FDA Bill Would Help Drug Firms

WASHINGTON — Legislation that Congress passed over the weekend will make the Food and Drug Administration faster and more efficient, helping drug, medical-device and food companies expand markets and accelerate growth, analysts and industry representatives said.

The legislation, which President Clinton intends to sign, would streamline FDA procedures, reduce red tape, loosen regulations, and speed reviews of new drugs and medical devices.

Among the companies likely to benefit are Eli Lilly & Co., Brystol-Myers Squibb Co., Pharmacia & Upjohn Inc., Medtronic Inc. and Kellogg Co.

“It’s going to mean less time and probably less money” for a company to win approval of new products, said Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers Assn. “It’s important to the bottom line. Faster times mean a faster return on investment.”

The legislation is also important for drug companies because it would renew and strengthen a popular expiring program that has already sped up reviews of new drugs dramatically. Under the so-called user fee act, drug companies would pay fees in return for more staff at the FDA and faster reviews.

“I don’t think there’s any question it’s important for both device and drug companies,” said Barbara Dreyfuss, an analyst who follows health-care regulation for Prudential Securities. “It’s a very positive bill for the industry.”

The measure, approved Sunday night, would improve the overall regulatory atmosphere at the FDA, remove uncertainty at many stages of the approval process, and speed the development time for drugs and devices across the board, analysts say.

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Companies such as Eli Lilly are likely to benefit from a provision in the legislation that would make it easier for them to promote unapproved uses of a drug, potentially meaning millions in dollars in extra sales, analysts said.

Lilly is seeking FDA approval, for example, of its osteoporosis-prevention drug Evista, which some studies have also shown to help prevent breast cancer. Though the company isn’t seeking approval for that claim at the moment, the FDA overhaul bill would allow Lilly to distribute studies showing the benefits to doctors, as long as Lilly pledges to study and seek FDA approval of the new claim within a set number of years.

“Lilly may be able to promote these claims fairly aggressively,” said Aros Securities analyst David Maris.

Other analysts said small biotechnology companies--which have less money for research--and companies with cancer drugs, many of which are used in unapproved combinations, will benefit most from the provision limiting FDA review of additional uses for approved products. Among those companies likely to benefit are Bristol-Myers Squibb, Pharmacia & Upjohn and biotech companies such as Centocor Inc. with products in the late stages of the development process.

“The effect of the changes will result in getting safe and effective drugs to market about one year earlier,” said Alan Holmer, president of industry group Pharmaceutical Research Manufacturers of America. “That’s extremely important.”

On the medical-device side, several parts of the bill--including required meetings between companies and the FDA early in the review process and reductions on post-marketing requirements--would save companies time, money and frustration, industry representatives said.

“For device companies, it is more significant,” said Ira Loss, an analyst for HSBC Washington Analysis, a firm that follows the health-care regulatory issues.

The bill includes a limited third-party review program that industry representatives say will ease the burden on an overloaded medical device division of the FDA, and speed the process, much as the user-fee act does for drugs.

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Device measures would also ensure that the agency focuses its attention on the intended use for a device, rather than questioning the impact of possible other applications. For companies, that provision would make it easier to prepare device applications and should shorten product development.

“They don’t have to answer all the potential questions the FDA has,” said Jim Benson, vice president for regulatory affairs at the Health Industry Manufacturers Assn., a trade group for the device industry. “It allows them to put their [development] dollars where they count.”

Medical-device companies with a lot of products under review would be helped, analysts said.

The bill also would reduce some of the agency’s oversight of the food industry. To date, it has approved only 10 health claims about food. Under the legislation, it would be easier for companies to make the claims, speeding up a process criticized as snail-like and burdensome. That could be good news for companies such as Kellogg, which in June petitioned the FDA for permission to claim that its wheat bran fiber helps reduce the risk of colon cancer.