WASHINGTON _ An ongoing FDA investigation of GenentechInc.'s promotional activities includes scrutiny of materials developedfor all of its approved products: the clotbuster drug t-PA, the humangrowth hormone Protropin (and a variation of the same productcalled Nutropin), and the cystic fibrosis drug Pulmozyme.
Since last August, educational, promotional and marketing materialsused for all the products have been shipped to the FDA, according toGenentech spokesman Jim Weiss.
Weiss said that the FDA apparently requested the materials in orderto review the company's overall promotional program and practicesand that the company has cooperated fully. The shipment of allmaterials requested by the FDA was just recently completed. Weisspointed out that a 1992 FDA review of Protropin promotion did notresult in regulatory action of any kind.
Although the FDA investigation has been extensively reported, itwas thought to involve only Protropin. In an interview with The WallStreet Journal on Wednesday, Genentech's CEO Kirk Raab revealedthat t-PA was also being studied. On Thursday, Weiss confirmed thatthe company has submitted to the FDA materials "relevant to allthree products."
Pulmozyme, approved by the FDA in late 1993, was launched in theU.S. market in mid-January. Total sales for the first three quarters of1994 for t-PA, Protropin (and Nutropin), and Pulmozyme were $209million, $166 million and $62 million, respectively.
Genentech issued a press release on Thursday calling the Journalstory "old news."
"We've been cooperating with the FDA for months and havediscussed it publicly," said Raab in a statement. The press releasesaid that the FDA investigation was "not material" to the company.However, investors showed some jitters on Thursday. Genentech(NASDAQ:GNE) stock closed at $46.50, down $1.75 per share.
FDA spokesman Jim O'Hara confirmed that the agency is looking atmarketing practices used to promote t-PA and Protropin and hasbeen "for several months." The FDA is attempting to determinewhether or not Genentech's promotional activities conformed withapproved labeling of the drugs. Promoting the use of a drug for anyindication or in any dosing regimen other than that specified on thelabel is a violation of FDA rules.
Analysts said that both Genentech products are likely used off-label:Protropin, approved for a specific hormone deficiency, is used bychildren who are merely short andt-PA, originally approved using one dosing strategy, has sinceproven to be more effective in a different, "front-loaded" dose.Although an FDA advisory panel recommended that the agencyapprove the new t-PA regimen last June, it has not yet receivedagency approval.
Although off-label use of drugs is common and does not violateFDA regulations, companies are prohibited from actively promotingsuch usage. Credible, tangible evidence of off-label promotion couldcause the FDA to initiate a range of actions, from a warning letter tolegal action. Genentech, widely known for its aggressive marketingtactics, could be vulnerable in this regard, analysts said.
"We've all known for a long time that Genentech has an extremelyaggressive sales force," said Jeffrey Casdin, an analyst with MerrillLynch & Co., in New York. "The company has always worked veryclose to the line and I'm sure that, now and again, they've steppedover it."
In his interview with the Journal published on Thursday, Raab wasremarkably candid: "From a societal point of view, we should havebraked things, done things slower," he was reported as saying.Casdin speculated that Raab would not have spoken so openly withJournal "unless the FDA had something on them."
The House Subcommittee on Oversight and Investigations, headedby Energy & Commerce Committee chairman Rep. John Dingell (D-Mich.), began an inquiry into t-PA earlier this year. Thatinvestigation originally focused on the scientific conduct of a41,000-patient trial (known as GUSTO), supported in part by $55million from Genentech, that showed t-PA saved more lives than afar cheaper, competing drug called streptokinase.
On The Back Burner
One source, who asked not to be identified, said that althoughallegations about the clinical trial "could not be substantiated," thesubcommittee began to focus on allegations about t-PA off-labelpromotional activities. Multiple sources close to that promotionalactivities investigation told BioWorld on Thursday that it has beenplaced "on the back burner." The current political upheaval inCongress will likely involve many of the congressional committeestaffers working on the Genentech investigation, leaving its futureuncertain.
Casdin downplayed the significance of any potential FDA action onthe company's overall profits. "In terms of bottom lineconsequences, it's unlikely that the drugs will be withdrawn or thatthe fines will be large," he said. However, he said sales could sufferlong-term if the company's aggressive 350-person sales force _whose efforts have allowed Genentech's t-PA and Protropin tocapture 70 percent of their respective markets _ drastically changesits style.
Sales of t-PA for the third quarter of 1994 were $65 million, downfrom $73.5 million in the second quarter and $70.2 million in thefirst quarter. Casdin said he found the decline "kind of strange," andattributed it to Genentech's sales force "backing off" after news ofthe FDA and congressional investigations.
O'Hara said that government legal action against a companytypically begins with an injunction ordering that the firm cease itsimproper activities and requiring remedial action. In the case of off-label promotion, remedial actions could include retraining of acompany's sales force and running remedial advertisements inscholarly journals.
An injunction can be contested or negotiated by a company. Ifnegotiated, a "consent decree" is issued which outlines the remedialactions agreed to by both the government and the company. Toughersanctions available to the FDA include seizure of a product and/orwithdrawal of its marketing approval.
"[These two options] are fairly difficult to contemplate because theyaffect the patient population," O'Hara told BioWorld, adding thatconsent decrees are "fairly common practice" for regulatoryagencies.
On Thursday, analyst David Stone of Cowen & Co. in Boston wrotein a report that t-PA sales have "surged" due to scientific studies andnot marketing practices. He maintains a "buy" rating on Genentech.Reijer Lenstra of Smith Barney Shearson wrote a report titled"Negative Wall Street Journal Article No Reason to Sell." n
-- Lisa Piercey Washington Editor
(c) 1997 American Health Consultants. All rights reserved.