This FDA Scandal May Harm Drug Stocks
An article to be published Wednesday in the Journal of the American Medical Association makes clear that the Food and Drug Administration has allowed drugs for stroke prevention, cancer, and multiple sclerosis onto the market without appropriate safety testing.
Of 35 medicines approved by the FDA in fiscal 2011, Commissioner Dr. Margaret A. Hamburg cites 16 that received some sort of shortened review or other form of expedited approval. This figure has been exceeded only once in the past ten years.
In their article, drug-safety experts Thomas J. Moore and Curt D. Furberg wrote that in an effort to speed the approval of new and innovative prescription drugs, the FDA may have compromised safety.
Furberg and Moore focused their research on three drugs: Caprelsa which is used for advanced thyroid cancer, Gilenya which is used for multiple sclerosis, and Pradaxa which is used to prevent strokes. All three examples, they wrote, “raise the question of whether it was good policy to approve three innovative new drugs with significant safety questions unanswered.”
Citing company research, Furberg and Moore describe the cancer drug Caprelsa as “sufficiently toxic that overall survival” was “not different from that achieved with placebo,” and the MS drug Gilenya as having seven major safety issues including adverse effects on heart rate. The FDA approved both drugs, although insisted on 10 post-marketing studies for Gilenya.
But opinions differ.
Both drugs manufacturers have responded to the report. AstraZeneca (NYSE:AZN) said that during trials patients on Caprelsa had “a 65 percent reduction in the risk of their disease progressing,” while Novartis (NYSE:NVS), who makes Gilenya, said there is an “increasing experience of the drug’s improving safety profile.”
Medical researchers also have concerns for the speed in which new drugs are approved. Chief research officer for National Multiple Sclerosis Society Timothy Coetzee said in an interview, “We need various treatment options for MS, and I would hardly say the GIlenya experience constitutes going too fast.”
What constitutes “going to fast” has been the sticking point for pharmaceutical companies, the FDA, and medical researchers.
Steven E. Nissen, chairman of cardiovascular medicine at the Cleveland Clinic, said the FDA could strike a better balance of safety versus innovation.
“Once a drug is approved, it is often very difficult to put the genie back in the bottle,” he said in an interview with the Wall Street Journal.
However the FDA has felt pressure from medical groups and the public to move faster.
“I’d like to stress that where there are unmet medical needs, the public has told us they are willing to accept greater risks,” Director of the FDA’s center for drug evaluation and review Dr. Woodcock said. “The cancer community in particular says we haven’t used accelerated approvals enough.”
If this report creates enough of a stir, Novartis and AstraZeneca won’t be the only pharma companies to come under pressure. A slower and more thorough FDA will also help stop ineffective drugs from other top drug makers such as Pfizer (NYSE:PFE), Merck (NYSE:MRK) and Abbott Laboratories (NYSE:ABT). Investors should expect undeserved revenues to follow.
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