IOM REPORT COULD HARM INDUSTRY REVENUE, PROMPT LEGISLATIVE CHANGES
The Institute of Medicine (IOM) study on the FDA's drug safety practices could do long-term damage to the industry bottom line and will likely spur legislation in the next Congress, sources say.
IOM's Sept. 22 report, "The Future of Drug Safety: Promoting and Protecting the Health of the Public," blasted the agency's handling of drug safety issues and recommended legislative action to fix these failings. The report recommended that Congress give the FDA the authority to require whatever postmarketing risk assessment and risk management programs are needed to monitor and ensure the safe use of drug products. The study began 18 months ago in response to criticism of the FDA's handling of Vioxx.
The report may harm industry's bottom line over the long-term because of the additional burdens these recommendations would place on companies, an industry analyst said. The recommendations "are negative for U.S. major pharmaceutical investor perception and longterm industry growth prospects," David Risinger, a Merrill Lynch analyst, said in a Sept. 25 report.
An increase in FDA safety oversight "could both raise the R&D costs and hurdles for bringing new drugs to market and raise the costs for postmarketing monitoring," Risinger wrote. Restrictions on DTC advertising and the requirement that new drugs be labeled with a special symbol "could limit initial sales growth potential and thus the return on investment prior to patent expiration."
But some observers say this assessment is premature. Because the report's recommendations are "ideas for change, not the change itself," it is too early to gauge the impact on industry, Harry Sweeney, the CEO of Dorland Global Health Communications, said. Peter Pitts, director of the Center for Medicine in the Public Interest (CMPI) and a former FDA associate commissioner for external relations, was also skeptical. "I don't see the relevance in a report that makes observations based on 100 percent of the report being adopted."