Washington Editor

WASHINGTON - The FDA is considering expanding the compassionate use of experimental drugs, a regulatory change that would make such products more widely and easily available to seriously ill patients with no other treatment options. At the same time, the agency is looking to define how much a manufacturer can charge for an experimental drug.

"After almost 20 years of experience with these regulations," Janet Woodcock, FDA's deputy commissioner for operations, said on a conference call, "we find that we need to clarify the provisions."

Existing access to investigational therapies dates back a couple of decades, and while such programs have allowed patients with HIV/AIDS, cancer and cardiovascular diseases to receive promising therapies before approval, there have been limitations. Under the proposed rule, individual patients would have expanded access for experimental drugs in non-emergency and emergency settings, as would small patient groups.

Also, larger groups of patients would receive experimental drugs more easily under new drug regulations that govern use after Phase III trials but before approvals, "a bridge to access over that time," Woodcock said. Beyond the stipulations that no other drug is available and the disease is serious, the expanded use of the product also must not interfere with its development path. The change would make products more widely available in appropriate situations by establishing criteria that link the level of evidence needed to support the use of an experimental drug to the seriousness of the disease and the number of patients likely to be treated.

As part of its proposal, the FDA said it would revise current regulations on manufacturers' recovery of the costs of an experimental drug. Such changes would clarify that any charges are permissible in a clinical trial only to facilitate development of drugs that promise significant advantages over existing therapies but might not otherwise be developed because of their high cost, and specify that charging is intended to facilitate and encourage access to drugs that might not be made available unless a manufacturer is able to recover costs.

While most companies don't charge for access under current regulations, Woodcock said, those clarifications are aimed at removing a barrier to small companies and research institutes that might not be able to afford to give away their investigational products.

The proposal also would simplify the cost-recovery calculation by making clear that charges for an experimental drug used in a clinical trial may include only direct costs associated with the drug's development, and also include administrative costs of making the drug available for intermediate patient populations and under large-scale treatment INDs.

The proposed rules are open to comment for 90 days.

Congress Clears Bills In Last Minute

Just before recessing, Congress took care of a couple of bills of industry-wide importance.

The Tax Relief and Health Care Act was approved, extending long-standing research and development tax credits through the end of next year and also making it retroactive for research expenses incurred beginning in January of this year. Were the law not retroactively extended, companies would have been required to state their annual year-end earnings reflecting the full impact of a higher tax rate, which would have adversely impacted annual earnings-per-share.

Labeled H.R. 6111, it also included an incentive for building plants to produce cellulosic ethanol. Specifically, the legislation includes a provision to allow accelerated depreciation for biorefineries that begin production of cellulosic biomass ethanol within the next six years, reducing risks associated with building these facilities.

Other cleared legislation relates to the biodefense space - the Pandemic and All-Hazards Preparedness Act - which establishes the Biomedical Advanced Research and Development Authority (BARDA) as a single source of federal authority to better prod advanced research on antidotes and vaccines against biological weapons and infectious diseases. The bill, S. 3678, sets BARDA's initial annual funding at a little more than $1 billion over the next two years, about three times more than the House's BARDA bill, to fund that period in which the industry has struggled to make progress because of a lack of private funding.

The new agency won't be up and running right away, though, as appropriations must first be set aside. Of note, Congress left town without finishing appropriations bills for the current fiscal year, which began Oct. 1. Instead, a continuing resolution is maintaining funds at fiscal 2006 levels into February, and legislators recently indicated that they will maintain status quo for the remainder of this fiscal year. That means that the appropriators are turning their attention to fiscal 2008.

The BARDA measure also includes provisions to permit competing companies to cooperatively respond to government-declared emergencies without violating antitrust laws. The House passed its bill, H.R. 5533, almost three months ago, and the Senate cleared its broader bioterror funding reauthorization just this month.

SOX Changes On Way

A new proposal issued last week by the SEC suggests auditing standards under the Sarbanes-Oxley Act should be eased for small, publicly traded companies. Such businesses, many of them from the biotech industry, have been voicing their desire for scaled reforms to Section 404 of the law, internal controls over financial reporting, to provide relief from those costly requirements. With the guidance, management will be able to scale and tailor evaluation procedures to fit a particular company's facts and circumstances, reducing compliance costs without compromising the law's intentions related to transparency. The proposal remains open for public comment. In parallel with the improvement, the Public Company Accounting Oversight Board is scheduled to propose a new auditing standard for accounting firms next week.

Senior FDA Official Departing

The FDA's Scott Gottlieb, a voice on policy as its deputy commissioner for medical and scientific affairs over the past year and a half, is leaving the agency next month. He will return to a Washington think tank, the American Enterprise Institute, where he previously was a resident fellow. During Gottlieb's FDA tenure, he worked on policy initiatives to improve the advisory committee process and the agency's risk communication efforts, as well as other matters, such as the new expanded access rules. He's also been an industry ally with frequent comments on the dangers inherent in slowing the drug approval process in reaction to safety concerns.

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