TALK to anyone in the pharmaceutical industry – a private-equity investor, a drug executive, a scientist – and within three minutes Mr Pharma will start griping about the Food and Drug Administration (FDA). The agency is incredibly powerful. Its judgment of a drug’s safety and efficacy is the single biggest “X Factor” in America’s enormous pharmaceutical market. In recent years, Mr Pharma will complain, the FDA’s approval process has become slower, its decisions more erratic. A few expletives will follow.
This tension was on dramatic display this week in Washington, DC. The FDA held a two-day hearing on Avastin, a cancer drug that last year generated more than $7 billion in global sales for Genentech, a biotech firm in California, and its parent company, Roche. Avastin treats a variety of cancers, including those of the lung and kidney. In 2008 the FDA gave accelerated approval for Avastin to be used in breast cancer patients. Final approval would depend on further studies that proved Avastin’s beneficial effect.
But the glowing studies never materialised. What is more, some patients experienced severe side-effects, such as haemorrhages and holes in their gastrointestinal tracts. Last year an FDA panel decided that Avastin’s risks to breast cancer patients outweighed its benefits. Uproar followed. Genentech challenged the FDA on its decision, a remarkable move. Even more surprising, the FDA agreed to hold this week’s hearings.
But the panel upheld the earlier decision. Patients will still be able to obtain Avastin, as the drug is approved for other uses. However it is less clear that insurers will continue to cover the drug, which costs about $88,000 a year. Genentech is appealing to Margaret Hamburg, the FDA’s commissioner, who will make a final decision.
The FDA has its flaws. Big Pharma’s complaints about the agency are often justified. But in its evaluation of Avastin, the FDA has served a legitimate role. However Avastin is only the first chapter in a larger fight. The debate over oncology drugs is one of the thorniest in American health care. Americans’ spending on cancer may rise from $125 billion last year to up to $207 billion by 2020, according to Medco, a pharmacy-benefit manger. Some of the new cancer drugs hold immense promise, but others have limited efficacy and are exorbitant.
Nevertheless, a rational debate is elusive. The FDA does not consider drugs’ costs (beware talk of “rationing”). Cancer arouses intense emotion. Patients and their doctors desperately try treatments that have little chance of working. At the Avastin hearing, one patient sobbed and others booed the panelists. Regulators and politicians have a tough job. They must protect patients’ safety, encourage innovation and – soon – have a serious conversation about how much society should pay for a small extension of life. The fight over Avastin has been bitter. Much more is to come.
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The economist: cancer drugs:big pharma’s gripes about the fda