Sign in Subscribe
Pharmaceutical industry

Enhancing Transparency and Efficiency in Pharmaceutical Regulation

Strategic Insights

— 2 min read

At the US Food and Drug Law Institute conference, Jeffrey Reidler emphasized the importance of transparency in corporate disclosure, particularly in light of the Sarbanes-Oxley Act, which has led to new rules on internal controls and auditor independence. Despite concerns about the transparency of drug company disclosure, Reidler noted that firms are now publicizing more about the drug development process, including preliminary trial results. However, companies must ensure that this information is properly contextualized to avoid misinterpretation.

To this end, the FDA and SEC have formed an agreement to refine and modernize procedures, with mutual training of employees from both bodies. This partnership aims to enhance the efficiency and smooth operation of these processes. Furthermore, John Manthei of Latham & Watkins stresses that the pharmaceutical industry's concern about the FDA setting up shop at the SEC is unfounded, and that the new arrangement will lead to more coordination between the two agencies.

Investors and the public alike are seeking greater transparency and accuracy in the pharmaceutical industry's communications. The media plays a crucial role in reporting on the industry, and experts like Anna Matthews emphasize the importance of working with newspapers and providing context to issues.

However, according to Peter Pitts, associate commissioner for external relations at the FDA, there is still room for improvement in the industry's communications. Words must be used succinctly and appropriately, and the lack of words also conveys meaning. The agency and industry must work together to ensure accurate and timely information is shared with the public.

Marc Kaufman notes that the public trusts medicine but not its purveyors. The FDA is the most responsive agency to reporters, but changes in the political atmosphere could alter its reputation. Direct-to-consumer advertisements that mention a drug by name but do not disclose its action are also a source of concern.

Key Takeaways:

  • The Sarbanes-Oxley Act has led to new SEC rules on internal controls and auditor independence, emphasizing transparency in corporate disclosure.
  • The FDA and SEC have formed an agreement to refine and modernize procedures, with mutual training of employees from both bodies.
  • Companies must contextualize preliminary trial results to avoid misinterpretation, providing detailed information on their role in the process.
  • The pharmaceutical industry's concern about the FDA setting up shop at the SEC is unfounded.
  • The media plays a crucial role in reporting on the industry, and experts emphasize the importance of working with newspapers and providing context to issues.
  • Accurate and timely information is essential for investor confidence and public trust in the industry.
  • The FDA's Critical Path Initiative calls on the agency to enable product development and address cross-cutting scientific problems.
  • Sandra Kweder notes that the FDA has undertaken a multi-year approach to improve efficiency and effectiveness of drug development and review.
  • The agency is concerned not only about approved products but also the pipeline of products coming through R&D.
  • The FDA aims to reduce approval time for products to 12 months, with a priority review time of six months.

Statistics:

  • Around 75% of New Molecular Entity (NME) submissions are approved by the FDA.
  • The PDUFA has sped up the review process, but it remains inefficient.
  • Less than 20% of products make it to submission, with a high failure rate before an Investigational Drug Application (IDA).
  • The FDA aims to reduce approval time for products to 12 months.
  • Around 75% of NMEs are approved by the FDA on the first round.

Sources:

  • Marketletter (US Food and Drug Law Institute conference)
  • Marketletter, "FDA and SEC to Streamline Procedures: Panel" (March 29, 2023)
  • Marketletter, "FDA/SEC Activities" (February 16)
  • Wall Street Journal, "FDA's Public Health Mission" (Anna Matthews)
  • Washington Post, "Pharmaceutical Firms Get More Positive Press Coverage" (Marc Kaufman)
  • Latham & Watkins (John Manthei)

Read more