClellan to CMS, the administration also calculated that FDA could weather the change. Deputy commissioner Lester Crawford, who already served as acting commissioner during the first two years of the Bush administration, will resume that position.

During his first stint at the agencys helm, Crawford launched programs to modernize good manufacturing practices and to consolidate regulation of biotech therapies with drugs. In recent months under McClellan, Crawford has been heading up FDA programs to enhance food safety, curb obesity, prevent the spread of BSE (bovine spongiform encephalopathy) and promote antibioterrorism initiativesprime HHS concerns.

McClellan made the smart move last fall of detailing Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER), to the Office of the Commissioner (OC) to help implement many of his risk management and strategic plan initiatives. Now Crawford has asked Woodcock to remain as one of three acting deputies instead of returning to CDER in April as planned. Woodcock will be deputy for operations; Murray Lumpkin deputy for special programs; and Amit Sachdev deputy for policy. Scott Gottlieb will coordinate OC initiatives with CDER and the centers for biologics and medical devices as director of medical policy development.

Woodcock says she can extend her stay in the Office of the Commissioner because CDER is in good hands under acting director Steven Galson. Main priorities for Galson are to continue integrating biologics staffers into CDER and prepare for the move to new offices at White Oak next year. Another challenge, Woodcock notes, is dealing with a constant bombardment of lawsuits related to generic drugs.

In the Office of the Commissioner, Woodcock plans to remain in charge of initiatives to update good manufacturing practices and to develop guidance on protein characterization, among many others. One specific priority is to develop an agency proposal for dealing with genericor follow-onbiologics, which is expected this spring.

Although FDA will continue to function well, McClellans departure leaves a big hole at the agency. As one of the more activist and outspoken commissioners, he advocated for policies to spur medical innovation, including more equitable global pricing of drugs as one way to reduce U.S. prices. He also has been particularly enthusiastic about FDA collaborative efforts with the National Cancer Institute and other organizations to streamline clinical research and spur development of new critical therapies.

Taking action
The main criticism of McClellan has been his tendency to propose dozens of initiatives without the resources to follow up and implement them. McClellan leaves FDA with a mountain of unfinished business, but also with a strong list of accomplishments for someone at the agency less than 18 months:

• More useful DTC advertising. FDA issued draft guidances in February that offer new approaches to communicating drug risks to consumers. One proposal encourages pharmaceutical companies to replace the tiny-print brief summaries in print advertisements with more comprehensible and useful information formats. A companion guidance encourages marketers to support more educational advertising using FDAs help seeking format.

• Action against dietary supplements. FDA developed sufficient evidence in the past two years to pull ephedra off the market. The move may face legal challenges, but it represents a ramp-up in enforcement of policies to limit claims by supplements experiencing serious safety problems.

• Campaign to block counterfeit drugs. Working on a tight time frame, an FDA task force issued a final report on Combating Counterfeit Drugs in February. The centerpiece of the plan calls for manufacturers to insert tiny radio frequency identifier (RFID) chips in drug labels and packages in order to track a product as it moves through the drug distribution system.

• Support for bar codes. FDA also published a final rule requiring manufacturers to print linear bar codes within two years on packaging for most drugs, vaccines, blood products and some over-the-counter drugs used in hospitals. The bar codes do not have to carry lot numbers or expiration dates, and the rule doesnt mandate unit-of-use packaging; however, demand from hospitals and other purchasers is prompting manufacturers to move in that direction.

• Monitoring of financial claims. FDA recently announced plans to work more closely with the Securities and Exchange Commission (SEC) to better identify false or misleading company financial announcements related to FDA review decisions. FDA and SEC officials have streamlined processes for requesting and exchanging confidential information from companies developing and seeking approval of new drugs and medical products. A new centralized system under Office of Regulatory Affairs chief John Taylor aims to eliminate redundant paperwork and clarify responsibilities of FDA staffers. FDA says it will protect confidential information from regulated firms, but companies that issue misleading statements could face public release of proprietary data if the feds take them to court.

Chips, not paper
FDAs plan to combat drug counterfeiting envisions an RFID-based tracking system that would create a de facto electronic drug pedigree in three or four years. This technology would eliminate the need for a tracking system based on paper records, as required by the Prescription Drug Marketing Act (PDMA) of 1987. This was scheduled to become effective April 1 of this year, but FDA instead is encouraging industry to establish an electronic tracking system.

The anticounterfeiting initiative also calls for stiffer criminal penalties for parties that produce bogus products, stronger regulation of drug wholesalers by states, and increased involvement of health professionals and consumers in identifying and reporting suspect prod-ucts. FDA also asks manufacturers and other parties to do more to ensure the security of their operations and sites to prevent theft and diversion of products likely to facilitate illegal production activities.

One question is whether it makes sense to require bar codes now when e-chips used to prevent counterfeiting may make the linear codes obsolete over the next decade. However, HHS secretary Tommy Thompson wanted to implement the bar code system now as one way to spur formation of a national electronic health information system. Ultimately, an e-health network would track drugs through the distribution system, identify outliers and counterfeit products, facilitate recalls, detect prescribing errors, and ensure the safe and appropriate use of prescription drugs.

Battle over imports
New electronic technologies that can distinguish between genuine, approved medical products and those that are adulterated, unapproved or illegal also might address some of the safety concerns held by manufacturers and regulators about the current drug import surge. While not all illegal imports are counterfeits, FDA believes that Internet purchasing opens the door for bogus products to enter the U.S. market.

The increase in shipments of unauthorized drugs to U.S. customers has prompted an FDA crackdown. Data from IMS Health shows that sales of prescription drugs reimported from Canada to the U.S. topped $1 billion in 2003 vs. $500 million the previous year. An FDA sting operation in January netted evidence of counterfeit and mis-branded products being mailed to Amer-icans and led to actions against Texas importers. The tension heated up in February when several state and local governments launched new efforts to help citizens obtain drugs from Canada.

FDA objected strongly that these state initiatives could threaten patient safety by opening the door to more misbranded and counterfeit therapies. FDAs oppo-sition to broader drug importing has prompted some members of Congress to propose legislation that would legalize lower cost imports of prescription drugs. In addition, several senators threatened to block McClellans appointment to CMS until he explained his anti-import stance.

While Congress debates drug import proposals, FDA analysts are examining what resources the federal government would need to make drug re-importing safe, as required by the new Medicare reform legislation. HHS secretary Thompson recently established a special Task Force on Drug Importation to examine more publicly what kind of policies and initiatives are needed to import drugs safely and how such activity would affect medical costs and development of new therapies. Surgeon General Richard H. Carmona will be chairman, replacing first pick McClellan, who drew criticism from Congress. The task force includes representatives from CMS and other federal agencies such as the Bureau of Customers and Drug Enforcement Administration.

The task force plans to meet with consumer groups, health care professionals, purchasers, state officials, and manu-facturers to estimate what agency resources would be needed to adequately inspect pharmaceuticals entering the country. The agenda also calls for assessing whether anticounter-feiting technologies could assure product safety and analyzing how increased drug importing would affect development of new medical products.