Washington Editor

WASHINGTON - The Biotechnology Industry Organization filed a court brief in support of Amgen Inc.'s claim that a district court erred when it dismissed the company's complaint challenging the government's proposed rule for reimbursing the costs of certain drugs.

At issue here is a decision handed down in December by the U.S. District Court for the District of Columbia that cited Amgen's lack of standing in its case to stop the Centers for Medicaid & Medicare Services and the Department of Health and Human Services from implementing an outpatient hospital reimbursement rule that would impact payments for Aranesp (darbepoetin alpha), Amgen's red blood cell booster. (See BioWorld Today, Dec. 27, 2002.)

Amgen, of Thousand Oaks, Calif., filed an appeal with the U.S. Court of Appeals for the District of Columbia Circuit and is scheduled to present oral arguments Dec. 12.

The problem is that CMS believes Aranesp and Procrit, a similar product made by Johnson & Johnson, of New Brunswick, N.J., are "functionally equivalent" and should be reimbursed at the same level under the outpatient prospective payment system, or OPPS. The rule went into effect Jan. 1. (See BioWorld Today, Nov. 4, 2002.)

While Amgen said the reimbursement system will cause it to lose only about 10 percent per year on Aranesp, BIO views the bigger picture here as a serious reason for concern.

From BIO's standpoint, both the functionally equivalent element and the lower court's decision that Amgen has no standing to challenge the rule are problematic.

In its brief, referred to as an amicus curiae, or friend of the court, BIO says if the lower court's decision is not overturned, it potentially would deprive "interested parties, including biotechnology companies and BIO itself, of the ability to challenge any CMS decision that establishes Medicare rules or makes reimbursement determinations that violate the Medicare Act or fail to comply with appropriate procedural safeguards."

Meanwhile, BIO says the potential ramifications of CMS being able to determine without any procedural safeguards that two drugs or biologics are "functionally equivalent" and should be reimbursed at the same level under Medicare "are simply staggering."

BIO still contends that CMS established the functionally equivalent standard last fall without proper rulemaking procedures. Specifically, BIO said the government failed to seek public comment on a proposed rule before implementing it.

FDA Updates Modernization Efforts

It's been a year since the FDA released an ambitious two-year plan to modernize the way it regulates drug manufacturing by incorporating state-of-the-art sciences and technologies into its system while encouraging the same efforts within the industry. (See BioWorld Today, Feb. 21, 2003, and Aug. 23, 2002.)

In a conference call with reporters Wednesday, FDA Commissioner Mark McClellan spent about 15 minutes bringing listeners up to speed on the agency's progress in the past year. "The idea is to increase efficiency while maintaining FDA's high standards for safety and the regulation of human drugs, biologics and veterinarian product manufacturing," McClellan said.

The agency listed five new guidances aimed at improving the consistency and coordination of its drug quality regulatory programs. They are:

• A guidance for FDA-regulated industry on the use of electronic records and signatures.

• A draft guidance on a process for resolving disputes that erupt over scientific and technical issues related to current good manufacturing practices.

• A draft guidance on the aseptic processes used in the manufacture of sterile drugs.

• A draft guidance on preparation and use of comparability protocol for assessing chemistry, manufacturing and control changes to protein drug products and biological products.

• A draft guidance for process analytical technology, a framework for allowing regulatory processes to more readily adopt state-of-the-art technological advances in drug development, production and quality assurance.

Furthermore, McClellan said the agency has been working with academia, industry and other government agencies to promote new and innovative approaches to drug development and regulation.

Among the new approaches, the agency plans to set up what's called the Pharmaceutical Inspectorate, or PI, which is a group of employees that will conduct human drug manufacturing inspections.

In another area, the agency is looking to improve international standards for drugs by participating in overseas workshops at educating, discussing and identifying innovative ways of achieving its goals for a better FDA.

To view the entire initiative, including the agency's "5-Part Strategic Action Plan to Protect and Advance America's Health," visit the agency website at www.fda.gov.