FDA review hampered by the ghost of Vioxx
Drug makers lose money and patients die, but FDA doesn't want to approve potentially deadly drugs.
By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - The FDA wants more funding to help speed up its drug review process, which could help drug makers by getting products on the market faster, but the agency might need to drop its fear of deadly new drugs if it really wants to benefit the industry and patients.

As part of its nearly $2 billion budget proposal, the Food and Drug Administration is asking for a $71 million increase, including $6 million for Critical Path, its effort to streamline the drug review process. The FDA has set a review time goal of 10 months for standard drugs and six months for fast-track drugs with life-saving potential in areas like cancer and heart disease.

Will this budget increase assuming it gets approved by Congress translate into future revenue for drug makers? It might, says Fran Hawthorne, author of "Inside the FDA," but it's hard to say how much.

Each month that a potential blockbuster spends going through the review represents about $40 million that it could be generating on the market, said Hawthorne. The $6 million that the FDA is seeking for Critical Path could translate into the hiring of dozens of new reviewers, said Hawthorne, noting that each reviewer works on about a dozen drugs at a time.

"Each reviewer's salary is $100,000 at a rough estimate, so it could pay for a lot of reviewers," said Hawthorne. "That's the biggest problem, the lack of people, and that's what creates the biggest time pressures."

More staff isn't the only thing the FDA needs, said Sherry Hayes, director of regulatory analysis for Ernst & Young. Hayes said the FDA proposal, which has been included in the president's budget, would go towards staff, resources and the technology needed to review genomics-related drugs from biotechs, as well as the review of medical devices and the funding of collaboration with research institutes. So if the FDA shaves a couple of months off its review process, that potentially means more revenue for drug makers and more life-saving drugs for patients in need.

"I think it can mean a lot, obviously, for the investment community," said Hayes. "A couple of months on the market means a lot for the companies if they've got their ducks in a row [to manufacture and market the drug immediately.] From a patient's perspective, there are people whose whole lives hang in the balance in those 60 days."

FDA's fears of another Vioxx

Here's where the FDA faces a double-edge sword: Even if patients are dying every day for want of experimental drugs that languish in bureaucracy, the agency is haunted by the ghosts of Vioxx, Tysabri, Bextra, Palladone and Phen-fen, to name a few of the drugs that the agency approved, then later withdrew from the market because of health risks that slipped through its review process. Recently, the FDA has also weighed the risks of suicidal thoughts in teenagers taking antidepressants and heart attacks in children taking stimulants for attention deficit hyperactivity disorder.

Sam Kazman, an expert with the Competitive Enterprises Institute, said the FDA stymies itself by juggling fears of "Two sorts of mistakes: You can approve something that later turns out to be a disaster. On the other hand, you can delay a drug that's really needed, and people suffer medically as well."

The FDA doesn't want another Vioxx: the arthritis painkiller that it approved but then Merck withdrew in 2004 after a study showed an increase in heart attacks and strokes in patients who took the drug for at least 18 months. Since the withdrawal, nearly 10,000 lawsuits have been filed against Merck, blaming the company for fatal and non-fatal heart attacks.

Nonetheless, Kazman believes the FDA is erring on the side of caution.

"Caution sounds like a great thing, but if I'm drowning and you're going to throw me a rope, but you want to make sure that the rope conforms to all federal standards, well by then I've already gone under," said Kazman. "The general attitude at the FDA has been, 'You can either have it done fast or you can have it done right.' You just got to have people understanding how much is at stake."

Kazman said the FDA worries about approving potentially deadly drugs because the agency is directly accountable, while it's not held accountable for patients who die because new drugs aren't being approved quickly enough.

"I think that the most of what is required at the FDA to speed up drug approvals has more to do with the agency's attitude than with funding," said Kazman.

Hawthorne, the author, said there's no way to detect all side effects for drugs before they go on the market, making risk inevitable. She said the laws for post-market review should be strengthened to mandate post-market safety tests and "to give the FDA absolute authority in imposing label changes without having to negotiate with the drug companies."

But even a streamlined FDA review won't pull Big Pharma out of its industry-wide slump, said Hawthorne.

"The problem isn't with the FDA not approving drugs fast enough; it's that the drug industry isn't coming up with enough new drugs," said Hawthorne.

To read more about the FDA and Critical Path, click hereTop of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.