Online Exclusive: Inside the FDA.

The impact of President Obama’s Day One memo calling for “an unprecedented level of openness in government” reached the FDA in June 2009 when the agency announced the formation of a task force to increase transparency of its internal operations.

Phase I of the Transparency Task Force’s initiative culminated in its creation of the website FDA Basics to give the public fundamental information about how the agency operates, regulates and makes decisions.

Last summer the task force embarked on Phase II, aimed at helping consumers and shareholders better understand the agency while maintaining the confidentiality of trade secrets and patient information.

It held two public meetings seeking input on how and in what areas the FDA can better disclose agency information. In all it gathered and reviewed more than 1,500 comments.

On May 19, the FDA released the result–a report from its Transparency Task Force outlining 21 draft proposals on which it took comments through July 21. The proposals are aimed at better explaining FDA decisions, providing more data to doctors and patients, illuminating enforcement efforts and supporting innovation for rare diseases.

“Our goal is to facilitate transparency that promotes public health and innovation,” Dr. Joshua Sharfstein, FDA principal deputy commissioner and chair of the Transparency Task Force, said in announcing the report. “These proposals reflect a careful balancing of the importance of transparency with the importance of protecting trade secrets and confidentiality.”

But despite the FDA’s efforts at balance, the drug and device industry has some reservations about the proposals–many of them major changes to longstanding FDA rules.

“They’re proposing a number of changes in how they provide information and particularly what information they provide to the public,” says Arnold Friede, a principal at Arnold I. Friede & Associates and former senior corporate counsel at Pfizer. “Should the proposal be implemented, there is going to be an opportunity for a greater view by the public of the inner workings of the FDA, as well as a greater opportunity for the public to gain access to information filed with the FDA. This raises a number of very serious and important legal questions about the protectability of trade secrets and the like.”

Pre-Premarket Notice

The 21 draft proposals are divided into topic areas, proposing steps toward greater disclosures in: adverse event reports; docket management process; enforcement priorities and actions; import procedures; inspections; product applications and investigational applications; recalls; and warning and untitled letters. In whole they promise to open up the FDA’s inner workings to unprecedented scrutiny, which has drug and device companies running scared.

“Before, companies could characterize an outcome or a dialogue with the agency, and the agency has not been free to also give its view on what was being said. It was constrained by the law,” says Paul Kim, a partner at Foley Hoag. “Of course companies abide by SEC guidelines in terms of material facts and what they’re disclosing about what the agency’s doing–but it’s a whole new category to talk about taking huge areas of information and making that part of the public dialogue.”

The proposals that drew the most comment in the public meetings the task force held in 2009 are the same ones that will likely draw the most concern in comments to the draft proposals. Much of the concern is concentrated in the area of product applications.

Proposal 10 calls for the FDA to disclose the submission of applications to market a drug. The task force’s report justifies the proposal as helpful to, for example, patients suffering from a specific disease who often query the FDA for information on new drugs.

But that information generally has remained undisclosed in the past, with the companies that sponsor the applications carefully controlling any release of information. The implications of making it all public could be great, threatening to give competitors a look into companies’ future marketing plans.

“With regard to generic drugs, if someone knows that a generic application is out there already, I could certainly see companies and citizens petitioning the FDA in an effort to, one might argue, delay some type of generic competition,” says Kurt Karst, a director at Hyman, Phelps & McNamara. “That’s going to burden the FDA even more than it’s already burdened and will slow down the drug approval process
even more.”

Trial Disclosures

Under other proposals, the FDA would disclose information about letters it issues when it rejects a marketing application for a medical product or cannot approve the application in its present form.

“A lot of people believe the public should be entitled to know about the rationale for an FDA rejection of an application,” Friede says. “Should these changes be implemented, it would be an example of something that would represent a real sea change from what has been past practice.”

The task force’s report also addresses greater disclosure around investigational applications from companies seeking FDA permission to conduct clinical investigations of unapproved drugs and devices. “There’s been a big push for the disclosure of data so they can be reviewed not only by FDA expert committees but also by the public at large,” Friede says. “There’s been a lot of sentiment that companies doing clinical trials do them, in some respect, in support of the public, and thus
the public should have some right to review the data at the same time as the FDA does.”

Proposal 9 calls for the FDA to “disclose the existence and, when asked, confirm the existence or nonexistence of investigational applications.” In addition, Proposal 10 calls for the agency
to disclose whether such an application has been placed on hold, terminated
or withdrawn.

“That way, individuals that are interested in enrolling in the clinical trial, or already are enrolled, and owners of animals that may be participating in the clinical trial are aware of FDA’s action and can take steps to limit exposure to unnecessary risks,” the task force reasoned.

Side Benefits

But to what extent should companies benefit from the design of past clinical trials of their competitors?

The task force addressed that concern by writing, “Providing the status of the clinical trial does not disclose information that could be used by competitors to ‘free-ride’ off of the sponsor’s innovative effort. In some cases, the existence of human clinical trials is
already public.”

The other side of the coin is that if the FDA goes through with such disclosures, companies will also benefit from their competitors’ information.

“Certainly, everyone doesn’t want the FDA’s criticism of their studies to be public information,” Friede says. “At the same time, they would like the benefit of seeing criticisms of other studies. You can’t have your cake and eat it too. But there’s something to be said for not spinning the wheel over and over again. Isn’t there some overriding public interest in having Companies Two and Three avoid that, even if they gain some competitive advantage in having access to that information?”

Over time, Friede speculates, the fairness would even out.

Kim assures that trade secrets
protected by the law are still safe and the agency isn’t interested in litigating such issues.

“But to the extent it can do this consistently while protecting information, if they can truly make the decisions open to the public, everyone would be well served,” he says. “It’s going to be healthy to have this continuing conversation, and should the agency misstep in a big way, there will be opportunities
to recalibrate.”