Copyright 1999 Federal News Service, Inc.
Federal News Service
JULY 1, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
3056 words
HEADLINE: PREPARED TESTIMONY OF
JONATHAN
SPICEHANDLER, M.D.
SCHERING-PLOUGH RESEARCH INSTITUTE
BEFORE THE
HOUSE JUDICIARY COMMITTEE
INTELLECTUAL PROPERTY
SUBCOMMITTEE
BODY:
Mr. Chairman, members of the
Subcommittee, thank you for the opportunity to testify. My name is Jonathan
Spicehandler, and I am President of Schering-Plough Research Institute (SPRI),
the pharmaceutical research and development unit of Schering-Plough Corporation
(Schering-Plough). I began my career with SPRI in 1982. In 1987, I was appointed
Vice President of Worldwide Clinical Research and in 1993 I became President of
the ScheringPlough Research Institute. In total, I have worked for
Schering-Plough for 17 years. ScheringPlough is a worldwide pharmaceutical
company committed to discovering, developing, and marketing new drug therapies
that can save lives and improve people's health and quality of life. Schering-
Plough products are used in the treatment of cancer, hepatitis B and C, cardiac
disease, allergic and respiratory disorders, and various types of
life-threatening infections.
I am pleased to offer testimony on behalf of
Schering-Plough in support of H.R. 1598, the Patent Fairness Act of 1999. This
Bill would establish an independent review process within the Patent and
Trademark Office to consider the possibility of patent restoration for seven
pipeline drugs those that lost significant patent life because of lengthy review
in the drug approval process and that did not receive the same five years of
patent restoration that other drugs received.We believe H.R. 1598 will foster
research and development by reaffirming our nation's commitment to the
protection of intellectual property rights.
Sehering-Plough's Commitment to
Pharmaceutical Research & Development
Schering-Plough is a
research-based pharmaceutical company. And let me emphasize the word research.
Our 1998 worldwide research and development (R&D) expenditures exceeded $1
billion, 19 percent more than the prior year. In 1999, Schering-Plough expects
R&D spending to increase by more than 15 percent. Our R&D expenditures
have increased steadily and significantly, as shown in Table 1.
Schering-Plough's ability to invest in research and development is directly
dependent on the success of its already marketed products. It is no coincidence
that since the introduction of Claritin in the United States in 1993, our
R&D expenditures have almost doubled.Table 1. Schering-Plough Corporation's
Investment in Pharmaceutical Research and Development
The development of new
drug therapies is both a high-cost and high- risk endeavor. Only one in every
5,000 chemical compounds that are identified by research scientists as potential
pharmaceuticals ever reaches the U.S. market. On average, bringing a new drug
from the laboratory to the marketplace takes between 12 to 15 years and costs up
to $500 million.
Basic pharmaceutical research is an examination of the
compound's structure and its potential biological effects in humans. A potential
new drag must be evaluated in laboratory testing, animal testing, and human
clinical studies in order to develop the data required for a new drug
application, or NDA. At each of these steps, issues may, and often do, arise
that result in further research being terminated. Few compounds make it to the
clinic. For the rare product that makes it through clinical study, FDA then
reviews the substantial amount of data contained in the NDA. Within FDA's Center
for Drag Evaluation and Research (CDER), personnel from different scientific
disciplines review the drug chemistry data, pharmacology and toxicology data,
biopharmaceutical data, and clinical data.
The development of new drugs is
financed almost entirely by private industry. For example, from 1981 through
1990, 92% of all new chemical compounds developed were developed by private
industry. Research based pharmaceutical companies will invest $24 billion
dollars in research and development in 1999.
The United States leads all
countries in company financed pharmaceutical R&D. In 1995, 36% of all
company financed pharmaceutical R&D came from the United States. This was
almost twice as much as the second rated country, and more than three times the
amount of the third. The United States also leads, by a significant margin, in
the development of new pharmaceutical compounds. For example, 45% of all new
global drugs developed between 1975 and 1994 were developed in the United
States. This was three times the number of the country rated second. It is no
accident that the U.S. pharmaceutical industry leads the world by a wide margin
in both company-financed pharmaceutical research and the development of new drug
products.
As I stated before, the ability to invest in research and
development is directly dependent on the success of already-marketed products.
Our research programs cover a broad spectrum of medicine. They all address
important medical needs and as a result each has the potential to critically
impact public health.
- In the area of cancer: We are involved with the
development of chemotherapy agents including a new and safer form of
doxorubicin, one of the most widely used anti-cancer agents. We are also
evaluating a new agent, temozolomide, for the treatment of among other things,
skin cancer and brain tumors in children.We are pioneers in the discovery and
early development of a new class of drugs called Famesyl Protein Transferase
inhibitors. This novel approach could lead to new opportunities in the therapy
of cancers that do not currently have effective treatments, such as pancreatic
and colon cancer. Finally, we are among the world leaders in gene therapy and
are looking at the potential impact of an important cancer related gene, p53,
for the treatment of ovarian, lung, and other cancers.
- In the infectious
disease area: Schering is the leader in the field of hepatitis C and we have had
a tremendous impact on public health with the introduction of ribavirin together
with interferon alpha 2b. For the first time, this has brought therapy for this
condition that can result in viral eradication in between 40% and 50% of
patients. We are committed to building on this breakthrough therapy with longer
acting interferons and new oral therapies for hepatitis C. Our new long- acting
interferon is also being studied in oncology (melanoma, CML). We are also
involved with the clinical development of a new antibiotic for the management of
life-threatening infections caused by multi-resistant pathogens.
- In the
biotechnology area: We are conducting clinical trials with Tenovil, or
interleukin-10, a recombinant human protein in the field of devastating chronic
inflammatory processes such as rheumatoid arthritis, severe psoriasis and
Crohn's Disease. Tenovil is also being assessed in severe acute inflammatory
diseases which address the worst situations confronted by critical care medicine
specialists.
- In the respiratory area: Schering is completing the.clinical
development of a new inhaled corticosteroid for asthma. It is the most potent
compound in its class and we expect it to provide the best safety and
effectiveness profile available. Also, we are in the early development stage for
a new monoclonal antibody directed against interleukin-5 for the management of
severe forms of asthma. Our society wants the most effective drugs possible.
When someone is seriously ill, we expect that there will be a drug available to
treat that illness. Schering-Plough's R&D effort is directed at addressing
this expectation. But it is important to remember that our ability to invest as
heavily as we do in research is dependent on earnings from marketed products.
Especially critical are the profits from a small number of very successful
products.
The pharmaceutical industry is both highly fragmented and
extremely competitive. In 1998, the largest pharmaceutical company ranked by
sales in the United States represented only 6% of the total market. The top ten
companies collectively represent only 51% of the total market. Competition is
fierce not only in the marketing of products, but also in the discovery and
development of new products.
Pharmaceutical companies are under tremendous
pressure to discover products. Companies that do not discover and develop new
products oftentimes do not survive. The number of pharmaceutical companies that
have disappeared through mergers and acquisitions in recent years is evidence of
this fact. Given this environment and because so few compounds ever make it
through the development process and to the market, it is critical that the rare
successful product have full patent protection.
The Outlier Pipeline Drug
Problem
Recognizing the importance of pharmaceutical R&D, Congress
enacted the Drug Price Competition and Patent Term Restoration Act of 1984, also
known as the Hatch-Waxman Act.1 Under that Act, the holder of a
patent for a new drug, medical device, animal drag, or food additive can apply
to the Patent and Trademark Office (PTO) for restoration of part of the
effective patent life lost due to regulatory review by the Food and Drug
Administration (FDA).
For most drugs, the Hatch-Waxman Act
limits the restoration period to five years. For drugs whose regulatory review
straddled the enactment date of the legislation--so-called "pipeline" drugs--
statute limits the restoration period to two years.
At the time of enactment
of Hatch-Waxman, the average time for FDA approval of an NDA
was 2.25 years.2 However, for seven outlier pipeline drugs, regulatory review
took many years longer than Congress would have anticipated based on this 2.25
years average review time. FDA approval of the NDAs for these drugs took over 5
years, more than twice the amount of time we (and Congress) would have expected.
Solution to the Outlier Pipeline Drug Problem
Representatives Bryant and
McDermott, together with 42 co-sponsors, have introduced legislation that would
create a process by which the PTO could consider applications for patent term
restoration for these seven outlier pipeline drugs. The bill, H.R. 1598, would
authorize the PTO to determine whether pipeline drugs that were subjected to
more than five years of NDA review by FDA should be awarded patent term
restoration of up to three years. The period of patent term restoration would be
reduced for any period of time in which the applicant did not exercise due
diligence in pursuing approval.
In past years, Congress has been asked to
award patent term extension directly to a specified drug product. In fact,
Congress has enacted product specific patent extensions for pipeline drugs three
times since enactment of Hatch-Waxman. But this private bill
approach has been criticized for politicizing the patent term restoration
process. In contrast, H.R. 1598 creates a neutral administrative process. Under
H.R. 1598, the PTO -- an informed decisionmaker with expertise on patent matters
-- conducts an administrative proceeding in which interested parties - including
generic drug manufacturers -- can participate. All seven outlier pipeline drugs
would be eligible to participate in the process, and no drug would automatically
receive patent term restoration. We believe this process-oriented approach can
effectively address the outlier pipeline drug problem, and we support this
legislation.
Factors Affecting FDA Review of Claritin
Claritin
(loratadine), Schering-Plough's once-daily, nonsedating antihistamine used to
treat seasonal allergies and urticaria (hives) would be eligible for the
procedure contemplated in H.R. 1598. Claritin was in the FDA review pipeline
when Hatch-Waxman was enacted in 1984. Based on the average
review times at the time, Claritin, with an NDA submission date of October 1986,
would have expected approval in the first quarter of 1989. Instead, the Claritin
NDA was not approved until April of 1993. Schering had to wait more than six
years after the NDA was submitted to market Claritin in the United States.
Less than a year after the NDA for Claritin was submitted to FDA, on October
23, 1987, an FDA advisory committee recommended that FDA approve the Claritin
NDA. FDA often promptly approves a drug that has received a favorable
recommendation from an advisory committee. In the case of Claritin, however, two
unanticipated scientific issues arose after the initial approval recommendation.
Resolution of these issues was complicated by a lack of adequate resources at
FDA, and by a reorganization within FDA's drug center and related reassignment
of the Claritin NDA to a new reviewing division.
One of the two scientific
issues involved FDA's review of the toxicology data for loratadine. It appears
FDA's review of the toxicology data was prolonged because of a federal
government study of another drug that occurred while Claritin was in the review
queue at FDA. The study's results supported an association between the
antihistamine doxylamine succinate and certain types of tumors in rats and mice.
Substances administered in high doses over a long period that cause or promote
tumors in animals are not necessarily toxic to humans. Commonly available
medicines such as phenobarbital, used for over 30 years to safely treat
epilepsy, support this fact.
We believe that in light of the doxylamine
study findings, FDA determined to reevaluate the toxicology data for loratadine.
FDA requested, and Schering-Plough supplied, a re-analysis of the existing
toxicology data. FDA also referred the matter to an Advisory Committee, which
concluded in 1991 that loratadine, doxylamine and cetirizine (another
antihistamine) were not likely to present a risk of cancer in human beings. In
addition, in 1992, Schering-Plough submitted the results of a second
mutagenicity assay confirming the results of earlier tests showing that
loratadine did not present a risk of cancer in human beings. In total,
resolution of the toxicology issue took over four years. Schering acted
diligently throughout FDA's review of the toxicology data.
The second
scientific issue concerned bioequivalence. Schering-Plough conducted clinical
studies using a capsule dosage form and sought marketing approval for a tablet.
It was then common in the drug industry to conduct trials with a capsule and
seek marketing approval for a tablet.
The use of capsules in clinical trials
was considered beneficial in conducting early stage studies such as dose ranging
studies and was also advantageous in complying with FDA's requirement for
adequate, well controlled (double blind) comparative studies, to preclude
patient or investigator bias. The preference for a marketed tablet product was,
and is, based on consumer preferences and, more importantly, tablets are much
safer from a product tampering perspective. Schering's use of capsules in
clinical trials and its intention to file an NDA for a tablet was known to FDA.
Having followed this practice, Schering-Plough submitted data in the NDA to
establish the bioequivalence of the two dosage forms.
A standard method for
demonstrating bioequivalence is to compare the blood levels of the active
ingredient and/or metabolite of each dosage form. Schering-Plough's view was
that bioequivalence between the capsule and tablet forms should be assessed
using measurements of the active metabolite, because the drug ingredient
loratadine is rapidly converted into the metabolite in the body. Moreover, data
indicate that the antihistamine activity is greatly related to the
pharmacological properties of the metabolite, and that the bioavailability of
loratadine varies significantly from person to person. FDA believed it was
necessary to compare the blood levels of both the active ingredient and the
metabolite. While disagreeing with the agency, Schering-Plough quickly conducted
a new clinical study that resolved the matter and was acceptable to both the
company and FDA. Again Schering acted diligently in all its dealings on this
issue.
FDA addressed the toxicology and bioequivalence issues with caution.
This is consistent with the agency's public health mission and statutory
mandate. Review of the Claritin NDA also occurred during FDA's reorganization of
the Center for Drug Evaluation and Research (CDER) which began in 1987 and
continued until 1989, and before enactment of the Prescription Drug User Fee Act
(PDUFA) in 1992. Before enactment of PDUFA, FDA lacked adequate resources to
review NDAs expeditiously, particularly for drugs that were not designated for
"priority" review. The Claritin NDA was assigned a "standard" as opposed to
"priority" review designation. During the reorganization it was assigned to the
same division that reviewed cancer drugs, which had "priority" designation. All
of these factors certainly had an adverse impact on the time the Claritin NDA
spent in the regulatory review. In contrast to the over six years spent in
regulatory review in the United States, Claritin received approval in 2.5 years
or less in many countries with sophisticated regulatory agencies, including the
United Kingdom, France and Canada.
Nobody could have anticipated, at the
time the 1984 Hatch-Waxman law was enacted, that Claritin would
have a 77 month NDA review time. Like the other pipeline drugs, Claritin
received only two years of patent term extension. But Claritin and the other six
pipeline drugs that would be eligible to apply for patent term restoration under
H.R. 1598 spent over 5 years in FDA review. Non-pipeline drug products received
a full five years of patent extension under Hatch-Waxman. In
fairness, manufacturers of the seven outlier pipeline drugs should be given an
opportunity to present their case to the PTO for up to three years of patent
term restoration under H.R. 1598.
In conclusion, strong patent protection is
essential to reward pharmaceutical innovation and risktaking, and to provide the
funding for the development of new drag therapies. By enacting this Bill,
Congress can enhance intellectual property rights. In this way, it can help make
sure that innovative companies have the ability to reinvest in the discovery and
development of life-saving and life-enhancing drugs.
FOOTNTOES:
1 See
Pub. L. No. 98-417, 98 Stat. 1585, codified in scattered sections of 15 U.S.C.,
21 U.S.C., 28 U.S.C., and 35 U.S.C. (Sept. 24, 1984).
2 FDA, "New Drug
Evaluation Statistical Report" 53 (Oct. 1985) (FDA mean approval time of 26.9
months for new molecular entities in 1984).
END
LOAD-DATE: July 2, 1999 
