Animal & Veterinary
MUMS - Industry Perspective - AHI
Dr. Richard Carnevale
DR. CARNEVALE: Thank you very much. I don’t know if I can be as entertaining as Dr. Clayton. I really enjoyed his presentation. Let me thank the organizers, Dr. Oeller and Dr. Webb for inviting AHI to participate in this meeting and make some comments on behalf of the Animal Health Institute. I must apologize right up front, and maybe this is where Dr. Webb is going to create some violence. I did not bring hard copies of my presentation, so hopefully this will be put on the internet later and you can view those slides if you like. But I had three presentations on three different topics in the past couple of weeks, so I have been running from one meeting to another trying to complete those. So again I apologize for that.
Again let me thank the organizers for inviting me. I do represent the Animal Health Institute. We are the major pioneer company association in the United States. There is one other association that represents small biological manufacturers, but by and large we are the ones that represent the industry at large. We now have 13 full members of AHI. However, two of those companies are really biological manufacturers only. So in fact we have 11 pharmaceutical companies that manufacture animal drugs. This is quite a decrease from previous years. When I got to AHI about eight years ago we had more than 20 companies. So you can see the consolidation that has occurred in the animal health business in the United States, due in large part to development costs, approval costs, and marketing costs. They have all gone up, and I think as Dr. Clayton said, we are not loaded with money in the animal health industry, so it is very difficult to produce products that do make a fairly good return on investment.
AHI members have always recognized the need to stimulate the availability of minor use drugs. We have been participating over the years. In fact, I was at FDA a number of years ago, and at that time AHI members were then participating with the then IR-4 Program, which has now become the NRSP Program, in developing minor use products. Mainly extensions of label. In other words, products were approved for major species and with some minor adjustments and additional efficacy and safety data, we were able to add some minor species claims to those labels. So that has been an ongoing effort by some of the pioneer companies.
Under the new legislation, which I will focus my comments mainly on today, I think the AHI members would be more interested probably in the minor use category at this point, rather than minor species. I think both AHI and CVM have recognized in the beginning that the major pharmaceutical companies, as Dr. Clayton mentioned, don’t have a major interest in minor species because of the cost involved, but certainly minor uses could be of great importance if there are some reductions and flexibility on data requirements.
We were a member of the MUMS coalition, which represented a number of producers in Washington, DC and other parts of the country. So we strongly supported the passage of this legislation, and we are very happy that it has finally gotten through Congress.
Let me give a little historical note. In 2003 and 2004, we had two major pieces of legislation affecting the animal health industry. Actually, if you go back to 1996 as Dr. Beaulieu mentioned this morning, with the Animal Drug Available Act, there are really three major pieces of legislation in the last eight years that has affected the animal health industry in the US. The Animal Drug User Fee Act, which was passed in 2003, is intended to provide to the additional funding to the agency to try to improve the review process and get more products on the market. We think this is obviously going to have major impact on major species, and that is what it was really intended to do. So hopefully as that bill, as that Act gets enacted and implemented by the agency we will see improvements. Then there is the Minor Use and Minor Species Act, which was passed in 2004. As I said, that really is two to three pieces of major legislation over the last eight years, and we really hope that that will have a net effect of really improving the availability of new products. We are concerned, however though, because with the advent of all this legislation we have actually seen a decrease in the number of new products coming into the agency and an overall decrease in applications. Certainly the bills people are getting under the ADUFA legislation for their application fees is reflecting that.
There are three technical sections to just take a moment to review that. Three major technical sections that go into the approval of an NADA, of a new animal drug application. Efficacy; safety, including animal, human, and environmental safety, and I would also add user safety to that; and manufacturing. I would say those are the three main components. There are obviously other requirements such as labeling, freedom of information summaries which are a summary of the safety and efficacy data that is required.
I wouldn’t be representing my industry if I didn’t put up some cost figures to give you an idea of what it does cost to get one of these major species products on the market, a new product. For food animals, this is a survey of AHI members that we did a couple of years ago, and for cattle we estimate that it can cost in excess of $50-million, depending on whether you are talking about feedlot cattle, beef cattle, or dairy cattle. Dairy cattle adds another dimension to the cost, so dairy cattle applications could run well over $50-million. Swine, about $35-million, chickens about $15-million. Obviously the costs involved with doing studies in chickens is far less than doing studies in cattle, which are obviously more valuable. Non-food animals, it is amazing. That figure is actually on the low side for some compounds. The $10-million to $20-million is an estimate, and that actually -- that number as you can see is approaching the cost now of some food animal products. The time to approval is key, which should hopefully be affected by the User Fee Act as well as maybe MUMS with regard to minor species, five to 10 years. So it is a laborious, time-consuming, rather expensive process, considering the returns are nowhere near what they see on the human side.
I will break down taking those overall numbers. I want to give you an idea of some broad ranges of costs with regard to the individual technical sections that I just mentioned. Human food safety, again these are estimates of our AHI members. They are not hard and fast, but they give you an idea of general cost. $8-million to $10-million for human food safety; manufacturing, $4-million to $10-million. Keep that figure in mind, because that is kind of important with regard to minor use. Safety and efficacy, it can approach $14-million to $18-million. Again, broad ranges, it doesn’t always cost that much for every application. Certainly supplements, extensions of label don’t cost nearly that much either.
This is another way of looking at the cost. Now these percentages don’t necessarily line up with the previous slide, because for one thing human safety, animal safety, and user safety is all combined in that. But this was one case study that one of members gave us on a particular product that they took through the system, and this was their estimate for what the breakdown in costs were for those various sections. The reason I present this slide is to look at the efficacy data right there. That is about 31 percent or a third of the cost of the registration. That is important because in one of the MUMS provisions, the conditional approval, it tends to affect the efficacy requirements mainly. Well, you are not going to save anything overall on that efficacy data, but you may save some up-front costs on conditional approval. So it is another way of looking at the overall costs of getting a product on the market.
Let me turn to the major provisions of MUMS, and Dr. Beaulieu covered these in some detail this morning. Conditional approvals, indexing of unapproved new animal drugs, and designated new animal drugs. Now I won’t say too much about designating drugs, although to mention it is very important how the agency does designate drugs, particularly from our perspective and how they designate minor use drugs. So it would be important for us, to the industry at large, both the major producers and minor producers, to have input on that designation process.
The grant aspect of this we think is terrific. We hope the money is appropriated and that the companies that are in this business, particularly the niche market companies, the ones that really need the grant money, are eligible to receive it. I don’t think many of our major pharmaceutical companies would by and large be eligible or involved in that grant process.
Conditional approvals, now some of the limitations on conditional approvals. This cannot be a supplement to the currently-approved drug, and as I said earlier, we have been participating with the NRSP-7 program for quite a while. Whereas supplements or label extensions to currently-approved drugs have been a major way to get minor species approval uses on the market. One of the reasons is it doesn’t cost nearly as much when you don’t have to create a new product and a new label. You can use the existing database. A conditional approval also requires a separate label with the conditionally-approved statement. That is a relatively big issue, because separate labels -- I think Dr. Clayton mentioned this -- can be extremely expensive to produce. A separate label may require a separate trade name, and therefore, you know, you go through all the process of registering a trade name, which has costs involved.
All the technical sections on the conditional approval must be submitted, except the efficacy. So in other words, you have to really complete the whole application other than some of the final clinical studies. A conditional approval does require some efficacy data. So you don’t, you know, completely get out of efficacy data. You may not have to submit the final clinical studies, but you certainly do have to determine the dose, which I would raise as a question to CVM.
Back in the 1998 review of what could be done under minor use, it was stated by CVM I think in that discussion document that food animal products would not be eligible under conditional approvals for the main reason that you really need to know what the dose is before you can start the safety testing, but the toxicological, and residue testing. So you pretty much will have had to do most of the efficacy work. I don’t see too much of a mention in the law that it wouldn’t apply to food animals, so I simply pose this as a question that might be answered in the discussion later on. Would conditional approvals apply to food animal drugs?
A comparison between conditional approvals and the current supplemental process that we have been operating under, conditional as I mentioned, requires full information except efficacy, and I put in quotes because it will require some efficacy, but not all efficacy. A separate label, and a one- to five-year approval with a review of that approval after -- throughout the period of time it is conditionally approved. A supplement on the other hand, safety and efficacy data is only required, and that is the NRSP-7 program. Or if a company wants to do their own supplement to an approved application, so it doesn’t require manufacturing. It doesn’t require a lot of the other information that might be associated with a new product. Certainly not a new label, a modified label. The other thing with a supplement, you have one label and one product line. If you have a conditional approval, you have one label for the major species and a separate label for only the minor species the way we read the law. Again, there is a cost to that, having that separate label along with a separate trade name. This is of course a permanent approval versus a conditional approval. So it is sort of a comparison between what is proposed in the legislation now and what we are currently doing under the supplemental process. We certainly don’t think the law should interrupt the current supplemental process in any way. We would certainly hope that that wouldn’t replace what we are doing now, but just be an additional process.
Indexing, let me turn to that for a moment. Indexing of course is the products that have little likelihood for approval, and it would really be for niche markets: zoo animals, aquarium fish, wildlife species. The problem with indexing is that it does require meeting current good manufacturing practices. I will come back to that in a moment. It does require environment assessment. Now this could be a categorical exclusion, but it does require somebody to do it. Somebody to be on the staff of the company or whoever is submitting that application to actually put in that environmental assessment of that categoric exclusion and justify it. Also user safety, and a separate label, not approved by FDA. Again, we get into that label issue. That could be a cost. Records and reports, which is a followup, essentially pharmaco-vigilance information and followup on manufacturing. So indexing, while it is a very good way to go I think with a number of these niche products, it does require a sponsor, and that could be an obstacle in getting a sponsor, because only a sponsor -- a group of veterinarians can certainly come together and decide on what works in a certain animal species, but they can’t -- they don’t really have the technical expertise to carry this to market with all the technical knowledge that would be needed.
A comparison of indexing versus current policy, because I wanted to look at how indexing might affect the current way FDA handles some of these minor uses or minor species products. Under indexing, as I mentioned, CGMPs are required, good manufacturing practices. Pretty much a requirement for a sponsor to be involved, and one question I would have is does it apply to approved drugs with other indications. The law would seem to indicate that it only applies to unapproved drugs, but does this mean that you could actually index an approved drug and have a separate part of that label that says not approved by FDA. I think it is another question that CVM might be able to answer at the discussion or might be able to think about in the development of future regulations.
Under the current policy, there is legal extra-label use, and that opens up a wide variety of drugs to the veterinarian to use. Certainly it doesn’t apply to lay use products, because only veterinarians can use drugs extra-label under the AMDUCA legislation which was passed a number of years ago allowing legal extra-label use. There is also this thing called FDA regulatory discretion, which is a listing of a number of unapproved compounds which FDA declares are new animal drugs, but also declares are low priority for regulatory action. So we wonder how the indexing really will fit in with what is currently going on, and does indexing essentially override this right-handed policy that has been operating? If it does, then it seems to
us that you are going to have a lot more expense with indexing than you do under the current process.
My message today is that the major limitations in MUMS, talking to a number of people in the industry, particularly companies that are in the business of these minor species products, as in real estate, location, location, location. With minor species it is manufacturing, manufacturing, manufacturing, and I will go into why I see that as the case. (Slide.)
As I mentioned, the cost of compliance with GMPs we estimated to be $4-million to $8-million pre-approval. Post-approval, there are some costs for post-approval, too, and we estimate those to be about $50,000 to $100,000 because you have to do stability studies. You have to put at least one lot per year on study. Annual reports are required to be submitted, and drug experience reports as well. So cost of compliance with GMPs can be substantial, and the law is very specific that GMPs will be required to met. You can’t just partially meet GMPs. You have to meet them or you don’t meet them. So we see that as a concern.
On the other side, again these are estimates from some smaller companies that we have talked to. For wildlife drugs, the market may be less than 500,000 a year. Aquaculture, for example a fish anesthetic, less than 300,000 a year, and who know what zoo animals are coming back with on sales. So, you know, do these returns justify the expense? I don’t know. I think the manufacturing again is a concern. If CGMPs have to be met, you’ve got a substantial cost there for a new product. If it is a supplement to a product, it is another situation.
Another issue we thought about is illegal compounding. This is a big concern today. I know
Dr. Sundlof is very concerned about it, and is taking action against illegal compounders. This not to be confused with legal compounding, which can be done now legally under the law with existing products. This is taking bulk product, illegally obtained bulk product, and manufacturing essentially generic illegal copies of existing products. FDA because of resources, and I know they are trying their best, and we have been supporting them all the way, are trying to take action against these illegal compounders, but it is very rampant out there. If we have an index list of products, how is FDA going to keep all those illegal compounders from simply looking at the index list of products and just immediately copying and selling it for a whole lot cheaper than what the sponsor was required to do putting the product on the market under the legal index or conditional approval process. So we have a concern about that.
Liabilities issues, I don’t know if this is a big issue, but is there any problem for a company we don’t know? A product that is labeled not approved by FDA, if it doesn’t work for a particular rare species, important species, you know, can the company be liable for that since it is not approved by FDA?
I will get to my conclusions. I have about five minutes left. We think conditional approvals have benefits, but they are limited because the cost of development and marketing of separate products only for minor species appears to be an obstacle. Now maybe, you know, we are not reading that right, but it certainly would appear that that is a significant cost when you have to have a separate product and separate label.
Limited cost savings compared to a full application or supplemental application. I think FDA, CVM admits that there is no difference in overall costs for getting a conditional approval. It is just the timing of when that cost is accrued, and certainly there could be some savings there.
With indexing there are several advantages, particularly if applicable to approved new animal drugs, and again that is a question I would pose to FDA. Could we index existing products and change supplemental or extend their label under the indexing? Maybe, maybe not, I am not sure how that is going to be interpreted. Again, indexed chemicals may face competition from compounds that are widely available as raw chemicals as well as the drug compounding issues. So I think indexing is a great idea. We really think FDA has done a great thing in proposing this, but there are some questions about it.
Again, CGMP and records and reports, this would appear to place the drug at a significant cost disadvantage to some of this competition out there. So again, questions that I think need to be addressed in the discussion.
Final remarks. We are pleased that this legislation got past. We are very happy that there have been steps made to try to improve the availability of both major and minor species. Certainly conditional approval and indexing has the potential to improve availability. We look to the minor uses of major species as maybe a real benefit to our companies in this law. However, we do think that in the regulation writing phase, CVM does need to address some of these apparent obstacles. As I mentioned, the cost of the GMPs, the cost of a separate label. I mean, these are significant items with regard to the return on investment that may be gained. We do encourage flexibility in developing those future regulations, and we would hope that as CVM FDA develop regulations, they would give a lot of time for public input each step of the way, and not just go back and develop the regulations in a vacuum. Because I think even though the law says certain things, I am sure that regulations can be written to accommodate some of the concerns that might arise with a strict interpretation of that law. We will certainly cooperate to the extent feasible. We would probably submit comments to any of those regulations, and we will continue to work with the NRSP-7 as the need arises. So I thank you for the invitation. I thank you for allowing me to make those comments, and I know it is time for a break. Thank you.
DR. GRIFFITH: We have a break now. Alistair, are there --
VOICE: There are chicken wings out there.
DR. GRIFFITH: Chicken wings out there. No corn dogs today.
(Whereupon, a break was taken.)