Regulatory Focus™ > News Articles > The Top 25 Regulatory Stories of 2012 (US Edition): 10-1

The Top 25 Regulatory Stories of 2012 (US Edition): 10-1

Posted 03 January 2013 | By Alexander Gaffney, RAC

2012 was a momentous year for both the regulatory profession and Regulatory Focus. In our first year as an online-only publication, we covered a quickly changing landscape, dealing with topics that ranged through the quality of pharmaceutical products, the passage of new legislation, the safety of medical devices and the legal issues surrounding product regulation and marketing.

So what happened this year in the US? We're glad you asked. The editors and staff of Regulatory Focus have sorted through the more than 1,600 articles we wrote this year to answer a difficult question: what were the top stories of the year?

Based on a number of factors-the impact of the story on the broader public, the staying power of the story, its impact on regulated industry, its precedence and its novelty-we've sorted, cut and condensed the year into a list of the 25 top stories.

Read on for our explanation of each story, including links to some of the most important aspects of each one.



[10] The High Cost of Bad Behavior

Companies paid big-and we mean big-fines in 2012. GlaxoSmithKline paid more than $3 billion to settle charges that it misbranded Paxil, among other products, making it by far the largest settlement ever (runner up: Pfizer's 2009 $2.3 billion settlement regarding Bextra, Geodon, Zyvox and Lyrica).

Abbott also paid big bucks in 2012, settling charges related to its anticonvulsant medication Depakote to the tune of $1.5 billion-the third-largest settlement in history for pharmaceutical companies. Also fined-but still being litigated-is a $1.2 billion fine levied against Johnson & Johnson for its marketing of its antipsychotic Risperdal. It's fines like these that the industry would like to leave behind in the coming year, especially in the hopes of restoring its oft-tattered reputation among the public.

[9] Resistant to Everything but Changing Regulations (Antibiotics)

The use of antibiotics has been a contentious issue in the US (and around the world) for years, largely the result of concerns over the increasing proliferation of drug-resistant bacteria. Critics have in particular clamored for the reduced use of antibiotics for non-prudent applications (most commonly, its use as a deterrent in food-producing animals).

But 2012 marked an escalation in both results and action on the part of FDA when it came to the use and abuse of antibiotics. Thanks in part to legal action directing FDA to remove antibiotics from animal feed, FDA released new draft guidance and regulations this year that would voluntarily compel antibiotics manufacturers to do just that. The agency also announced that it wants to collect additional data regarding the use of antibiotics from manufacturers, launched a new regulatory pathway aimed at provides incentives to develop new antibiotics, released a new antimicrobial resistance monitoring policy, launched a new task force to assess the regulatory hurdles facing the development of antibiotics and updated its strategic plans to promote the "judicious" use of antibiotics in animals.

While critics still contend that the agency's activities fall short of what the scientific evidence deems necessary to stem the flow of antibiotic resistance, it's still a lot of action for just one year.

[8] Non-Regulators Discover Form 483s

Could 2012 be the year the general public finally started to hear about FDA Form 483s? The forms, which contain the results of agency inspections, are commonly the basis of warning letters and other enforcement activities, and the media in particular has taken a keen interest them as of late. Why? As more stories have involved manufacturing problems, people have naturally been more interested to see what's going on inside a facility. It's one thing to report that problems were found; quite another to detail exactly which problems, and to what extent.

Throughout the year, 483s have also been used as the basis for class-action lawsuits, to bolster corporate takeover attempts, have been blamed for causing drug shortages and have even been the focus of congressional inquiry. Regulatory professionals, take note: Many more people are interested in how your regulatory inspection turns out.

[7] FDA Gets Creative on Opioids

FDA started 2012 with a little-noticed announcement buried within one of its Federal Register notices indicating that it was considering class-wide Risk Evaluation and Mitigation Strategies (REMS) for opioids-a novel and potentially groundbreaking approach toward institutionalizing methods of controlling the use of painkillers. By July, FDA had done just that, releasing an Opioid REMS policy covering all extended-release and long-acting products that requires manufacturers to develop educational products for prescribers.

The move follows years of hand-wringing over how to balance access to opioid products, which are extremely useful for managing chronic or end-of-life pain, with its high potential for abuse. Efforts to make the drugs harder to abuse have, at times, actually led to worse outcomes (some addicts, unable to get high off of opioids, turns to other types of painkillers or harder drugs like heroin instead), and the industry has been seen by some as actively contributing to the problem or ethically suspect at times.

But 2012 marked another big development from FDA: the initiation of a process aimed at creating a new prescribing paradigm for opioid products. The hope: to more narrowly target certain drugs for certain types of pain in the hopes of limiting a drug's use to a particular population for which it is most effective.

These policies will likely start to bear fruit in 2013, but FDA has taken great strides to get the ball rolling in 2012.

[6] Funding? What Funding?

Depending on what month it was this year, FDA either was facing a funding increase, a funding decrease, new user fees, the loss of new user fees, a massive cut in funding, a potential shutdown, and more. It's definitely crazy, and it's potentially the new normal for the agency as it deals with a sharply divided Congress that seems intent on asking it to do more-much more-with as much money as it thinks it appropriate for that particular month.

Though the Congress narrowly avoided the year-end fiscal cliff (well, for a few more months, anyway), FDA is still operating on its previous year's budget thanks to a series of continuing resolutions that have kept it funded, but not at the levels Congress originally envisioned when granting it new authorities and responsibilities. The cutbacks, which have spanned everything from hiring new staff to spending user fees, from embarking on new projects to agency travel, are likely to continue into 2013. Next stop: March 2013, when the continuing resolution runs out, the US is unable to pay all of its bills, and the sequester comes due yet again.

[5] The Pharmaceutical Sport of Cliff Diving

It's long been in the works, but 2012 is when the so-called "patent cliff"-the period during which many of the world's largest-grossing drugs are set to see their patent and marketing protections expire-finally arrived. Companies have since been scrambling to get new products approved and protect existing ones. Some companies have opted to play hardball, using new co-pay assistance cards and all-out marketing efforts to stave off competition (to say nothing of litigation and patent-evergreening methods).

In other cases, generic companies moved in quickly, but not effectively or consistently enough to cause the anticipated dent in sales. Indian generics manufacturer Ranbaxy, for instance, paid a large sum of money early in 2011 to lift sanctions against it only to run into additional problems later on in the year, causing it to halt sales of Lipitor (atorvastatin calcium). The drug's branded version, marketed by Pfizer, is by nearly all measures the most successful drug of all time, selling over $100 billion worth of product since its introduction in the mid-1990s.

Other drugs that effectively (either patent protection ended or competitors were introduced in earnest) dove off the cliff this year: Singulair, Plavix, Zyprexa and Seroquel, Actos and Lexapro. While companies may be past the worst of their losses, they now need to grapple with the fact that many of their long-time sources of cash are unlikely to return.

[4] Obamacare Lives to see Implementation

If the legal profession had a sport, the litigation of the Patient Protection and Affordable Care Act (PPACA) would be something approximating the Super Bowl, World Series and World Cup-all rolled into one event. The stakes of-and interest in-the case had been building for years, and wound up unfolding over three days of highly-publicized proceedings. The medical device and pharmaceutical industries both had much on the line, as Regulatory Focus reported at the time. Some of the biggest stakes included the future of the entire biosimilar regulatory program, new patients the pharmaceutical industry was counting on to drive future sales, and a number of taxes that had served to heavily divide the healthcare products industry.

In the end, the law was upheld in almost unthinkable fashion, with Chief Justice John Roberts-a Bush (43) administration appointee-voting to uphold the law's critical linchpin, the individual mandate, while simultaneously striking down a state mandate to enact Medicaid coverage provisions. Come 2014, when many of the law's most essential provisions come online, tens of millions of Americans will (hopefully) be able to access and afford health insurance for the first time. The crucial issue for the medical device and pharmaceutical industries to be answered over the coming year: What will it mean for the bottom line?

[3] What Good is an Unavailable Drug Product?

Americans experienced something they rarely do in 2012: shortages of a desired product. No, not iPhones or gasoline-drugs.

The year started off with FDA and the media both sounding the alarm over the shortage of certain classes of drugs, mostly older, generic, sterile injectables. The causes of the shortages were legion, as was blame. Some pointed to the profit margins for generic products, which critics argue are too low to allow for upkeep of factories. Others said that overzealous FDA regulators had needlessly closed down deficient factories, taking huge numbers of drugs off the market. Still others blamed government reimbursement regulations, opportunists, legislation, regulations, gray-market pharmacies, compounders, companies and general manufacturing problems. By years end, FDA seemed to have a betterhandle on the situation, even going as far as to allow the import of unapproved foreign drugs to meet demand, but officials said the shortages are likely to persist for years to come.

The shortage situation has few parallels in modern America, perhaps with one notable exception: gasoline. It was perhaps fitting, then, that one Senator proposed a strategic stockpile of essential medicines modeled after-wait for it-the strategic petroleum reserve.

[2] The Year of the Compounder

The drug shortage debacle has another, more pernicious unintended consequence. With drugs in short supply and otherwise unavailable, doctors turned in increasing numbers to compounding pharmacies to create (sometimes allegedly) custom versions of drug products. Still others did so to avoid the cost of certain medications, such as the premature birth prevention drug Makena.

The problem, as regulatory officials would soon be reminded, is that these entities exist in a legal and regulatory vacuum in which some-but not all-regulations apply, and only some of the time. For drug makers like KV Pharmaceuticals, the existence of compounders managed to destroy the profits for its drug Makena, which critics derided for its extraordinarily high cost relative to older versions of the same drug. The company would eventually file for bankruptcy, and is in the process of suing many state Medicaid agencies to compel them to use branded-not compounded-Makena, though it seems to be fighting a losing battle.

But others would soon learn the complexities of compounding regulations the hardest way of all. Dozens of people have died and hundreds more have fallen ill as the result of tainted products compounded by the New England Compounding Center (NECC), a Massachusetts-based compounder whose facility was found to be plagued with sterility problems. In the wake of the scandal, FDA Commissioner Margaret Hamburg would be hauled before Congress to testify in front of openly hostile legislators. Hamburg has called for new authorities and a new paradigm for compounders in the wake of the scandal, but the former may be difficult to obtain after legislators expressed their skepticism that FDA lacked the authority to deal with the problem in the first place.

[1] Reforms, User Fees and More: Meet FDASIA

2012 was-almost unavoidably-a critical year for FDA and industry in one respect: It had to re-authorize a whole host of user fee programs. The programs, which fund much of FDA's activities and give industry greater assurances that their products will be reviewed in a timely and reliable way, come up for renewal every five years. This year saw the renewal of the Prescription Drug User Fee Act (PDUFA) andthe Medical Device User Fee Act (MDUFA), as well as the creation of a user fee program for both biosimilar and generic drug products.

The tension surrounding the negotiations of the omnibus user fee bill-eventually termed the FDA Safety and Innovation Act(FDASIA)-was at times tense, with members of the House threatening to derail the legislation with fundamental changes to FDA's mission and authority, particularly as it related to medical devices. But at the end of the process, perhaps one thing stood out as being remarkable: In a highly partisan Congress, FDASIA was passed into law with near unanimous support in the Congress.

FDA leaders, including Commissioner Margaret Hamburg and Directors Jeffery Shuren and Janet Woodcock (among others) faced relatively tame questioning from congressmen, who, despite some public grumbling, seemed to largely accept the draft legislative framework hammered out in negotiations by FDA and members of industry.

In the end, it seemed like most participants in the negotiation of FDASIA got what they wanted. Public health advocates got a new system to encourage the development of antibiotics and increased regulatory inspections abroad; FDA got considerably more funding to do its work; industry got a (hopefully) more responsive FDA to deal with; and patients will hopefully be the ones to benefit from nearly everything in the bill.

Agree or disagree with any of our assessments? Did we entirely miss a story that you believe deserved attention? Let us know at us at @RAPSorg or @AlecGaffney. If you missed our original #25-11 countdown, it may be found here.

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