Pharmaceutical Competitive Intelligence For The Regulatory Affairs Professional (2012) PDF

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Science & Drug Development
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Raymond A. Huml
Pharmaceutical Competitive
Intelligence for the Regulatory
Affairs Professional
Raymond A. Huml
Quintiles Transnational Corporation
Durham, NC, USA
ISSN 1864-8118 ISSN 1864-8126 (electronic)

ISBN 978-1-4614-3681-2 ISBN 978-1-4614-3682-9 (eBook)
DOI 10.1007/978-1-4614-3682-9
Springer New York Heidelberg Dordrecht London
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Foreword
It is a great privilege and honor to have been asked by Dr. Huml to write the foreword
to this publication.
Ray Huml and I originally met 10 years ago, when we were both tapped to assist
PharmaBio Development, Quintiles’ new venture capital arm established in 2001,1 as
members of its due diligence teams evaluating potential partnership investments.
Ray, a well-respected North Carolina veterinarian and certified regulatory authority,
provided the due diligence teams with his regulatory and toxicologic expertise, while
I was charged with contributing medical and scientific knowledge and experience.
Ray and I both discovered a shared love for the excitement and challenge of the
due diligence process, jointly participating in the placement of over half a billion
dollars in private equity capital over the course of my half decade with Quintiles.
Also, during the past 10 years we have collaborated on numerous articles and a
book detailing the processes we helped develop for PharmaBio-methods specific to
the successful evaluation and funding of pharmaceutical and medical device invest-
ment opportunities.
There is a famous scene in the 1991 movie, “City Slickers,” wherein Jack
Palance, playing Curly Washburn, an experienced, wizened old cowhand, explains
to Mitch Robbins, the young city slicker, played by Billy Crystal, that the secret of
life is “just one thing.” When Mitch excitedly inquires, “What’s the one thing?”
Curly responds with a wry smile, “That’s what you’ve got to figure out.”
Having made the transition to full-time private equity funding work for Quintiles,
Ray has found his true calling—his “one thing.” The fit is absolutely perfect, and
Ray has shone in this role, becoming one of the most accomplished venture capital
experts I have ever met. Now one of Quintiles’ finest due diligence team leaders, he
demonstrates uncanny scientific, clinical, regulatory, financial, commercial, and
1
PharmaBio was subsequently rebranded NovaQuest, but ultimately evolved into its current,
Quintiles Capital Solutions, entity, and separated from NovaQuest, which spun off as a separate
venture capital fund, NovaQuest Capital Management, LLC.
v
vi Foreword
legal judgment, combined with inspiring leadership skills, and impeccable, unwav-
ering ethical sensibilities—an extraordinarily rare combination in the private equity
funding arena.
Even more remarkable, functioning with high energy in an extremely competi-
tive domain where many sacrifice their personal lives in pursuit of career success,
Ray manages successfully to assign equal priority to his role as loving husband and
devoted father, participating fully in the lives of his two remarkably accomplished,
yet incredibly centered and well-balanced, children.
Yet, with all that, he still finds time to provide advice, encouragement, and moral
support to his friends. On this topic I speak from experience.
Finally, I would like to take this opportunity to acknowledge Dr. Dennis Gillings,
founder, Chairman of Quintiles, for his remarkable prescience in creating PharmaBio/
Quintiles Capital Solutions. Through its unique private equity partnership invest-
ment model, Quintiles alone amongst its peers offers many promising, innovative
companies in need of financial support an alternative to traditional private equity
funding models, which force recipients to relinquish equity and control in return for
development capital. Each partnership deal focuses on collaboration rather than
control, melding Quintiles’ financial resources and enormous pharmaceutical, bio-
logic, device development and commercialization experience with its unparalleled
operational expertise to custom craft a win–win solution wherein its partner achieves
maximum value from its intellectual property while Quintiles achieves consistent
long-term return on investment (ROI). Indeed, the values I acquired while at
Quintiles have informed my own subsequent career path choices.
With Dr. Gillings’ visionary long-term approach, Quintiles’ private equity divi-
sion has developed a unique playbook of pharma and device investment strategies.
This playbook combines innovative and thorough due diligence techniques (many
of which are detailed here in Dr. Huml’s treatise) crafted specifically for the phar-
maceutical and medical device industries with term sheets, customized for each
partnership, which seamlessly blend royalties, licensing revenue, and milestone
payments, among other repayment options, with capital investment, loan guaran-
tees, CRO/CSO (contract sales force), and regulatory and management consulting
services. Their “special sauce,” though, is the importance placed on post-deal part-
nership alliance management, an extremely important, but oft neglected, compo-
nent of successful pharma/device deals. The end result is a remarkable and enviably
consistent “hit rate,” with impressive long-term ROI.
With thoughtful study of the principles enumerated here by Dr. Huml, anyone
involved in pharmaceutical, biologic, or medical device development funding, either
as provider of resources or as recipient, can markedly improve his success rate.
Morrisville, NC, USA Ross M. Tonkens

Acknowledgments
I would like to express my gratitude to Dr. Dennis Gillings, CBE, and Chairman of
Quintiles Transnational Corporation; Tom Perkins, Executive Vice President of
Quintiles Corporate Development; and Dr. Michael Arlotto, Senior Vice President
of Quintiles Corporate Development for the opportunity to serve as a due diligence
project leader and, in various roles and capacities, helping evaluate every major
executed transaction from PharmaBio’s inception through its evolution into
Quintiles Capital Solutions, a process spanning over 10 years.
This brief benefits from an ever-evolving, output-driven due diligence process
that has at its core competitive intelligence that resulted in commitment of more
than $2.7 billion in capital to various large and small product partnering opportuni-
ties in the USA and Europe.
In addition, I would like to thank my friends Dr. Rick Turner, Senior Director of
Integrated and Translational Cardiovascular Safety at Quintiles, for his introduction
to Springer and coauthoring several papers cited in this brief; Allen Baum, patent
attorney at Brinks Hofer Gilson and Lione, who helped me understand some of the
challenges associated with patent expiration and regulatory exclusivity and also
coauthored several papers cited in this brief; Peter Kim, Senior Director of
Commercial Due Diligence at Quintiles and a master at forecasting product-based
sales; and Dr. Ross Tonkens, Director of the Science and Technology Acceleration
Division at the American Heart Association and former Global Head of the
Cardiovascular Therapeutics Division at Quintiles for encouraging me to publish
and for providing me with true mentorship over the last decade. I would also like to
thank the Regulatory Affairs Professionals Society who supported previous publica-
tions on topics related to the process of due diligence. Finally, I would like to thank
Dr. Jill Dawson, a consultant to Quintiles Corporate Communications, for her edito-
rial assistance with this brief.
It is hoped that this brief will provide the Springer reader with a broad enough
overview of the due diligence processes to understand how to find and interpret
competitive intelligence to offer input to upper management pharmaceutical strate-
gic and investment decisions.
vii
Contents
1 Introduction to Competitive Intelligence ............................................... 1

1 Definition ............................................................................................. 1
2 Introduction: Why Perform CI? ........................................................... 2
Reference ............................................................................................. 3
3 Regulatory Guidance, Advisory Committee Meetings,
and Case Examples .............................................................................. 3
3.1 Regulatory Guidance .................................................................. 3
3.2 Advisory Committee Meetings ................................................... 4
4 Case Examples ..................................................................................... 5
4.1 Case Example I: Cardiovascular Risk......................................... 5
4.1.1 Introduction ................................................................... 5
4.1.2 QT Prolongation as a Cardiac Safety Biomarker .......... 7
4.1.3 Regulatory History of Formalized Cardiac
Safety Assessment ......................................................... 7
4.1.4 Regulatory History of Formalized Cardiovascular
Safety Assessment for Antidiabetic Drugs for T2DM... 10
4.1.5 FDA’s December 2008 Guidance for Industry .............. 12
4.1.6 Continued Discussion in the Literature of the
Cardiovascular Safety of Avandia and Actos ................ 13
4.1.7 July 2010 FDA Advisory Committees’ Meeting
on Avandia ..................................................................... 14
4.1.8 EMA’s January 2010 Draft Guidance............................ 14
4.1.9 Potential Ramifications for Future Global
Development of Antidiabetic Drugs for T2DM ............ 14
4.1.10 Summary ....................................................................... 15
References ............................................................................................ 15
4.2 Case Example II: Patient-Centric Services ................................. 16
4.2.1 Introduction ................................................................... 16
4.2.2 Privacy Challenges of Launching an Integrated
PCS Platform ................................................................. 19
ix
x Contents
4.2.3 Remote Patient Monitoring ........................................... 20

4.2.4 Regulatory Implications and Challenges ...................... 20
4.2.5 HIPAA ........................................................................... 21
4.2.6 HITECH ........................................................................ 21
4.2.7 Social Media and HIPAA .............................................. 22
4.2.8 510(k) Classification ..................................................... 22
4.2.9 Health and Wellness Programs ...................................... 23
4.2.10 REMS Programs............................................................ 23
4.2.11 Latest FDA Regulations for Mobile
Medical Applications..................................................... 24
4.2.12 Regulatory Overlap ....................................................... 25
4.2.13 Summary ....................................................................... 26
References ............................................................................................ 26
4.3 Case Example III: Biosimilars .................................................... 26
4.3.1 EU Biosimilar Status ..................................................... 27
4.3.2 Approved Biosimilars in the EU ................................... 28
4.3.3 Status of FOBs in America ............................................ 29
4.3.4 Interchangeability .......................................................... 30
4.3.5 Exclusivity..................................................................... 30
4.3.6 Approved Biosimilars in the USA................................. 31
4.3.7 Summary ....................................................................... 32
4.3.8 Chemistry, Manufacturing & Controls (CMC)
Concerns for Biosimilars ............................................... 32
4.3.9 Efficacy Comparisons, Preclinical Safety,
Pharmacokinetics, and Clinical Studies
for Biosimilars ............................................................... 35
4.3.10 Summary ....................................................................... 37
References ............................................................................................ 37
2 Overall Perspective of Due Diligence
Investigations and Processes ................................................................... 39
1 Experience of Risk-Based Transactions............................................... 39
2 The Process of Due Diligence.............................................................. 40
3 Outcomes of Due Diligence ................................................................. 41
Reference ............................................................................................. 41
3 The Regulatory Functional Review: Primary Roles ............................. 43
1 Introduction .......................................................................................... 43
2 Transaction Types ................................................................................ 44
3 Time Commitment ............................................................................... 44
Reference ............................................................................................. 44
4 Output and Expectations ...................................................................... 44
Contents xi
4 The On-Site Due Diligence/Data Room Meeting

and Interactions with Other Functional Area Experts ......................... 47
1 Preparation ......................................................................................... 47
2 The Virtual Data Room ...................................................................... 49
2.1 Types of Electronic Databases .................................................. 49
2.2 Internet-Based Data Rooms ...................................................... 50
2.3 Advantages ................................................................................ 50
2.4 Potential Disadvantages of VDRs ............................................. 51
3 Summary ............................................................................................ 52
Reference ........................................................................................... 53
4 The On-Site Data Room Meeting ...................................................... 53
5 Requests of the Potential Partner ....................................................... 54
6 FDA Correspondence ......................................................................... 54
7 Preclinical Information ...................................................................... 55
Reference ........................................................................................... 55
8 Chemistry Manufacturing Controls Information ............................... 55
9 Clinical Information ........................................................................... 56
10 Commercial Information.................................................................... 57
11 Secondary Research ........................................................................... 60
12 Primary Market Research .................................................................. 61
5 Intellectual Property ................................................................................ 65
1 Introduction ........................................................................................ 65
2 Patent Exclusivity .............................................................................. 66
3 The IP Due Diligence Process............................................................ 67
4 Initial Due Diligence and Role of the Regulatory
Affairs Professional............................................................................ 69
5 Role of the Patent Attorney ................................................................ 69
6 Role of the Chemistry Manufacturing Controls Expert ..................... 70
7 Contractual Protection ....................................................................... 70
8 Regulatory Exclusivity: The US Drug Price
Competition and Patent Restoration Act ............................................ 70
9 Case Study ......................................................................................... 73
10 Summary ............................................................................................ 74
References .......................................................................................... 74
6 The Final Report ...................................................................................... 75
Reference ........................................................................................... 75
7 Competitive Intelligence Summary ........................................................ 77
About the Author ........................................................................................... 79
Index ................................................................................................................ 81
Abbreviations
AACR American Association for Cancer Research

AEs Adverse events
AM Alliance manager
ANDA Abbreviated new drug application (for generics)
API Active pharmaceutical ingredient
ASCO American Society of Clinical Oncology
BBB Blood–brain barrier
BD Business development (or business developer)
BID bis in die (Latin for “twice a day”)
BMJ British Medical Journal
CAC FDA’s Carcinogenicity Assessment Committee
CD Circular dichromism
CDA Confidentiality agreement
CE Capillary electrophoresis
cGMP Current good manufacturing practice
CI Competitive intelligence
CMC Chemistry, manufacturing, and controls
COM Composition of matter
CRO Contract research organization
CSO Contract sales organization
CTA Clinical trial application
CTD Common technical document
DD Due diligence
DEA US Drug Enforcement Administration
DMF Drug master file
DP Drug product
DS Drug substance
xiii
xiv Abbreviations
ED50 Median effective dose

EMA European Medicines Agency
ESMO European Society for Medical Oncology
EOP2 End of Phase 2 (meeting with FDA)
FDA US Food and Drug Administration
FD&C Act Federal Food, Drug and Cosmetic Act
FOB Follow-on biologic
FOP Follow-on protein
FTO Freedom to operate
GAAP Generally accepted accounting practice
GLP Good laboratory practice
GMP Good manufacturing practice
IB Investigator brochure
ICH International Conference on Harmonization
IEF Isoelectric focusing
IND Investigational new drug application
IMS Intercontinental marketing services
IP Intellectual property
IPO Initial public offering
KOL Key opinion leader
LCMS Liquid chromatography/mass spectrometry
M&A Mergers and acquisitions
MD Medical doctor (physician) qualification
MHRA Medicines and Healthcare products Regulatory Agency (UK)
MOA Mechanism of action
MoU Method-of-use
NCE New chemical entity
NDA New drug application (USA)
NEJM New England Journal of Medicine
NMR Nuclear magnetic resonance
NOAEL No observable adverse effect level
NOEL No observable effect level
NPV Net present value
OAB Over active bladder
OPDP FDA’s Office of Prescription Drug Promotion
OS Overall survival
PA Patent attorney
PAGE Polyacrylamide gel electrophoresis
P&L Profit and loss (income)
PCS Patient-centric services
Abbreviations xv
PDF Portable Document Format

PDR Physician’s Desk Reference (contains US prescription drug label
information)
PK Pharmacokinetic
PMA Premarket approval
Pre-IND Before the investigational new drug application stage of clinical drug
development
PoC Proof of concept
PoS Probability of success
QD quaque die (Latin for “every day”)
QID quarter in die (Latin for “four times a day”)
R&D Research and development
RAPS Regulatory Affairs Professionals Society
RR Response rate
ROI Return on investment
RoW Rest of world
SAE Serious adverse event
SAS Trademark for Statistical Analytical Software
SBA Summary basis of approval (older term for FDA’s “approval
history”)
USPTO US Patent Office
UV Ultraviolet spectroscopy
VDR Virtual data room
Chapter 1
Introduction to Competitive Intelligence
1 Definition
Pharmaceutical competitive intelligence (CI) entails defining, gathering, analyzing,

and distributing intelligence—both non-proprietary and proprietary—on pharma-
ceutical products, customers, competitors, and any aspect of a particular functional
area needed to support executives and managers in making strategic decisions for an
organization (e.g., an expected return on investment or strategies based on the loss
of patent protection). It is intimately tied to the processes involved in due diligence,
and, for that reason, an overview of the processes of due diligence for product-based
investments will be used as a platform to determine the elements of CI that are criti-
cal for upper management when making investment or strategic decisions.
Pharmaceutical products, for purposes of this brief, are drugs, devices, or biolog-
ics. Customers are varied and include pharmaceutical companies, contract research
organizations (CROs), pharmaceutical manufacturers, and those associated with the
supply chain, investors, patients, health payers, and government organizations.
Although typically thought of as being driven by other sponsors, competition may
also be affected by regulations (including product-based labeling), lack of regulations
[e.g., lack of Guidance from Food and Drug Administration (FDA)’s Office of
Prescription Drug Promotion (OPDP) regarding Social Media] or long-awaited draft
(FDA guidance for biosimilars, finally issued in February 2012), politics (e.g., contro-
versy around medical cannabis-derived products), accounting principles (e.g., general
accepted accounting practice (GAAP), geographies [International Conference on
Harmonization (ICH) vs. non-ICH], patent protection, and regulatory exclusivity).
Publically available information is obtained via the World Wide Web and may be
accessed for free, such as information contained on a competitor’s Web site, or avail-
able for a cost (e.g., fee to print a full-text article or IMS health data to track pharma-
ceutical sales). It is typically limited by the savvy of the investigator, by the amount
of time that the investigator has to compile the information, and by the investigator’s
access to company-wide databases. Large companies typically have an advantage
over smaller companies in gathering CI due to their scale and resource availability.
R.A. Huml, Pharmaceutical Competitive Intelligence for the Regulatory 1

Affairs Professional, SpringerBriefs in Pharmaceutical Science & Drug Development,
DOI 10.1007/978-1-4614-3682-9_1, © Springer Science+Business Media New York 2012
2 1 Introduction to Competitive Intelligence
Proprietary information is exchanged only after a Confidential Disclosure

Agreement (CDA) has been executed. This is of critical importance to protect both
parties and should be executed promptly, usually under the direction of a company’s
legal department/counsel.
Environments where CI can be utilized range from simple, single-product trans-
actions between a buyer and a seller to more sophisticated global acquisitions of
multiple products or even mergers. The simplest transaction may require only one
person; more sophisticated partnering opportunities or acquisitions may require a
team of experts with a range of disciplines. Due diligence proceeds with this team
of experts to assess corporate strategy, research and development, intellectual prop-
erty, human resources, and financial dealings, identifying the strong points and
weak points of a company, a product (or products), or even a potential deal in order
to better manage risk.
A key caveat to this entire process is that the gathered information must be con-
verted into intelligence and then utilized for business decision making. In essence,
if the CI gathered is not usable (or actionable) then it is not intelligence. For exam-
ple, due diligence is always conducted within the boundaries of CI, adjusting the
primary outputs of due diligence—typically the probability of success (e.g., regis-
tration) or a sales forecast (especially if returns are expected from sales royalties)—
as needed, to take into account competition and the most likely future trends based
on those expectations.
2 Introduction: Why Perform CI?
The key reason for obtaining CI is that it makes the organization more competitive
relative to its entire environment. This includes all stakeholders, such as investors,
customers, competitors, and suppliers to the pharmaceutical sector [e.g., CROs, con-
tract sales organizations (CSOs), and contract manufacturers and supply chain firms].
In essence, the more you know, the better off you are—up to a limit. As stated
earlier, if CI cannot be used for decision making, it is not CI. Therefore, CI, at its
core, is about managing risk, taking into account the most likely scenarios and plan-
ning for the best and worst cases along the drug development pathway. It may lead
to a go/no-go decision early in clinical drug development. For example, a “me-too”
drug in Phase 1 development may be halted because its class of approved products
is removed from the market due to an infrequent, but deadly, cardiovascular risk.
Another example is a drug in Phase 2 that adds quality of life measurements to its
the new protocol to better compete with an approved product in the same class that
lacks this information.
Competitive intelligence may require the answer to a simple question (how is my
product differentiated?) or it may require an investigation of a partner’s financial
status and product quality, efficacy, and safety with respect to an expected business
transaction. At its finest, product-based due diligence uncovers and identifies all of
the positive, negative, and unknown attributes of a product and makes marketing
3 Regulatory Guidance, Advisory Committee Meetings, and Case Examples 3
projections based on the most likely label within the context of the expected
competition. But this is only one part of the entire CI landscape and it is also pos-
sible to manage risk through contractual protection. CI about a company’s financial
status may lead to better negotiation leverage or sway the deal team towards a more
equitable position.
Some of the more common reasons that regulatory professionals may need to
conduct CI are to optimize clinical trials in order to position a pharmaceutical, bio-
logic, or device product better than the competition, get to market faster with fewer
resources, make a go/no-go decision earlier in the drug development cycle, perform
M&A, or enter into a risk-based transaction.
An integral part of the CI process—but one that is not specifically tied to particular
partnering arrangement, or a “product” (such as a small molecule, biologic, or device),
services, or even a “deal on the table” (for a portfolio of products)—is that tied to
monitoring the regulatory atmosphere. This is predominantly related to the impact of
new guidance—or just as importantly—lack of guidance from the agencies. Nuances
must be considered when the guidance issued is draft when compared with guidance
that is considered final, as the former is subject to change. Three recently published
case examples are provided to elucidate the process that the regulatory affairs profes-
sional must constantly go through to keep up-to-date regarding the regulatory land-
scape as well as the impact on potential deals. CI text is provided in italics in order to
illustrate the key take-aways during the thought process that helps the reader transi-
tion from just reading information into CI.
The author has the most experience regarding risk-based, product-based (single
assets or portfolios) transactions and this will be the format of the remainder of this
brief [1]; however, the principles elucidated in this brief can apply at any level of CI
that a pharmaceutical regulatory affairs professional may encounter.
Reference
1. Huml RA. Introduction to the Due Diligence Process, Copyright 2010, RAPS, ISBN: 0-9787006-
4-3; 126 pp.
3 Regulatory Guidance, Advisory Committee Meetings,

and Case Examples
3.1 Regulatory Guidance
New regulatory guidance can be very helpful as it provides a framework for drug
developers to follow and provides a medium with which to better predict the
response from the FDA to a clinical drug development issue. In general, final
guidance is better than draft guidance (because the latter is subject to change) and
lack of guidance leads to uncertainty, which can increase risk. For example, the
long-awaited draft FDA regulatory guidance on biosimilars that was finally issued
in February 2012 (or the absence of guidance for Social Media until December 2011
after over a decade of anticipation) has led US drug developers to use guidelines
established in Europe or start their biosimilars projects (for products nearing patent
expiration) in non-US countries. In some cases, even though guidance is issued and
further clarity is provided, it further increases risk. For example, new treatments for
antidiabetic drugs will now need to be further scrutinized for cardiovascular risk,
thus adding cost and increased time to drug approval for new or ongoing antidia-
betic drug development programs.
3.2 Advisory Committee Meetings
In lieu of guidance, one can also gain an understanding of regulatory thinking by

attending FDA Advisory Meetings. Due to the fact that most communication is non-
verbal, there is no substitute for attending a face-to-face meeting with the regulatory
agency to gain a greater awareness of Agency thinking. In general, outside of
confidential meetings between the Agency and sponsor (e.g., pre-IND, EOP2, pre-
NDA, Type A, B, and C meetings), the only way that regulatory professionals can
gain public access to real-time Agency thinking is to attend an FDA Advisory
Committee meeting.
FDA Advisory Committee meetings—while critical for scientific and regulatory
discussion regarding a particular compound—can, in certain cases, be applicable to
other drug classes or may provide a way to discern the clinical impact of a charac-
teristic that your product may also possess.
FDA Advisory Committee meetings (with additional details regarding topics,
products, and dates) are posted on the FDA Web site in advance. If you, as a regula-
tory affairs professional, cannot attend in person, you can gain access to certain
publically disclosed documents after the meeting. In the experience of the author,
however, the person responsible for posting the documents may not post all of the
handouts or may not post them in such a timeframe as to be useful to the person with
potential interest. Although historically not the case, it is now possible to purchase
videos of the conference, which does save the potential attendee the cost of travel,
but not time (since they are usually recorded over real-time and not edited). In the
experience of the author, the sound quality or video quality can be suboptimal and
the cost is usually greater than $500 per video of each meeting.
Once, when in the middle of negotiations with a the potential partner’s CEO
suggested that a FDA guideline could be circumvented and that the rule was not to
be taken “as gospel.” This was contrary to what a key FDA official had said at a FDA
Advisory Committee meeting that the author had attended the day before. While it is
true that guidance is not law, when the company pursued side-stepping the FDA rule,
the product failed to gain approval. It remains a truism for the author that FDA
advice should always be followed and that shareholder value will be diminished
when not following FDA guidelines.
4 Case Examples 5
4 Case Examples
The first case example takes into account new FDA guidance which describes new
mandates to protect diabetic patients against cardiovascular risk during drug devel-
opment and hints at the increased cost (and time) burden for those sponsors
developing new drugs for the treatment of diabetes. The second case example dis-
cusses the regulatory implications of technology platforms for patient-centric ser-
vices (PCS) when integrating behavioral solutions to increase patient compliance.
The third, and final example, while not meant to be exhaustive, provides an overview
of some of the implications of new draft FDA guidance regarding biosimilars, which
was issued as this publication was going to press.
4.1 Case Example I: Cardiovascular Risk
In 2011, the author published a paper highlighting and summarizing the key points
from the latest regulatory guidance related to cardiovascular risk [1, 2]. For purposes
of this brief, summaries—which turn the information from just regulatory-related
information into CI—are provided in italics.
4.1.1 Introduction
Cardiac and cardiovascular safety concerns continue to be leading reasons for drug
failures during development and marketing, and have led to product withdrawals.
Several high-profile marketing withdrawals involved drugs for non-life-threatening
diseases. For example, in 1998, terfenadine (Seldane), an antihistamine used for
allergies, was removed from the US market following deaths from a form of poly-
morphic ventricular tachycardia called torsades de pointes (TdP)—a French term,
which literally translated, means “twisting of the points” [see ref. 3 for extended
discussions]. In 2000, cisapride (Propulsid), a very effective and successful gastro-
prokinetic agent marketed by Janssen/Ortho for gastroesophageal reflux disease
(GERD), to speed gastric emptying while increasing esophageal sphincter tone, was
withdrawn from the market after a warning from the US FDA to prescribers regard-
ing the product’s propensity to prolong cardiac repolarization.
Regulatory concern over drug-induced TdP led to preclinical and clinical draft
guidance documents in 2002, which were finalized in 2005 with the publication of
the cornerstone International Conference on Harmonization (ICH) guidelines “S7B”
and“E14,” respectively. E14 is discussed later.
A third example is rofecoxib (Vioxx), a selective cyclooxygenase-2 (COX-2)
inhibitor used as an anti-inflammatory agent. Rofecoxib was voluntarily removed
from the worldwide market in 2004 following an interim analysis in a clinical trial
that found an increased risk of cardiovascular events in the rofecoxib treatment arm
Table 1.1 ICH, Health Canada, FDA, and EMA regulatory guidance: 2005–2010
Guidances
Date Title
May 2005 ICH Guideline ICH E14: Clinical Evaluation of QT/QTc Interval
Prolongation and Proarrhythmic Potential for Non-Antiarrhythmic Drugs
November 2006 Health Canada: Health Canada Question and Answer Document
Regarding the ICH S7B and E14 Guidances
June 2008 ICH E14 Implementation Group: Clinical Evaluation of QT/QTc Interval
Prolongation and Proarrhythmic Potential for Non-Antiarrhythmic
Drugs: Questions and Answers
December 2008 FDA Guidance for Industry: Diabetes Mellitus—Evaluating
Cardiovascular Risk in New Antidiabetic Therapies to Treat Type 2
Diabetes
January 2010 EMA: Guideline on Clinical Investigation of Medicinal Products in the
Treatment of Diabetes Mellitus [Draft]
compared with the placebo arm. Although allergies, GERD, and arthritis have major
impacts on quality of life, the risk/benefit assessment for the drugs cited became
unfavorable.
Competitive Intelligence Comments
• Cardiovascular risk is a concern for drugs in development as well as marketed

products and can be a differentiator when comparing products in similar classes
known to have a propensity for cardiovascular risk (e.g., appetite suppressants).
Another high-profile drug safety case study that is ongoing involves the marketed
agent rosiglitazone (Avandia), a thiazolidinedione used in the treatment of Type 2
diabetes mellitus (T2DM). These cardiac-related cases have led to heightened drug
safety awareness in general [4, 5]. This review of current regulatory landscapes for
cardiac and cardiovascular safety assessments provides an overview of the circum-
stances leading to the release of five key guidance documents by the ICH, FDA, and
European Medicines Agency (EMA) that address clinical cardiovascular safety
concerns and their global ramifications (see Table 1.1).
• When trying to understand the US regulatory landscape—especially when no

other guidance is available—it is useful to look at guidance issued by other ICH-
compliant countries. While not prescriptive, these other agencies respond to—
and are composed of—world renowned scientific experts who can sometimes
help elucidate issues that are faced in America. In essence, other regulatory
agencies can serve as potential surrogates.
4 Case Examples 7
4.1.2 QT Prolongation as a Cardiac Safety Biomarker
Each segment of the surface electrocardiogram (ECG) can be assigned a length in

the time domain. The QT interval represents the total time of cardiac muscle cell
depolarization (contraction) and repolarization (returning to the relaxed state such
that contraction can occur again). It is defined as the length in the time domain from
the onset of the Q-wave to the off-set of the T-wave, measured in milliseconds (ms).
Precise categorization of the normal QT interval for a given individual is impracti-
cal since it changes with every heartbeat. However, consideration of the typical
ranges observed in groups of individuals following a supine period is useful. Since
the QT interval is impacted by heart rate, tending to be shorter as heart rate increases,
it is typically corrected for heart rate by one or more of several mathematical formu-
lae, resulting in QTc data. In this context, the normal distribution of QTc intervals
for healthy adult males suggests a range from around 350 to 460 ms. For healthy
adult females, the distribution is similar but falls around a somewhat higher mean,
suggesting a range from around 360 to 470 ms. While imperfectly related to the
occurrence of TdP, QT prolongation has become a cardiac safety biomarker for a
drug’s potential to lead to TdP [6].
• The regulatory affairs professional should liaise with the physician to evaluate
all products for safety, including cardiovascular safety, with attention to QT
interval prolongation.
• Important questions to consider include: is the drug in a class that has demon-
strated a problem with QT interval prolongation (e.g., certain antibiotics)? If so,
was a thorough QT study conducted and what were the results?
4.1.3 Regulatory History of Formalized Cardiac

Safety Assessment
Between the late 1980s and the early 2000s, a series of high-profile drug marketing
withdrawals for cardiac reasons focused regulatory attention on cardiac safety
assessments. Many of the withdrawals involved TdP. Although TdP is a rare repo-
larization disruption, it can result in death. Several hundred deaths from widely
prescribed drugs for relatively benign conditions indicated that the risk/benefit
balance was clinically unacceptable. The first section of Table 1.2 provides a sample
list of drugs withdrawn from the market for proarrhythmic cardiac safety reasons in
the USA and the UK from the late 1980s to the mid-2000s. The second section lists
drugs removed from the market in the USA and the EU for generalized cardiac/
cardiovascular safety reasons.
The first regulatory publication issued as a result of ICH collaboration, entitled,
Safety Pharmacology Studies for Assessing the Potential for Delayed Repolarization
Table 1.2 Drug withdrawals for proarrhythmic and generalized cardiac and cardiovascular safety
concerns
Drug Indication Year withdrawn Major safety concern
Proarrhythmic cardiac safety concerns (UK, USA)
Terodinine Urinary incontinence 1991 (UK, USA) QTc prolongation, TdP
Sparfloxacin Antibiotic 1996 (USA) QTc prolongation
Sertindole Antipsychotic 1998 (UK) QTc prolongation,
TdP, sudden death
Terfenadine Antihistamine 1998 (USA) QTc prolongation, TdP
Astemizole Antihistamine 1999 (USA) QTc prolongation, TdP
Grepafloxacin Antibiotic 1999 (UK, USA) QTc prolongation,
cardiac arrhythmias
Cisapride Gastroesophageal 2000 (UK, USA) QTc prolongation,
reflux cardiac arrhythmias
Droperidol Schizophrenia 2001 (UK, USA) QTc prolongation, TdP
Levacetylmethadol Opiate addiction 2003 (UK) QTc prolongation, TdP,
cardiac arrest
Generalized cardiac safety concerns (EU, USA)
Fenfluramine Appetite suppressant 1997 (EU, USA) Valvular heart disease
Dexafenfluramine Appetite suppressant 1997 (EU, USA) Valvular heart disease
Amfepramone Obesity 2000 (EU) Primary pulmonary
arterial hypertension
Phenylpropanolamine Appetite suppressant 2000 (USA) Cerebral hemorrhage
Rofecoxib Arthritis 2004 (EU, USA) Increased cardiovascular
event risk
Source: adapted from [15]
(QT Interval Prolongation by Human Pharmaceuticals), focused on nonclinical sig-

nals and in vivo and in vitro models for determining whether QT prolongation could
be associated with the use of a drug under consideration.
• Preclinical signals are sometimes predictive of clinical signals to come later in

the drug development process. All products must be scrutinized to make sure that
they have been developed according to US guidelines, especially those studied in
non-US countries for potential development in the USA.
The document was released for Step 2 comment of the ICH process in the first
quarter of 2002 by the ICH Steering Committee and is also commonly referred to in
the pharmaceutical industry as the “S7B Step 2” document. The main objective of
the guidance was to protect clinical trial participants and patients receiving mar-
keted products from “delayed repolarization-associated ventricular tachycardia,
TdP, and lethal arrhythmia resulting from administration of pharmaceuticals.”
4 Case Examples 9
It provided a nonclinical testing strategy in the form of an algorithm to assess risk

and influenced the future course of drug development as a result of either positive
or negative cardiac signals from ionic current assays (such as IKr), isolated cardiac
muscle cell preparations, and results from in vivo/in vitro QT assessments. For the
first time, US sponsors of pharmaceutical drugs had objective guidelines that pro-
vided insight into FDA’s thinking regarding the nature of early studies and the
timing of repolarization studies in relation to clinical development.
• Products with significant QT prolongation signals may be abandoned and are

usually considered high risk for drug developers and investors.
• Extra costs (and extra risk) may be incurred due to the uncertainty of the outcome
of a clinical trial to assess the propensity of a drug to prolong the QT Interval.
• Products with a “clean” QT Interval study are deemed as less risk than those
that are deemed positive or not yet studied. This is important for drug developers
and investors.
In response to the drugs removed from the market for QT prolongation issues
between 1998 and 2000, FDA, in conjunction with the Pharmaceutical Research
and Manufacturers of America (PhRMA), formed a working group to address bio-
markers, like the QT interval, to assess cardiac safety prior to registration and
approval. In light of Health Canada’s publication of draft guidance in the first quar-
ter of 2001, this became a combined (US and Canadian) ICH effort (ICH E14). The
working group released a draft document, also known as the “preliminary concept
paper (PCP),” in the fourth quarter of 2002, which was the second formal guideline
issued by FDA to address safety concerns associated with QT interval prolongation.
The Drug Information Association/FDA/Canada Health Authorities’ meeting in
2003 allowed industry to discuss the paper, officially titled, “The Clinical Evaluation
of QT/QTc Interval Prolongation and Proarrhythmic Potential for Non-antiarrhythmic
Drugs,” with FDA in an open forum. Participants included the highly respected
experts, Douglas Throckmorton and Robert Temple, of FDA’s Cardio-Renal
Division. This was the second paper to address formally the clinical and regulatory
issues surrounding QT interval prolongation.
The purpose of the PCP was to further describe proper nonclinical QT work-
up and to establish the sensitivity and specificity of various nonclinical studies
(e.g., HERG assay, action potential duration, whole animal QT), using existing
and newly developed data.
Later in 2003, another DIA/FDA meeting, entitled, “ECGs in Clinical Trials: The
New Regulatory Realities,” was held as a follow-up to the first. Although consensus
was limited, a few important ideas emerged from this meeting:
• If QT signals are found, a “thorough study” must be submitted to the agency
(FDA’s Douglas Throckmorton, M.D.).
• All ECG data for the “thorough study” must be submitted to the agency in a
digital format (FDA’s Norman Stockbridge, M.D., Ph.D.).
Regulatory discussions that started in the EU and then involved Canada and the
USA eventually led to the publication of the cornerstone ICH guideline (2005), which
has been in force in those countries for several years, and, more recently, adopted by
Japan [7]. In 2006, Heath Canada released a document containing four questions and
answers that provided insight into its interpretation of the requirements of ICH E14,
and an ICH E14 questions and answers document was released in 2008. The ICH E14
document now governs cardiac safety assessment in all ICH regions. The thorough
QT/QT study ICH E14 discusses the assessment of an investigational drug’s propen-
sity to increase the length of the QT interval as seen on the ECG. Discussions of the
fundamentals regarding the QT interval and QT interval prolongation were presented
in Regulatory Focus in the articles entitled, “The Clinical and Regulatory Implications
of QT Interval Prolongation” and “An Update on the Implications of QT Interval
Prolongation” in the May 2004 and 2005 issues, respectively.
QT/QTc is considered a cardiac safety biomarker for the potential occurrence of
drug-induced TdP, and hence of the drug’s “torsadogenic” liability. Torsadogenic
liability is one factor considered by regulators when making decisions concerning
marketing approval and marketing withdrawal.
• When evaluating early stage products for either risk-based product investment or
even M&A, those products that have demonstrated a clean thorough QT study are
valued higher than those that have not completed the study. The author has seen
a product where the increased value to a product was ascribed much higher than
the value of a complete TQT study (typically less than $2–3 million, but can go
higher). The product was in a class known to have a propensity to increase the QT
interval and the large pharma company added over $10 million in value to the
product because the sponsor completed a clean TQT study prior to outlicensing.
4.1.4 Regulatory History of Formalized Cardiovascular

Safety Assessment for Antidiabetic Drugs for T2DM
Nissen and Wolski [8] published a meta-analysis in the New England Journal of
Medicine purporting to show a greater incidence of myocardial infarction in the
pooled rosiglitazone group compared with the pooled control group. The odds ratio
from the meta-analysis was 1.43 (95% CI: 1.03–1.98, p = 0.03), which attained
statistical significance. While many scientists questioned the validity of the statisti-
cal methodology employed in the analysis [see ref. 3 for extended discussion],
the publication of these findings provoked considerable media attention, resulting in
a joint meeting of FDA’s Endocrinologic and Metabolic Drugs Advisory Committee
4 Case Examples 11
and its Drug Safety and Risk Management Advisory Committee on 30 July 2007.
This meeting focused on the cardiovascular ischemic and thrombotic risks of the
thiazolidinediones (the other marketed drug in this class being pioglitazone, Actos)
with a particular focus on rosiglitazone.
Rosiglitazone’s sponsor and FDA both presented data before the joint commit-
tee. The members voted on a predetermined set of questions. They voted 20-3 that
rosiglitazone increased the cardiac risk in patients with T2DM, although, as Krall
[9] noted, “many members of the committee made statements accompanying their
votes that drew a distinction between the risk as compared with placebo and the risk
as compared with other antidiabetic drugs.”
Still, the committee’s members voted 22-1 that rosiglitazone should not be
removed from the market. Advisory committee votes are not binding on FDA, but
the agency generally follows the recommendations. On this occasion, FDA followed
its advisory committees’ recommendations—meaning that rosiglitazone was not
removed from the market. In November 2007, to address the potential for increased
cardiac risk, the sponsor agreed to add new warning language concerning poten-
tial increased risk for heart attacks to the drug’s label. The label cited four meta-
analyses with differing results and included the statement, “In their entirety, the
available data on the risk of myocardial ischemia are inconclusive.”
Despite rosiglitazone’s remaining on the market, in July 2008, a meeting of FDA’s
Endocrinologic and Metabolic Drugs Advisory Committee addressed potential over-
arching new regulatory guidance concerning cardiovascular assessments, both pre-
and postapproval, for drugs and biologics for treatment of T2DM. The committee
voted 14-2 that, even for drugs and biologics that do not display a concerning cardio-
vascular safety signal during Phase 2 and Phase 3 development, there should be a
requirement to conduct a long-term cardiovascular trial or to “provide other equiva-
lent evidence to rule out an unacceptable cardiovascular risk.” The Guidance for
Industry Diabetes Mellitus—Evaluating Cardiovascular Risk in New Antidiabetic
Therapies to Treat Type 2 Diabetes, issued in December 2008, very rapidly following
the committee’s meeting, addressed this issue. This issue has also been addressed by
EMA. In January 2010, it released a draft document entitled, “Guidance on Clinical
Investigations of Medical Products in the Treatment of Diabetes Mellitus,” that cov-
ered many aspects of such investigation, including cardiovascular safety.
Competitive Intelligence Comments/Summary
• Cardiac safety remains a key concern for all key ICH geographies, including the
USA, the EU, and Japan.
• Cardiac safety assessments of potential QT/QTc interval prolongation must be
addressed during drug development.
• Non-QT interval prolongation cardiovascular issues are emerging and have led
to promulgation of FDA guidance for the treatment of T2DM.
4.1.5 FDA’s December 2008 Guidance for Industry
The 2008 guidance document requires compelling evidence that a new agent to treat
T2DM is not associated with an unacceptable increase in cardiovascular risk.
A three-component model, involving clinical, regulatory, and statistical science, is
employed. At the end of an investigational drug’s preapproval clinical development
program, a meta-analysis is to be conducted using data from essentially all Phase 2
and Phase 3 trials to assess whether the drug is associated with an unacceptable
increase in risk. Compared with former clinical trials enrolling a smaller number of
subjects that may have been at a lower risk of cardiac events and of shorter duration
conducted prior to the publication of this document, the nature of the trials and the
nature of the subjects that will need to be studied are now different.
Larger and longer late Phase 2 trials are called for, as are larger and longer Phase 3
trials that include subjects at high risk for cardiovascular events.
• The potential market for new products to treat diabetes mellitus (DM) is lucra-
tive. When evaluating early stage assets for the treatment of DM, it is imperative
that the proposed Phase 2 and Phase 3 clinical trials are robust enough to satisfy
the FDA with regards to efficacy as well as demonstrate an absence of unaccept-
able cardiovascular risk.
The document provides guidance on suitable cardiovascular safety end points.
The major adverse cardiovascular events (MACE) composite end point is certainly
acceptable. This includes nonfatal myocardial infarction, nonfatal stroke, and car-
diovascular death. A composite end point can be advantageous when the number of
individual events may be too low for meaningful comparison of those occurring in
the test drug treatment group with those in the comparator treatment group. The
guidance also makes clear that end points now require independent adjudication.
The meta-analysis to be conducted at the end of the development program
assesses the drug’s MACE liability. Since the cardiovascular safety of the test drug
is judged against that of a comparator, a risk ratio point estimate and associated
confidence intervals (CIs) are of interest. Primary interest falls on the upper limit of
a two-sided 95% CI placed around the relative risk ratio point estimate generated by
the meta-analysis. Three scenarios are discussed in the guidance:
• If the upper limit of this CI is equal to or greater than 1.8, a drug is deemed to
have an unacceptable risk. In this case, “an additional single, large safety trial
should be conducted that alone, or added to other trials, would be able to satisfy
this upper [limit of the CI] before NDA/BLA submission.”
• If the upper limit is equal to or greater than 1.3 but less than 1.8, and the overall
risk/benefit analysis presented at submission supports marketing approval, a sub-
sequent step will generally be necessary. A postmarketing trial is required to show
definitively that the upper limit of the CI is actually less than 1.3. Thus, for drugs
4 Case Examples 13
that are not deemed to have an unacceptable risk at this point, later studies must
show that a more comprehensive assessment yields a risk ratio less than 1.3.
• If the upper limit is less than 1.3 and the overall risk/benefit analysis presented
at submission supports marketing approval, “a postmarketing cardiovascular
trial generally may not be necessary.”
4.1.6 Continued Discussion in the Literature of the Cardiovascular

Safety of Avandia and Actos
Since the July 2007 FDA Advisory Committees’ meeting, many papers discussing
the cardiovascular safety of both Avandia and Actos have been published, some of
which approached the safety of the two drugs comparatively. However, a review of
this literature reveals that the picture is still far from clear. Some publications have
reflected the views of the 2007 meta-analysis cited earlier [8, 9], including an updated
meta-analysis published by the same authors in 2010 [10]. Graham et al. reported that
the prescription of rosiglitazone, compared with pioglitazone, was associated with an
increased risk of stroke, heart failure, and all-cause mortality, and an increased risk
of the composite of acute myocardial infarction (AMI), stroke, heart failure, or all-
cause mortality in patients 65 years or older [11]. Other publications have reported
quite different findings. In a retrospective cohort study, Wertz et al. directly compared
Avandia and Actos and found no significant differences in their risk of AMI [12],
acute heart failure or death, findings echoed by Bilik et al. [13].
The Wellpoint Study, using an insurance company database and published in August
2010, appeared to show no difference between Avandia and Actos regarding key cardiac
adverse events, including heart attack. Although this study appeared somewhat reassur-
ing from a cardiac safety standpoint, critics cite several key shortcomings such as:
1. Average age of patients in the most recent study was 54, whereas patients treated
under Medicare are typically over age 65.
2. The Wellpoint Study was based on claims data from 2001 to 2005, before any
health warnings related to the drug had emerged, whereas the updated (2010)
Nissen and Wolski Study reviewed data from 2006 to 2009, when physicians
may have been more selective in choosing patients to receive the drug.
• Regulatory agencies, which obtain feedback from both internal and external
scientific experts, may differ when interpreting data and determining benefit versus
risk and conduct rigorous meetings to ascertain the best answers to (in general)
predefined safety and efficacy questions. While not required by law to accept the
decisions of such meetings, the FDA typically follows their suggestions.
• In general, clinical data from double blind clinical trials trumps all other forms
of data (e.g., post hoc analyses, retrospective studies) when making risk/benefit
decisions.
4.1.7 July 2010 FDA Advisory Committees’ Meeting on Avandia
In July 2010, the Endocrinologic and Metabolic Drugs Advisory Committee and the
Drug Safety and Risk Management Advisory Committee met again, primarily to
focus on the cardiovascular safety of Avandia. Compared with the 2007 joint
meeting, this meeting had a longer and more complex list of predetermined ques-
tions to be voted upon by members of the committees. Most notably, while 12 mem-
bers voted in favor of removing rosiglitazone from the market, 20 members voted
against it. Of these 20 members, 10 voted for additional warnings and restrictions
on the use of the drug and 7 voted for additional warnings.
In concordance with the overall recommendation of the Advisory Committees’
members, FDA did not withdraw rosiglitazone from the US market, but it did require
the drug’s sponsor to submit a risk evaluation and mitigation strategy (REMS)
within 60 days of the agency’s announcement of its decision on 23 September 2010.
The REMS is a tool available to FDA to mitigate overall risk, making the drug
available to certain patients under circumstances for which the treatment risk/benefit
profile is acceptable, while not allowing the drug’s use in other patients for whom
the risk/benefit profile is likely to be unfavorable.
4.1.8 EMA’s January 2010 Draft Guidance
The directives in the FDA and EMA guidance documents concerning cardiovascu-
lar safety assessment during clinical development of a new antidiabetic drug are
qualitatively comparable, with one salient difference: the lack of explicit values for
CI upper bounds in the EMA document. It discusses “point and interval estimates”
and an “unacceptable lack of precision” (presumably referring to confidence inter-
vals that are judged too wide), but appears to leave EMA regulators more discretion-
ary latitude than do the explicit thresholds of regulatory concern adopted by FDA.
4.1.9 Potential Ramifications for Future Global Development

of Antidiabetic Drugs for T2DM
• Cardiac safety remains a key concern across all geographies, especially in coun-
tries that have adopted ICH guidance, but may have large ramifications for
emerging markets that have not yet adopted ICH guidelines, such as India and
China, which are playing a greater role in global drug development.
• The raising of the regulatory bar for the development of antidiabetic drugs for
T2DM by the FDA and EMA documents is a potential concern to some in the
drug development community. If cardiovascular outcomes studies are required,
additional capital and operational costs and delays in time to market could be
References 15
considerable; so considerable, in fact, that some companies will no longer be

able to pursue development of these drugs for a disease that is increasingly prev-
alent globally.
As Caveney and Turner [14] observed, “Regulators, policy makers, and industry
leaders will need to be vigilant and work together to ensure that the new regulatory
guidance does not stifle the development of antidiabetic agents.”
4.1.10 Summary
• Key industry guidance for issues related to cardiac safety of drugs for non-
proarrhythmic conditions have been adopted by all key ICH geographies includ-
ing Canada, the USA, the EU, and Japan.
• FDA and EMA requirements for T2DM drugs add significant cost and time to
development of any potential new T2DM therapy, thereby raising the bar high
enough to potentially limit further development in this therapeutic area.
References
1. Huml RA, Turner JR. The Current Regulatory Landscape for Cardiac & Cardiovascular Safety
Assessments: Part I. RAPS Regulatory Focus, Vol. 16, No. 1, January 2011, 43–48.
2. Huml R, Turner JR, 2011, Regulatory Landscapes for Cardiac & Cardiovascular Safety
Assessments: A Global Perspective: Part II. RAPS Regulatory Focus, February, 38–42.
3. Turner JR, Durham TA, 2009, Integrated Cardiac Safety: Assessment methodologies for non-
cardiac drugs in discovery, development, and postmarketing surveillance. Hoboken, NJ: John
Wiley & Sons.
4. Turner JR, 2009, Drug safety, medication safety, patient safety: An overview of recent FDA
guidances and initiatives, Regulatory Rapporteur, April issue, 4–8.
5. Turner JR, Satin LZ, Callahan TS, Litwin JS, 2010, The Science of Cardiac Safety: Centralized
Approaches for Phase III Studies Enhance the Quality and Integrity of Collected Data. Applied
Clinical Trials, November Supplement, 1–5.
6. Satin LZ, Durham TA, Turner JR, 2011, Assessing a Drug’s Proarrhythmic Liability: An
Overview of Computer Simulation Modeling, Nonclinical Assays, and the Thorough QT/QTc
Study. Drug Information Journal, 45:357–375.
7. Turner JR, 2010, Japanese Cardiac Safety Requirements: The Rising of a New Regulatory
Landscape, International Pharmaceutical Industry, Summer issue, 64–67.
8. Nissen SE, Wolski K. Effect of rosiglitazone on the risk of myocardial infarction and death
from cardiovascular causes. N Engl J Med. 2007; 356:2457–2471.
9. Krall R. Letter to the Editor. N Engl J Med. 2007;357, 1776–1777.
10. Nissen SE, Wolski K. Rosiglitazone Revisited: An Updated Meta-analysis of Risk for Myocardial
Infarction and Cardiovascular Mortality. Arch Intern Med. 2010; 170:1191–1201.
11. Graham DJ, Quellet-Hellstrom R, MaCurdy TW, et al., Risk of acute myocardial infarction,
stroke, heart failure, and death in elderly Medicare patients treated with rosiglitazone or piogli-
tazone. JAMA. 2010;304:411–418.
12. Wertz DA, Chang CL, Sarawate CA. Risk of Cardiovascular Events and All-Cause Mortality
in Patients Treated With Thiazolidinediones in a Managed-Care Population. Circulation,
Cardiovascular Quality and Outcomes. 2010;3:538–45.
13. Bilik D, McEwen LN, Brown MB, et al. Thiazolidinediones, cardiovascular disease and
cardiovascular mortality: translating research into action for diabetes (TRIAD).
Pharmacoepidemiology and Drug Safety. 2010; 19:715–721.
14. Caveney E, Turner JR, 2010, Regulatory Landscapes for Future Antidiabetic Drug Development
(Part I): FDA Guidance on Assessment of Cardiovascular Risks. Journal for Clinical Studies,
January issue, 34–36.
15. Talbot P, Waller J (eds.). Stephens’ Detection of New Adverse Drug Reactions, 5th Edition,
December 2003.
4.2 Case Example II: Patient-Centric Services
This example provides an overview of the regulatory implications of Patient Centric

Services (PCS) [1, 2]. The valuation of services is different than the valuation of
products, because products usually have surrogates for those in a similar class or
can be valued based on a surrogate deemed suitable for comparison. Services need
to be validated/valued as well and the best method for estimating the value of such
services is to evaluate a case example where the services were successfully employed.
In the case of PCS, it is also important to evaluate the reputation and global reach
of the company (or companies) providing such services.
4.2.1 Introduction
The rise in health care costs has outpaced gross domestic product (GDP) growth
since the 1970s. Contributing factors are avoidable hospitalizations and disease pro-
gression that add more than $290 billion to health care expenditures per year in the
USA alone. Patient behavior is the largest single factor in health status and outcomes,
but influencing it has proven challenging, with few patient-focused behavioral inter-
ventions demonstrated to be effective. Recent evidence suggests that patient behavior
can only be influenced by targeted and personalized multichannel interventions that
take each patient’s unique characteristics and motivators into account. These targeted
and personalized interventions, such as remote alerts and real-time vital signs and
medication monitoring, are rooted in a deep understanding of psychological, clinical,
and environmental factors that influence patient behavior. Targeted interventions
based on such insights also have the potential to greatly increase patient and physi-
cian engagement by providing real-time feedback during the course of treatment.
This offers potential for changes in therapy, helping to avoid hospitalizations.
The term “patient-centric services” (PCS) refers to the design and implementation
of programs that support better patient outcomes while reducing health care costs.
This suite of services approach is based on an historical understanding of psychosocial,
environmental, and demographic factors that influence patient behavior and employs
technology platforms and predictive analytics to change that behavior. Table 1.3
shows selected PCS-related terms.
References 17
Table 1.3 List of selected terms and acronyms related to patient-centric services
Term or acronym Definition
Patient-centric The design and implementation of programs that support better
services (PCS) patient outcomes while reducing health care costs
Predictive analytics Mathematical tools that include predictive modeling based on
patient information, scoring the predictive models based on
patient characteristics, and forecasting of interventions
targeted for patients. A successful predictive analytics group
may include experts from a myriad of disciplines such as:
behavioral science, psychiatry, psychology, neurology,
clinical science (e.g., PhDs), clinicians (e.g., MDs with
board certification), demographics experts, biostatisticians,
mathematicians, analytical forecasters, marketing groups,
and brand management specialists
Neural networks A programming construct that mimics the biological properties
of neurons
Rules engine An algorithm that selects patient information based on certain
rules with the goal of providing primary segmentation of
patient data
Genetic algorithm A mathematical algorithm that mimics or attempts to math-
ematically replicate the process of natural evolution
Support vector machine A field of computer science that identifies patterns by taking
sets of input data and predicts the class of input data, which
could be as simple as gender or age
Patient response generator A mathematical tool used to generate the probability of patient
adherence to a particular medication
Share widget A computer tool, such as the Facebook Share Widget, that
allows a Web site or blog content to be shared on Facebook
Adherence Medication adherence measures patient compliance as a
percentage derived from taking the amount of medication
actually taken over a prescribed course divided by the total
amount of medication that should have been taken during
that period
SMS Short message service (SMS) is a text messaging service
component of phone, Web, or mobile communication
systems, using standardized communications protocols that
allow the exchange of short text messages between fixed
line or mobile phone devices
REMS Risk evaluation and mitigation strategy (REMS) was first
described in the FDA draft guidance document entitled,
“Guidance for Industry: Format and Content of Proposed
Risk Evaluation and Mitigation Strategies (REMS), REMS
assessments, and Proposed REMS Modifications” in
September 1996
FDA United States Food and Drug Administration
HIPAA Health Insurance Portability and Accountability Act of 1996
HITECH The Health Information Technology for Economic and Clinical
Health Act of 2009
PHI Protected health information
Local
Home Network
Server
Monitor with
Sensors Caregiver
Computer
Illustrative Internet
Remote PDA
Fig. 1.1 Illustrative example of a multiple touch point platform
PCS is based on patient-specific data including self-reported health provider,

insurance company, and third-party consumer-level data. However, the collection
and use of such data sources carry regulatory, ethical, and privacy challenges that
deserve careful consideration.
A continuing challenge to the pharmaceutical industry, including providers of PCS
services, is regulations governing the implementation of remote patient monitoring.
Examples of PCS Programs
PCS programs employ technology platforms to exchange targeted communications

with patients. They are classified as “single touch point” platforms that involve
communication between two players (e.g., patient and physician) or “multiple touch
point” platforms that enable communication across multiple players (e.g., patient,
physician, and pharmacist). For example, a multiple touch point platform could
provide a patient with wearable biosensors that send information about his vital
signs through a secure wireless network of a third-party provider to the smart phone
application of a physician (Fig. 1.1).
Examples of PCS Programs
Figure 1.1 provides an example of an integrated technology platform utilizing the

Wellbeing Monitor from Sonamba for monitoring elderly patients. This monitors
motion and sound activity, and compares current activity with historic activity lev-
els. Based on this comparison, Sonamba sends out periodic “all is well” or “atten-
tion needed” alerts to caregivers and support circle members’ cell phones. The
monitor is connected to a local network that sends information regarding a patient’s
health and activity to the Internet. A remote caregiver or physician can access the
recorded information on the patient’s activity and health through a computer or
smart phone. Figure 1.2 provides another example of an integrated technology plat-
form, a predictive analytics-based platform, used to drive patient adherence.
Predictive analytical modeling based on patient information, scoring the predictive
models based on patient characteristics, and forecasting of interventions targeted
for patients are the “brain” behind the PCS model.
References 19
Classification and Data Extraction and

Pattern Matching
Modelling Visualization
Statistics Decision Trees Data Mining
Clustering Neural Network Graphics and

Dashboards
Fig. 1.2 Illustrative example of a predictive analytics platform
Patient information is collected from a data warehouse, call center, pharmacy, or

patient recruitment vendor. Data are selected through a rules engine to obtain a
“treatment score” that indicates the likelihood of medication adherence. The treat-
ment score can be generated through the use of neural networks, a genetic algo-
rithm or a support vector machine. Similarly, a patient response generator can
provide a prediction (in the form of a probability) of the likelihood of patient
response/adherence. A final action report, customized for each patient and recom-
mending a set of actions or medication planning guidelines, can be transmitted
through short message service (SMS) text messaging, email, an automated call, or
even a landline phone.
• When evaluating companies that offer PCS services, it is important that the ven-
dor has experience in handling large data sources and a solid understanding of
the entire clinical drug development process.
• Vendors of PCS should be able to provide examples of their customized solutions
as surrogates and predictors of future success.
4.2.2 Privacy Challenges of Launching an Integrated

PCS Platform
Whether utilizing a single touch point or a multiple touch point integrated PCS
platform, the biggest regulatory challenge is protecting the privacy of identifiable
patient data as it flows through each touch point. This challenge is exacerbated by
the bi-directional flow of data between the PCS platform and the patient. PCS uses
various technologies for two-way communication with patients, such as social
media networks, mobile apps, remote monitoring devices, email, text messaging,
and Web portals. Each is covered by different regulations.
Protecting patient information that will flow through the various touch points
(e.g., SMS gateways, email servers, business analytics platforms) is critical and
subject to penalty if security is compromised. For example, if such information is
lost or stolen, the result can include severe fines from regulatory and/or enforcement
authorities and substantial intangible costs associated with reputational damage.
• Vendors of PCS should be compliant with regulations and have a demonstrated

ability of success working to protect patients’ rights.
4.2.3 Remote Patient Monitoring
Although remote patient monitoring can employ different modalities, this article
focuses primarily on mobile phone applications because of their significant poten-
tial to change human behavior. In the USA, 89% of the population has access to
mobile phone technologies, compared with 76% with access to desktop computers
(PCs). Remote patient monitoring devices are evolving quickly and include mobile
smart phone technology and remote transmitter devices. Some examples are:
• Smart pill containers that record when a patient takes or misses a pill, and then
use wireless technology to notify the patient and/or doctor or send a reminder via
a text, email, or electronic voice mail message (e.g., Vitality GlowCaps).
• A blood glucose monitor for home use by a person with diabetes that can remotely
send information to the doctor’s office (e.g., ACCU-CHEK Smart Pix device
reader).
• A mobile application that monitors vital signs and sends this information to the
patient and/or doctor (e.g., Remote Vital Sign Monitoring System from Argonne
National Laboratory and Northwestern University, MEMS-Wear Biomonitoring
System).
4.2.4 Regulatory Implications and Challenges
Regardless of the technology, all data transfers for covered entities, including health
care providers that conduct electronic transactions, health care clearinghouses, or
health plans, are governed under the Health Insurance Portability and Accountability
Act of 1996 (HIPAA), which seeks to protect patient privacy. This act specifies that
a secure transmission line is not sufficient; the line must also be encrypted. US FDA
guidelines for mobile medical applications, currently in draft form, should also be
consulted, particularly when they are finalized.
References 21
In addition to HIPAA, the most important regulations impacting PCS include:

• FDA’s Draft Guidance for Industry and Food and Drug Administration Staff—
Mobile Medical Applications, published on 21 July 2011.
• Health Information Technology for Economic and Clinical Health Act of 2009
(HITECH), which enhances HIPAA’s privacy and security regulations.
• 510(k) and PMA Device Classification and its implications on mobile apps.
• Social media guidance from FDA’s OPDP (Draft Guidance issued December
2011, entitled, “Responding to Unsolicited Requests for Off-label Information
About Prescription Drugs and Medical Devices”).
• Code of Federal Regulations (CFR) Title 21 Code set (Parts 11 and 50).
• FDA’s Risk Evaluation and Mitigation Strategies (REMS).
4.2.5 HIPAA
The HIPAA Privacy Rule guards the confidentiality of protected health information
(PHI) held by covered entities and gives patients particular rights regarding that
information. The Privacy Rule is balanced to permit the disclosure of PHI needed
for patient care. It is imperative that PCS providers take HIPAA very seriously and
apply proper measures it mandates to prevent the breach of PHI. However, pharma-
ceutical companies are not typically HIPAA-covered entities, so compliance is not
mandatory but may be voluntary. For example, for text messaging, no security is
required for a general health and wellness message such as, “Read food labels; aim
for whole grains and no added sugar,” which does not meet the definition of PHI.
• Although pharmaceutical companies are not typically HIPAA-covered entities, it

is important that every part of a PCS solution (which may employ a multitude of
vendors) be investigated to make sure that all regulations are met and that a
process is in place to ensure continuing compliance with FDA regulations.
An example of a text message that comes under HIPAA regulations [e.g., iden-
tifiable health information that touches a covered entity (CE)] is: “Mr. Sean
Anderson: please take your Brand X daily to help control your diabetes.” If sent by
a CE, this message would need to comply with HIPAA privacy regulations for PHI
for three reasons: it names the person, the medication, and the disease.
4.2.6 HITECH
The HITECH Act, enacted as part of the American Recovery and Reinvestment Act
of 2009, was signed into law on 17 February 2009 to promote the adoption and
meaningful use of health information technology. Subtitle D of the act addresses the
privacy and security concerns associated with the electronic transmission of health
information, in part, through several provisions that strengthen civil and criminal
enforcement of the HIPAA rules.
4.2.7 Social Media and HIPAA
Once personalized patient data emerge from sources such as social media, HIPAA
regulations apply. Concerns here could include off-label comments, and reporting
of adverse events and actual lab values (e.g., from self-administered tests).
For example, while using a social media tool such as Facebook, a person may be
allowed to share a PCS message such as, “Please run daily for one hour and share
website link with your friends that mentions tips to eat right to control diabetes.”
However, if Facebook is used by a PCS service to share links that inadvertently
exaggerate the effectiveness of a particular drug, omit risk information for that drug
or allow sharing of experiences related to an identifiable patient or identifiable per-
son reporting an adverse event, OPDP may issue a Warning Letter or impose a fine.
This is part of OPDP’s remit to ensure that prescription drug information is truthful,
balanced, and accurately communicated.
Two examples of such violations are the following hypothetical text messages:
• “According to research by Dr. Gardner at UC Berkeley, taking Brand X will
reduce your blood glucose level by 8%. As such, Brand X seems to be the next
generation drug.”
• “Mr. Anderson, thank you for your comments on this finding. I will share this
link with my online friends.” This could raise concerns with respect to interven-
tion by OPDP as it reveals (1) the name of identifiable patient, (2) exaggerated
information about a particular drug (e.g., Brand X), and (3) highlights informa-
tion about specific research.
As regulations have become tighter and more complex, tools like Facebook’s
Share Widget now have character input constraints and it is not always possible for
a PCS provider or a drug manufacturer to reveal all potential information.
4.2.8 510(k) Classification
Medical devices on the US market are regulated by FDA. Some medical devices,
such as blood glucose monitors, are now capable of transmitting vital medical infor-
mation to physicians. Such devices, if not encrypted, are vulnerable to loss, hacking,
or modification of patient health information by individuals unauthorized to access
those data. Therefore, they are now regulated under HIPAA.
A PCS solution must take into account the regulatory implications of such
devices, no matter how they are connected to a particular platform. Section 510(k)
of the Food, Drug, and Cosmetic Act requires device manufacturers to notify FDA
References 23
of their intent to market a medical device. This is known as Premarket Notification,

also called PMN or 510(k). This allows FDA to determine whether the device is
equivalent to a device already placed in one of the three classification categories
(Class I, II, or III). Thus, “new” devices (not in commercial distribution prior to 28
May 1976) that have not been classified can be properly identified. Devices are
becoming more tightly integrated with mobile applications. Some mobile applica-
tions themselves may also be classified as devices and, depending upon use, the
same application/device can be classified as either Class I or Class II; the latter
could result in a more protracted and costly registration pathway.
4.2.9 Health and Wellness Programs
Health and wellness programs may be regulated under HIPAA, especially those that
fall under the Employee Health and Wellness category. Programs that provide incen-
tives based on participation are not covered under HIPAA, but those that give
rewards based on revealing certain health factors (e.g., medical history, genetic
information, disability) are.
4.2.10 REMS Programs
As a result of recent FDA guidance and increased awareness of safety, many new
products approved in the USA will need to employ a REMS. All innovative prod-
ucts [e.g., new chemical entities (NCEs)] require a REMS and biosimilars will
require REMS if there are safety differences from the innovator product. REMS
vary in the demands made of the pharmaceutical company, but include plans for com-
munication, implementation, and sometimes for restricted distribution (e.g., elements
to assure safe use or ETASU).
• A tailored PCS solution for any client will need to fully integrate the proposed
REMS with all potential regulations.
– Many REMS may have technology interventions such as certification and
online training of patients, physicians, and distributors. They may also include
patient data collection via a survey or Web portals for driving medication
adherence and disseminating risk information.
Making medication guides available and communicating risk information through
social media, Web portals, or call centers and conveying information to physicians
also will be part of many REMS. Due to this multiple touch point environment and
possible technology interventions, REMS will have to comply with additional regu-
lations such as HIPAA as well as FDA’s mobile app guidance. At first glance, REMS
requirements seem straightforward, but even large pharmaceutical companies may
not be fully prepared. FDA required Bristol-Myers Squibb to inform health care
professionals about the REMS for belatacept. This requirement was imposed to
ensure that the benefits outweighed the risks for transplant patients who received the
drug; however, this patient protection also came with a higher price tag.
Here is an example of the complexity surrounding REMS, in the context of
HIPAA guidelines:
• An employee from a call center (designated as a CE) for a REMS program may
convey a message to a patient such as: “Please take your medication on time.
Some general side effects associated with such medications can include severe
headache and muscle weakness for up to two days.”
• The same employee cannot convey a message such as: “Mr. Anderson, although
Brand X is very effective in reducing your blood glucose, it may also cause
muscle weakness. Make sure that you make an appointment with a physician to
test your blood glucose level, such as Dr. Schultz.” This message may raise con-
cerns with HIPAA by disclosing the name of patient, type of drug, indication of
disease type, and also the name of the physician associated with the patient.
4.2.11 Latest FDA Regulations for Mobile Medical Applications
On 21 July 2011, FDA issued Draft Guidance for Industry and Food and Drug
Administration Staff: Mobile Medical Applications. This document not only pro-
vides an opportunity for those who will be most impacted by the guidance to give
feedback but also allows access into agency thinking.
Ambiguity exists in the guidance regarding mobile applications used to provide
both medication adherence messages and health and wellness messages. No clear
FDA guidance exists for certain mobile applications, for example, a mobile applica-
tion that provides both a medical reminder for treating diabetes and a reminder
about jogging at a certain time.
FDA states that an entity that provides application functionality through a Web
service or Web support for use on a mobile platform is considered a manufacturer.
However, it is unclear whether this means all providers of patient-centric programs
that utilize some decision support tools on mobile platforms will be considered
manufacturers. Also, the position of a company that simply hosts a Web site, but is
not responsible for branding or creating a software platform, is unclear. Further
clarification is required to address liability concerns.
Three key summary points from this draft FDA guidance document are provided
in Table 1.4.
Consider the degree of regulatory impact on the following types of electronic
messages for a PCS:
• A mobile app that maps calorie count while a patient is running and delivers this
message: “You reduced your caloric count by 242 calories. Please increase your
run time by an additional 42 minutes to achieve your goal.” An app that provides
a message regarding “general health and wellness” is not regulated by FDA.
References 25
Table 1.4 Key points from FDA’s 2011 guidance on mobile medical applications
Section Key point
Regulated mobile When the intended use of a mobile application is for the diagnosis
applications of disease or other conditions, or the cure, mitigation, treatment,
or prevention of disease, or is intended to affect the structure or any
function of the human body, the mobile application is considered
a device and is regulated under FDA Device Classification
Guidelines
Non-regulated mobile Mobile applications that are solely used to log, record, track, evaluate,
applications or make decisions or suggestions related to developing or
maintaining general health and wellness
Mobile application Entity that initiates specifications or requirements for mobile medical
manufacturer apps or procures product development/manufacturing services from
other individuals or entities (second party) for subsequent
commercial distribution
• An app connected to a blood glucose monitor that acts as an “extended” device

to control the release of insulin falls under FDA regulation.
• An app that calculates health scores and sends this information to a clinician falls
under FDA’s oversight. For example, an app that calculates a health score based
on a certain algorithm and delivers a message such as: “Your health score is now
42 which is a drop of 25%. You may want to enter a specific answer to the ques-
tionnaire that will be displayed to you shortly. This information will also be
shared with your physician.” An entity that initiates specifications or require-
ments for apps or procures products from other individuals for subsequent com-
mercial distribution is considered a manufacturer of apps, thus regulated by FDA.
If a PCS provider initiates designing of apps, then it will be considered an app
manufacturer and such apps will be regulated by FDA.
4.2.12 Regulatory Overlap
Due to the multiplicity of regulations, there is significant potential for overlap. If a

company wishes to use social media to promote or brand a product, there is the
potential for private information about a patient to be shared inadvertently or for
efficacy to be exaggerated. The inadvertent sharing of information by covered enti-
ties would be considered a HIPAA violation, while exaggeration would be a viola-
tion of OPDP regulations. Thus, the pharmaceutical industry presently is reluctant
to use social media. Some regulations overlap one another when different technology
media are used. For example, a Web portal that integrates social media tools
(e.g., Facebook and Twitter) may merge with email messaging and mobile applica-
tions that can be downloaded. HIPAA and FDA’s mobile application guidance
overlap in this example. As a result, it can be difficult for companies unused to
implementing firewall and security protections for large databases to launch tailored
PCS programs while complying with new and changing regulations.
• Clearly, evolving industry standards need to be compliant with regulations. It is

imperative to understand which standards are acceptable under various
regulations.
• A thorough understanding of regulations is critical for firms launching patient-
centric programs.
• Those offering PCS programs will have to conduct due diligence not only inter-
nally but also on each partner in the system to ensure regulatory compliance.
Firms that launch PCS solutions will need to acquire an architecture platform
that is scalable and flexible enough to accommodate frequent changes in tech-
nology, and adapt to future modifications in regulations.
4.2.13 Summary
• PCS is the design and implementation of programs that support better patient
outcomes while reducing health care costs.
• Adherence and disease management, wellness programs, and remote patient
monitoring are three of the major applications for any successful PCS tailored
solution.
• Pharmaceutical companies that employ PCS programs that rely on remote patient
monitoring will need to comply with FDA regulations.
• Apps that are subject to FDA’s guidance on mobile applications will also be sub-
ject to HIPAA regulations. As such, there will be instances where regulations
overlap, making an understanding of the regulatory implications more complex.
References
1. Walp D, Jain H, Nimsch C, Huml RA. Regulatory Implications of Technology Platforms for
Patient Centric Services, RAPS Focus. Vol. 16, No. 11, November 2011, pp24–26, 29–32 and 34.
2. Walp D, Jain H, Nimsch C, Huml RA. Optimising Patient Centric Services: A Tailored Solution,
Journal for Patient Compliance, Vol.1, Issue 3, November 2011, pp36–40.
4.3 Case Example III: Biosimilars
Global regulatory agencies are working hard to facilitate bringing copies of

well-known medicinal biologics to market. Three key factors drive this process:
• Technological advancements permitting better characterization and testing of
protein-based biologic products.
• Patent expiration on many biologics in the EU and the USA.
• Escalating health care costs.
References 27
Regulatory strategy in this regard is following much the same route used in the past to
bring generic drugs to market. Generic drugs gained momentum in the USA when the
Hatch-Waxman Act (Drug Price Competition and Patent Term Restoration Act of
1984) was enacted. This law provided an abbreviated pathway for bringing pharma-
ceutically and therapeutically equivalent products into the marketplace without having
to repeat costly preclinical safety and clinical safety and efficacy studies, thereby
reducing development costs to a fraction of those for the original branded product.
In essence, it accelerated the approval of generic drugs and sought to guarantee con-
tinued development of new drugs through such special incentives as exclusivities.
Biologics are created from living organisms, either naturally or via genetic
manipulation (e.g., monoclonal antibodies), or are manufactured from complex
building blocks of living organisms (e.g., aptamers, which are oligonucleic acid or
peptide molecules that bind to a specific molecule). In either case, they demonstrate
considerable molecular complexity and heterogeneity and are more difficult to char-
acterize physicochemically than synthetic chemical entities. These differences are
reflected in the regulatory agencies’ refusal to adopt the same paradigm for generic
biologic drugs as for traditional small molecule products. The European and
Canadian regulatory authorities are taking a global leadership role in this regard. In
the USA, final regulatory guidance is still in progress.
Follow-on biologic (FOB) was the generally accepted terminology in the USA, but
with the passage of the Patient Protection and Affordable Care Act, and to conform to
industry nomenclature, they are now referred to as biosimilars [1–3]. “Biogeneric” is
another term often favored by the generic drug industry. European and Canadian regu-
latory agencies have been referring to these biologic entities as “biosimilars.” This
example summarizes the status of this rapidly evolving area in the EU and the USA.
• Biosimilars represent a new frontier in the US pharmaceutical industry. Large

pharmaceutical companies which produce biologics will fight back (e.g., Amgen)
as patents and other protections disappear.
• Long-awaited draft FDA guidance was issued on 9 February 2012 [4–6], in part
because the USA and EU are working together to drive health care costs down.
• Unlike small molecule generics, biosimilars will likely require clinical trials,
thus adding cost and expense to biosimilar programs. Those companies that are
well capitalized or have access to services that can conduct clinical trials will be
at an advantage over those who are smaller or less capitalized.
• The addition of clinical trials represent further risk.
4.3.1 EU Biosimilar Status
Under the direction of the Committee for Medicinal Products for Human Use
(CHMP), the EMA has led the way on FOBs, or biosimilars, issuing a series of
regulatory guidances after its first specific regulatory guidance on 30 October 2005.
The initial guidance was followed by two general guidance documents addressing
quality and nonclinical and clinical perspectives (June 2006), four product-specific
annexes on nonclinical and clinical issues (June–July 2006), and a manufacturing
change comparability guideline (November 2007). Each document provides general
expectations and differences for specific FOB product testing strategies at the man-
ufacturing, biological efficacy and preclinical safety levels, without being unduly
prescriptive. Discussion with CHMP is always encouraged and a case-by-case
approach to all biosimilar reviews will be adopted.
• Until FDA draft guidance was issued in 2012 (describing a 351(k) application
process for biosimilars), European guidance provided the only ICH-derived
surrogate for the development of biosimilars in the USA.
According to Reuters (6 January 2012, 9:29 a.m. EST), European regulators will
detail the requirements for copies of multiple types of biotech drugs by mid-2012,
setting the stage for increased generic competition in a multibillion-dollar market
that includes products for cancer and modern insulins. Dr. Guido Rasi, the new
executive director of the EMA, told Reuters that his agency planned to issue a final
guideline on biosimilar monoclonal antibodies in either March or April 2012.
Draft guidelines on the approval process for copies of other drugs were expected
to follow in May or June 2012. These will include low molecular weight heparin,
such as Sanofi’s Lovenox or enoxaparin, and modern analogues of insulin.
FOBs are referred to as biosimilars in Europe because they were not true gener-
ics, in the traditional sense of the word, and may be subtly different from the refer-
ence product. Because of the inherent variability in biologic manufacturing, it is
considered a similar rather than duplicative production process. Ultimately, a
biosimilar’s approval depends upon the sponsor’s ability first to characterize its
product and then to undertake detailed and extensive comparability studies. These
studies must demonstrate similarity in quality, safety, and efficacy between the new
biosimilar and the chosen reference medicinal product, authorized within the
Community on the basis of a full dossier in accordance with provisions of Article 8
of Directive 2001/83/EC, as amended. Additional factors unique to the chemistry,
manufacturing, and controls (CMC) process are discussed later in this section.
4.3.2 Approved Biosimilars in the EU
Europe created the fundamental groundwork for the US and Japanese regulatory
agencies by being the first to issue regulatory guidance and by approving two bio-
similars: Omnitrope and Valtropin. The CHMP initially issued three positive opin-
ions for biosimilars of epoetin alfa by comparing these new products to Johnson and
Johnson’s Eprex/Erypo—the European Commission granted marketing authoriza-
tion for all three of these products on 28 August 2007 (see European Public
Assessment Reports as listed on www.emea.europe.eu). Additional approvals since
2007 were related to Filgrastim (Table 1.5).
References 29
Table 1.5 Summary of approved European biosimilars

Common Reference Year
Product name (INN) Company product of approval
Omnitrope Somatropin Sandoz International Genotropin 2006
Limited
Valtropin Somatropin Biopartners GmbH Humatrope 2006
Binocrit Epoetin Alfa Sandoz International Eprex 2007
Limited
Epoetin Alfa Hexal Epoetin Alfa HEXAL AG Eprex 2007
Abseamed Epoetin Alfa Medice Arzneimittel Eprex 2007
Putter GmbH
and Co. KG
Retacrit Epoetin Zeta Hospira Inc. Eprex 2007
Silapo Epoetin Zeta STADA Arzneimittel AG Eprex 2007
Biograstim Filgrastim CT Arzneimittel GmbH Neupogen 2008
Filgrastim Filgrastim Ratiopharm GmbH Neupogen 2008
Ratiopharm
Ratiograstim Filgrastim Ratiopharm GmbH Neupogen 2008
Tevagrastim Filgrastim Teva Generics GmbH Neupogen 2008
Zarzio Filgrastim Sandoz International Neupogen 2009
Limited
Filgrastim Filgrastim HEXAL AG Neupogen 2009
Hexal
Nivestim Filgrastim Hospira Inc. Neupogen 2010
• As R&D pipelines dry up, pharmaceutical companies are looking for ways to
diversify their business models. Generic biologics create a new market to gain
access to this pool of money. The ability of a generic biologic sponsor to success-
fully make such products is directly related to the timing of the original product’s
patent expiration, the sophistication of the chemical expertise behind the dupli-
cation (or modification to gain additional patent coverage), and the finances to
run the clinical trial work needed for registration.
• The USA lags behind Europe regarding the issuance of regulatory guidance. In part
because the EU has more experience with biosimilars, the EU and the USA have
agreed to collaborate together to lower the cost for drug developers (June 2011).
• US regulatory guidance was originally expected by the end of 2011; however, in
part due a desire by the FDA to include feedback from public meetings held on 2–3
November 2011, draft guidance was not issued until 9 February 2012 (see Docket
No. FDA-2010-N-0477).
4.3.3 Status of FOBs in America
Trying to build on the groundwork laid in Europe, and under pressure from both
third-party payers and patient groups, US legislators scrambled to pass a bill that
would allow FOBs to move forward in the USA while protecting innovation and
assuring patient safety.
US Congress finally amended the Public Health Service Act to allow approval of
biosimilars in the USA. President Obama signed the Patient Protection and
Affordable Care Act into law on 22 March 2010. The law incorporates a specific
subsection dealing with biosimilars entitled the Biologics Price Competition and
Innovation Act (BPCIA). Consistent with the terminology used elsewhere in the
world, the legislation uses “biosimilars” when referring to these biopharmaceutical
products instead of “follow-on biologics” or some other term, helping to avoid
further confusion in this arena.
The BPCIA outlines an abbreviated approval pathway for biosimilars and even
allows for the possibility of interchangeability for these products with brand name
biologics.
4.3.4 Interchangeability
FDA will have the authority to determine whether the biosimilar product is inter-
changeable with the reference product based upon data submitted in the application.
To be deemed interchangeable, a biosimilar’s “risk of safety and diminished efficacy”
will need to be ascertained by “alternating or switching” between the two products
in multiple administrations. In the end, the risk of using the biosimilar cannot be
higher than that of the reference product if interchangeability is to be allowed.
The latest FDA draft guidance defines an “interchangeable” biologic as follows:
• “An ‘interchangeable’ biological product is biosimilar to the reference product
and can be expected to produce the same clinical result as the reference product
in any given patient. In addition, for a biological product that is administered
more than once to an individual (as many biologic products are), the risk in terms
of safety or diminished efficacy of alternating or switching between use of the
biological product and the reference product is not greater than the risk of using
the reference product without such alternation or switch.”
4.3.5 Exclusivity
With passage of the Patient Protection and Affordable Care Act, the biotechnology
industry won a long fight over the number of years of exclusivity for innovator
products, but this may now be in jeopardy. The BPCIA currently allows 12 years of
market exclusivity for new biologics, whereas small molecule drugs normally
receive only 3–5 years of exclusivity based upon the clinical data submitted;
however, debate continues, in an effort to drive prices down, to reduce the biologic
exclusivity requirements from 12 to 7 years—more in line with other countries
(e.g., Europe and South Korea provide 8 years’ exclusivity; Japan and Canada each
have 6 years; and Australia has 5 years).
References 31
• A potential reduction in exclusivity from 12 to 7 years will negatively affect the

net present value (NPV) of any biosimilar program conducted in the USA. For
smaller companies, this may decrease their incentive to develop biosimilars.
For example, according to Datamonitor (December 2011), following inclusion of
the potential reduction in exclusivity in the February 2011 federal budget plan,
President Barack Obama announced further plans to push for this reduction
(predicted to save the US government $2.3 billion over 10 years) as part of his deficit
reduction plans announced in September 2011.
At present, the first biosimilar product will garner 1 year of market exclusivity.
No biosimilar applications can be submitted until 4 years after the licensing of the
reference product and, even if approved, no biosimilar will be allowed to be
marketed until the end of the first product’s 12-year exclusivity term.
FDA is in the process of working through the newly amended regulations and
recently held public meetings in November 2011 which resulted in the three draft
guidances issued in February 2012. This guidance does grant FDA the latitude to
decide on a case-by-case basis the requirements for clinical data, nonclinical data
(if any), and interchangeability requirements.
4.3.6 Approved Biosimilars in the USA
FDA has approved “follow-on protein” (FOP) products, which are now referred to
as biosimilars, pursuant to the Federal Food, Drug, & Cosmetic Act (FD&C Act).
The FD&C Act grants FDA the legal authority to approve such products, provided
the reference product was approved pursuant to the act. These products have been
approved via the 505(b)2 pathway, where the applicant was allowed to rely upon
safety and efficacy data from the literature or from a previously approved biologic
(reference listed) product. These biosimilars were not rated therapeutically equiv-
alent; hence, they are not true generic versions of the reference product.
Prescriptions for these products must be written just like those for innovator bio-
logic products. Previously approved biosimilars include “Omnitrope, GlucaGen
(glucagon recombinant for injection), Hylenex (hyaluronidase recombinant
human), Hydase and Amphadase (hyaluronidase), and Fortical (calcitonin salmon
recombinant) Nasal Spray.”
However, the “majority of protein products are licensed as biological products
under the Public Health Service Act (PHSA), and are not approved as drugs under
the FD&C Act.” As such abbreviated approval pathways including 505(b)(2) or
505(j) of the FD&C Act do not exist for protein products licensed under PHSA sec-
tion 351. To address this issue, section 351 needed to be amended as section 351(k)
for the purposes of obtaining licensure by submitting a marketing application
through the abbreviated licensure pathway.
FDA had stated that it had the ability to approve biosimilars (see FDA White
Paper dated 13 April 2007) before draft regulatory guidance was provided. One key
aspect noted in the new draft FDA guidance is related to the “totality-of-the-evi-
dence.” Although a stepwise process is noted in the draft guidance, a sponsor of a
proposed product must include in its submission to the FDA information that “there
are no clinically meaningful differences between the biological product and the
reference product in terms of the safety, purity, and potency of the product.”
It is assumed that clinical trial requirements for products under the 351(k) process
will be similar to those under the 505(b)2 application process, with the potential for
the FDA to determine biosimilar product development requirements on a case-by-
case basis.
Despite the recent draft guidance, there is still the potential for confusion due to
the time lag to US draft guidance issuance and the fact that many biosimilar pro-
grams had already begun in the USA using EU guidance. Despite the welcomed
new draft guidance, it remains vital for a sponsor to determine regulatory expecta-
tions prior to undertaking a biosimilars program.
4.3.7 Summary
In conclusion, the global status of FOBs and biosimilars is continuing to evolve as

follows:
• The European Union took the global lead in establishing regulatory pathways for
the approval of biosimilar products, which served as a basis for other ICH countries
such as the USA and could serve as a basis for biosimilar guidance in Japan.
• European guidelines cover critical issues such as quality and nonclinical and clin-
ical considerations in biosimilar product-specific guidelines for a number of prod-
uct types. The author summarized the key points to evolving US legislation on
biosimilars in 2008 [7, 8] and modified these publications for the SpringerBrief.
• US legislators have finally crafted legislation that will allow biosimilars to be
approved in the USA under the PHSA. Although approved under the Patient
Protection and Affordable Care Act, there is renewed interested in reducing the
biologic exclusivity requirements from 12 to 7 years.
• The three draft US guidance documents give FDA the authority and flexibility to
decide on a case-by-case basis the amount of clinical data, if any, required for the
biosimilar’s approval.
4.3.8 Chemistry, Manufacturing & Controls (CMC)

Concerns for Biosimilars
As stated earlier, biologics are created from living organisms or are manufactured
from building blocks of living organisms. Because they demonstrate considerable
molecular complexity and heterogeneity, they are more difficult to characterize
physicochemically than synthetic chemical entities.
References 33
Competitive Intelligence Comment
• In addition to the CMC expertise required to make biosimilars (which is much

more difficult and requires greater skills when compared with small molecule
generic development), and, in part due to the additional costs associated with
one or more clinical trials, biosimilars will retain a larger portion of the origina-
tor cost (e.g., 75% or more) when compared with small molecule generics (which
often retain less than 10% of the original cost, e.g., “pennies on the dollar”). As
such, biosimilar drug development, while challenging, represents a way to cap-
ture part of lucrative markets (e.g., greater than $1 billion/year in some cases).
This section summarizes some of the issues pertaining to biosimilars in Europe
and the USA [4]. It focuses on the key parts of the development package for an FOB
marketing application, including the comparability protocol exercise and regulatory
authorities’ preclinical and clinical expectations [5].
Competitive Intelligence Comment
• Biosimilar regulatory guidance from the European Union is furthest along in

conception and application. Until US draft guidance was issued in February
2012 (e.g., Quality Considerations in Demonstrating Biosimilarity to a Reference
Protein Product, February 2012) it behooved US developers to understand EU
regulatory guidance. Large deviations from EU guidance, in the absence of US
guidance, were deemed risky. As drug developers seek to understand the new
draft guidance, it is imperative that frequent meetings with the FDA are held to
ensure that the latest draft guidance is followed.
As for all other drug products, a biosimilar submission to the regulatory authori-
ties requires a complete CMC package, which is provided as Module 3 in the com-
mon technical document (CTD). This CTD section provides complete information
on the development, manufacture, and control of both the active drug substance and
the drug product. EMA’s Guideline on Similar Biological Medicinal Products
Containing Biotechnology-derived Proteins as Active Substance: Quality Issues is a
good starting point. In addition—and fundamental to defining the overall develop-
ment package—the CMC comparability exercise is reported as a separate section of
the filing. The manufacturer must carefully design the comparability exercise based
upon full knowledge of the molecular structure and its relevance to the mode of
action. The result is a series of physicochemical tests, alone or in combination with
such biological tests as in vitro or in vivo bioassays, and receptor-binding studies.
These tests are applied to the biosimilar and the selected reference product to dem-
onstrate similarities and differences between the two products. Where such testing
cannot establish similarity, or where differences arise, the outstanding issues must
be addressed through supporting preclinical and/or clinical work. Biosimilar com-
parability testing builds upon earlier guidance on comparability of recombinant
products arising from manufacturing changes.
Changes introduced early in a biosimilar’s development will give rise to some

predictable differences from the reference product, assuming that sufficient informa-
tion on the reference product is in the public domain and the mechanism of action—
at the molecular level—is well established. These differences should be assessed as
part of the comparability review and appropriate testing must be performed. An
example would be change of the host cell line and vector. This is a common change
that can have far-ranging consequences, such as host cell protein and DNA (type and
level) differences requiring that the levels present be justified and qualified. Cell line
change may also go from internal protein storage requiring cell disruption to a pro-
tein expressed directly into the media, which may impact the overall product profile
with regard to related materials and impurities. Another difference that may arise
from changing the cell line is an alteration in the degree and type of glycosylation
with potential changes to product half-life and receptor affinity and important
changes to immunogenicity. These points and their resulting impacts illustrate why
tight coordination among the three disciplines of quality, safety, and efficacy is para-
mount before instituting a biotechnology-derived medicinal development program.
An important consideration for any comparability exercise is the lack of access to
the reference product drug substance. In a best-case scenario, the formulation adopted
for the reference product may allow direct comparison and be amenable to the battery
of tests to be employed. However, coformulants may potentially render some testing
inapplicable or interfere with other procedures, thereby requiring extraction of the drug
substance. Extraction itself requires careful assessment, as it may induce changes that
render the results inapplicable to the product. Before a definitive comparability testing
protocol can be designed, preliminary studies may be required to determine test method
applicability and whether the drug product or extracted drug substance will be used. A
corollary to the formulation impact is the ability to assay the reference product since
certificates of analysis frequently are not available or the reference product is partially
through its shelf life. Using a nominal value may have marked effects on demonstrat-
ing equivalence in comparator trials or preclinical programs where the product has a
wide specification. Thus, materials should be assayed for potency prior to use.
Intrinsic to establishing similarity is the complexity of the molecule under
investigation.
Proteins (the current focus of biosimilars) can range from polypeptides to multi-
domain proteins with or without posttranslational changes, even ignoring degrees of
heterogeneity. The EU guidance recognizes the characterization difficulties and
issues of variability with the expectation that the biosimilar approach be applied to
highly purified product that can be thoroughly characterized—essentially a biotech-
nology-derived medicinal product. EU authorities also require full confirmatory
clinical data for follow-on products derived from blood or plasma, and the case-by-
case consideration of immunologic modulators.
Current emphasis remains on licensing similar first-generation proteins coming
off patent. Similar guidance and comparability concepts will need to be extended to
chemically modified proteins (e.g., pegylated) as their patents expire. With these
products, subtle differences between proteins may also affect actual amino acid
coupling sites (and potential resistance to cleavage) that may markedly affect the
mean residence time and pharmacodynamic profiles of these agents. Nevertheless,
References 35
while chemically modified proteins will add yet another layer of complexity to com-
parability exercises, the underlying guidance principles will remain applicable.
Some companies, in response to the threat of biosimilars, are implementing
sophisticated life cycle plans, including the issuance of new patents to protect their
branded biologics [e.g., Amgen’s COM patent for Epogen (epoetin alfa)].
Characterization of proteins as either drug substances or drug products utilizes
combinations of techniques. Testing is conducted to establish the primary and higher-
order structures present, the presence of related materials (amino acid variants, dimers,
etc.), and contaminants arising from the cell line and processing (host cell proteins,
plasmid DNA, peptidase inhibitors, etc.), as well as the protein’s physicochemical
parameters (molecular weight, isoelectric point, degree and type of glycosylation,
etc.). Techniques employed include, but are not limited to, primary amino acid analy-
sis, peptide mapping, LCMS (and its variants), CE, CD, NMR, UV, IEF, and PAGE
(normal and denaturing). In many cases, however, there is no direct link between the
data generated and the protein’s overall conformation and pharmacodynamic effect.
Therefore, an in vitro or in vivo biological assay relevant to the mode of action is
required, which may also necessitate supplementary receptor-binding studies. The
testing program must be able to demonstrate both differences and similarities. Data
produced by the comparability exercise must be reviewed and put into context. By the
very nature of the material in question and the processes used to produce it, differences
may arise. Such differences themselves are not the issue, but the ultimate pharmaco-
dynamic impact and overall safety they may confer must be assessed. The answer to
this can lie outside the CMC domain. For some, answers are obtained from biological
testing, but for others, the answers are found in the preclinical and clinical arenas.
CMC comparability is essential to any biosimilar and is absolutely fundamental
in defining the overall development program. However, it must be recognized that a
detailed, comprehensive program necessary to support a regulatory application will
be expensive not only in terms of money but also in terms of key personnel and
resources (a major consideration for smaller organizations). For platform-based
companies looking at numerous biosimilars, the overall costs are multiplied and
will be significant—often beyond the means of all but the most robustly capitalized.
Once a detailed comparability program has been established, based in part upon
preliminary CMC data, regulatory scrutiny should be sought via the EMA Scientific
Advice program. Companies seeking advice will not only validate their approaches,
but will benefit from the regulators’ current thinking on any one product as well.
Smaller companies looking to out-license will particularly enhance their negotiating
leverage by following this proactive approach.
4.3.9 Efficacy Comparisons, Preclinical Safety,

Pharmacokinetics, and Clinical Studies for Biosimilars
Current guidelines adopted in the USA appear to closely mirror the EU guidance
regarding biosimilars.
EMA’s Guideline on the Nonclinical and Clinical Issues to be Considered
for the Development of Similar Biological Medicinal Products (EMA/CHMP/
BMWP/42832/2005) details EU issues and expectations regarding efficacy, safety,

and clinical testing. The requirements depend upon existing knowledge of the refer-
ence biological medicinal product and the claimed therapeutic indication(s) in addi-
tion to reference drug availability and confirmation of that agent’s identity.
Current US guidance (e.g., Q5E guidance on Comparability of Biotechnological/
Biological Products Subject to Changes in Their Manufacturing Process) noted the
differences apparent between biosimilars manufactured by the original manufac-
turer and those developed by a competitor who may not have direct knowledge of
the manufacturing process for the reference product.
Available product- and/or disease-specific guidelines should be followed, acknowl-
edging that the biosimilar manufacturing process will be optimized throughout
development. It is highly recommended that clinical data required for the comparabil-
ity study be generated in parallel with final manufacturing process design to represent
the biosimilar quality profile expected of the commercial batches. The clinical com-
parability exercise is a stepwise procedure that begins with pharmacokinetic (PK) and
pharmacodynamic (PD) studies, followed by clinical efficacy and safety trial(s) or, in
certain cases, PK/PD studies only for demonstrating clinical comparability.
For preclinical and in vitro comparability testing, assays like receptor-binding
studies or other cell-based assays may be available from quality-related bioassays.
Preclinical and in vitro comparability testing should be conducted to determine
comparability in reactivity and likely causative factor(s), if comparability cannot be
established. Animal studies should be designed to maximize information and to
compare both reference and biosimilar intended for clinical trial use. Animal studies
should therefore be performed in species that are relevant to humans and should
employ state-of-the-art technology, ideally monitoring a number of clinically
relevant pharmacodynamic end points.
For toxicology studies, nonhuman primates are likely to be the most relevant spe-
cies for a human protein, but occasionally no species may be relevant. Therefore,
direct reference to the original dossier’s study designs is required for consideration
of species selection. At least one repeat-dose toxicity study containing toxicokinetic
(TK) measurements is expected. These TK measurements should include determina-
tion of antibody titers and neutralizing capacity. These latter factors are most relevant
in the required clinical trial and should be built into the clinical protocol including
isotype characterization. Toxicity study duration should be sufficient to enable detec-
tion of relevant differences in toxicity and/or immune responses between the bio-
similar and the reference medicinal product. If there are specific safety concerns,
these might be addressed by including relevant observations (i.e., local tolerance) in
the same repeat-dose toxicity study. Other standard NCE-based toxicological stud-
ies, such as ICH S7 safety pharmacology, reproductive toxicology, mutagenicity, and
carcinogenicity studies are not usually required for biosimilars unless indicated by
repeat-dose study results, with reference to the original product submission.
Generally, as is the case in the EU and now, the USA, one comparative clinical
trial is required to demonstrate clinical comparability. In certain cases, however,
comparative PK/PD studies between the biosimilar and the reference medicinal
product may be sufficient to demonstrate clinical comparability. Clinical comparability
References 37
margins should be prespecified and justified based upon clinical grounds. As for all
clinical comparability trial designs, assay sensitivity should be demonstrable and
reproducible. If a clinical comparability trial design is not feasible, other designs
should be explored and their use discussed with the relevant regulatory authorities.
Overall, and based upon current experience in the EU coupled with recently
issued US draft guidance, safety data derived from the comparator clinical trial—
focusing on immune response endpoints—are required. However, since the com-
parator trial may not generate sufficient data on long-term safety, the sponsor is
expected to conduct postmarketing (Phase 4) studies to adequately address long-
term safety. Ongoing monitoring of biosimilar clinical safety, including a risk–benefit
assessment, must be conducted in the postapproval phase. The sponsor must provide
a risk specification in the application dossier for the medicinal product under review
in the EU. This should include a description of possible safety issues related to toler-
ability of the medicinal product that may result from a manufacturing process, as
contrasted with the originator, comparator medicinal product. Ultimately, during the
authorization process, the applicant is expected to present a risk management
program/pharmacovigilance plan in accordance with current guidelines.
In conclusion, the issues outlined in this article that pertain to biosimilar testing
currently required in Europe have influenced the draft guidance biosimilar approval
testing requirements in the USA. It is unknown when the draft guidances in the USA
will be finalized.
4.3.10 Summary
• CMC comparability remains the cornerstone of establishing an overall

development package for biosimilars.
• Direct chemical comparison remains essential. In any comparability exercise,
individuals experienced in proving quality are as essential as those proving safety
and efficacy.
• The development of biosimilars will become more focused as further advances
in analytical techniques are achieved, and understanding of the relationships
between molecular structure and function is improved.
• With improved scientific insight, our development of biosimilars may reach a
position analogous to that of generic synthetic chemical entities.
• It is imperative that companies contemplating biosimilars consult with respec-
tive regulatory authorities early in the process to obtain buy-in for the strategic
development plan.
References
1. Chance, K. The US Approval Pathway for Biosimilar Products. RAPS Regulatory Focus
15:10:34–36, 2010.
2. Biosimilars: Regulatory Update (Key updates in the US, EU and India) Datamonitor reference
code: HC00149-004, December 2011.
3. Patient Protection and Affordable Care Act. FDA Web site. http://www.fda.gov/downloads/Drugs/
GuidanceComplianceRegulatoryInformation/UCM216146.pdf. Accessed 28 September 2010.
4. Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price
Competition and Innovation Act of 2009, Draft Guidance, February 2012; FDA Web site: http://
www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm259809.htm.
5. Scientific Considerations in Demonstrating Biosimilarity to a Reference Product, Draft
Guidance, February 2012; FDA Web site: http://www.fda.gov/downloads/Drugs/Guidance
ComplianceRegulatoryInformation/Guidances/UCM291128.pdf.
6. Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product, Draft
Guidance, February 2012; FDA Web site: http://www.fda.gov/downloads/Drugs/Guidance
ComplianceRegulatoryInformation/Guidances/UCM291134.pdf.
7. Huml RA, Chance K, Howe KD, Hicks PE, Tonkens RM. Follow-on Biologics in the EU and
US, RAPS Focus, Vol. 13, No. 1, January 2008, pp9–13.
8. Huml RA, Hicks PE, Chance K, Howe KD, Tonkens RM. CMC, Preclinical and Clinical
Considerations for Biosimilars and Follow-on Biologics, RAPS Focus, Vol. 13, No. 1, January
2008, pp20–23 and 26–27.
Chapter 2
Overall Perspective of Due Diligence
Investigations and Processes
1 Experience of Risk-Based Transactions
Risk-based transactions are rapidly becoming more popular methods of delivering

innovative partnering solutions to customers. As a result, CROs and CSOs now add
partnering solutions to their list of client options in addition to the more traditional,
contract-awarded business transactions such as study start-up, site management,
safety surveillance, data management, biostatistics, regulatory, medical writing,
commercial consulting, brand solutions, and sales forces. Partnering solutions have
evolved from simple fee-for-service transactions. They are offered to pharmaceuti-
cal companies and start-up biotechnology companies and represent a growing
trend that includes straightforward arrangements such as milestone payments (as
products increase their net present value along the drug development value chain),
royalty payments (usually as a return mechanism for a partner taking risk on co-
development/registration), sales force dedication (e.g., sales representatives, nurse
educators, or those who manage sales forces), and co-development (expertise, capi-
tal, or a combination of each) solutions or more complicated solutions such as “fixed
price” contracting. Fixed price contracting involves a relationship between a spon-
sor and a contracting entity—such as a CRO—that offers services based on factors
such as recruitment or other operational milestones (e.g., last patient enrolled) tied
to a particular time point (e.g., number of months or even to a particular date). These
solutions can be attractive to sponsors, but must be carefully evaluated in order to
make sure that the supplier can deliver and manage the contract in order to make the
relationship a “win-win” for each party.
These opportunities represent a paradigm shift from the historical sponsor/client/
CRO/CSO relationship to a partnering relationship based around a product or port-
folio at various stages of development. Such solutions are a response to pressures on
the pharmaceutical industry—some of which are caused by increased scrutiny on
health care costs, country specific risk/benefit analyses [e.g., assessments by bodies
such as the UK National Institute for Health and Clinical Excellence (NICE)], and

40 2 Overall Perspective of Due Diligence Investigations and Processes
patent cliffs. Many larger companies, due in part to mergers, find themselves with
too many products to advance and not enough capital or other resources to move
them forward effectively. Partnering opportunities for strategic (or “the right”)
products can offer a powerful incentive to develop creative solutions to maximize
their value—or just as appropriately, abandon (e.g., “no-go”) the drug in the most
efficient manner.
Each solution can be tailored towards the unique needs of a particular client and
should be crafted in an objective manner in order to eliminate business conflicts of
interest. Although beyond the scope of this brief, it is just as important to effectively
manage each relationship after a deal is signed. This is usually under the direction
of an Alliance Manager, who takes into account the ever changing CI environment
and potentially re-negotiates the deal, as needed.
The key difference between the more traditional fee-for-service construct and the
new partnering solution is that both parties now have a material stake in the perfor-
mance of the product. Therefore, a thorough review of the product by the CRO/CSO
is a critical step in evaluating the partnership, identifying risks, defining the terms of
agreement, and managing the partnership (to the satisfaction of each party) until
completion of the contract.
2 The Process of Due Diligence
Due diligence is the process of investigating an investment or partnering opportu-

nity to mitigate risk. Due diligence includes a thorough investigation of all available
data—both proprietary and nonproprietary—by a team of experts with the intention
of predicting future events, such as the probability of success and a forecast of sales,
in order to equip a deal team to manage risk and execute a financial transaction. All
VCs and investment arms of companies perform due diligence prior to investing
money in a deal or getting involved in a partnership arrangement.
A pleader is identified for the due diligence (DD) team (which assimilates CI
throughout the investigation) and this person—with guidance from upper manage-
ment—determines the budget and sets timelines for the due diligence process.
Nonproprietary materials are reviewed, and a CDA is signed in order to obtain access
to proprietary materials. During internal meetings, specific key team members work
to identify potential weaknesses that might develop into deal-breaking problems.
Timelines for the due diligence process typically proceed along the following
course:
• After a potential partner is identified, preliminary due diligence team members
develop a forecast to generate discussion around deal terms.
• The outline deal terms are agreed.
• An information requirement list is sent to the potential partner.
• A core due diligence team is assembled (external consultants can be utilized, if
necessary).
Reference 41
• Information is generated from internal sources (e.g., data mining sources such as
ADIS, confidential source files) or primary research (e.g., opinion or thought
leader interviews).
• A detailed functional review is then completed which often includes one or more
on-site meetings to review the following areas: (1) regulatory; (2) sales; (3) mar-
keting; (4) preclinical; (5) biopharmaceutics; (6) clinical; (7) medical; (8) chem-
istry, manufacturing, and controls (CMC); (9) commercial manufacturing and
distribution; (10) finance; and (11) legal issues.
• This input leads to a refined sales forecast and risk assessment.
3 Outcomes of Due Diligence
Possible outcomes of due diligence rely on a thorough knowledge of national and

global regulatory requirements and can include the following:
• Confirmation that the proposed strategy is appropriate.
• Re-evaluation of investment, price, or return.
• Re-negotiation of key terms/contractual language or introduction of new terms.
• Amendment of regulatory strategy.
• Abandonment of the transaction.
Although teams generally consist of a team lead with members from other mul-
tifunctional areas and may vary with each potential deal, regulatory professionals
should always be included in the DD process. Knowledge of the regulations, com-
bined with a thorough knowledge of clinical drug development and the competitive
environment, is essential for every partnering solution.
For the purpose of this brief, we will focus on the regulatory portion of the
detailed functional review from a US perspective.
Reference
1. Huml, RA. 2003, The Process of Due Diligence from a Regulatory Perspective. RAPS Focus
Vol. 8, Issue 11, pp 50–53.
Chapter 3
The Regulatory Functional Review:
Primary Roles
1 Introduction
Regulatory affairs professionals are expected to provide an overall assessment of

product information in the following areas: (1) US and applicable foreign regulatory
affairs; (2) preclinical information; (3) clinical information; (4) CMC and Supply
Chain information; and (5) commercial information related to the actual product
profile. The actual product profile includes weaknesses, in contrast to the package
insert (or summary of product characteristics in the EU) which is, to some extent, a
regulatory negotiated document and may not reflect all of the weak points associ-
ated with a particular drug, biologic, or device.
The regulatory professional will review the study design and the clinical plan for
regulatory approval, and ensure that it will support the indications under consider-
ation within the timelines described and in populations acceptable to the relevant
regulatory agency.
Typically, more than one regulatory affairs professional may be required to
review and evaluate all of the materials and topics. These individuals must possess
excellent communication and analytical skills, exude professionalism, and have a
demeanor and attitude that fosters thoroughness, accuracy, and attention to detail.
Whether during the preliminary review or on-site, it is better to review too much
information, rather than too little. If the information is ultimately deemed not action-
able, it can be discarded.
Multiple deals may be under consideration at any given time before a successful
partnering agreement is made and time commitments for regulatory affairs profes-
sionals vary with the extent and magnitude of each deal.

44 3 The Regulatory Functional Review: Primary Roles
2 Transaction Types
The role of the regulatory affairs professional varies according to the type of deal
under consideration. The demands of a transaction for an in-line brand are very
different from those for a product in development or one that is to be acquired or
licensed. In general, as the level of risk increases, for example, from co-promotion
to co-marketing (i.e., increased liability issues), the level of complexity and exper-
tise required of a regulatory professional increases.
3 Time Commitment
From my experience, personal time commitment for deals generally require at least
1–2 weeks of preliminary background information retrieval and review, 2–3 days of
on-site review, 1–2 weeks to write reports and address other team member concerns,
and 4–8 h of meetings and teleconference time. Teams are generally mobilized
quickly, demand 100% of a regulatory professional’s time, and require travel. Many
deals are considered at a moment’s notice and may require the attention of the regu-
latory affairs professional for several weeks—or longer.
Larger deals, such as the $325m deal between Eli Lilly, TPG-Axon, and Quintiles
regarding Lilly’s gamma secretase small molecule and antibody targeted against
A-beta for the treatment of Alzheimer’s disease, took the author over 20 months
from initiation to execution [1]. Smaller deals, such as small direct equity invest-
ments ($1–5m range), have taken the author several weeks to investigate and exe-
cute. It should be noted that these timeframes do not take into account the multiple
year maintenance of such transactions, which is usually conducted under the direc-
tion of a dedicated Alliance Management Professional.
Reference
1. Huml, RA. A Novel Investment Partnering Solution for Sharing Development Risk, RAPS
Focus, Vol. 13, No. 12, December 2008, pp40–41.
4 Output and Expectations
Open communication between team members on potential “show stopper” issues is

important. Therefore, attendance at all meetings and teleconferences is imperative.
The regulatory professional must provide a written summary of his findings to the
project leader, team, and upper management that includes a summary of possible
4 Output and Expectations 45
labeling restrictions or improvements. The regulatory professional is expected to

qualify the likelihood of success for a given scenario (e.g., time to market approval,
costs to be incurred,1 probability of success and timelines), as well as identify issues
that could affect product positioning. This is why a complete understanding of the
competitive environment is very important. How the regulatory affairs professional
can gain an understanding of this environment is the next topic of discussion.
1
Ballpark trial costs are usually provided by the potential partner, but can be verified/obtained from
a qualified contract research organization. It is important to be aware of all trial costs, including
costs attributed to the investigators.
Chapter 4
The On-Site Due Diligence/Data Room
Meeting and Interactions with Other
Functional Area Experts
1 Preparation
Multiple tasks must be performed by the regulatory professional before the critical
on-site due diligence meeting occurs in a private data room. Due diligence typically
occurs in a secured data room format because the intellectual property (IP) is
highly confidential, though, with the advent of virtual data rooms (VDRs [1]), IP is
frequently shared before a formal data room exercise and can bring the entire due
diligence process forward.
Tasks include review of all information provided by the potential partner, literature
searches, and attendance at all internal and external team meetings. Team meetings
may also include updates to third-party capital providers or their representatives.
In order to make sure that predefined concerns are addressed while on-site, a list
of action items and/or checklist(s) should be created.
A review of the materials provided by the potential partner may include market-
ing materials (brand plans, competitor information, primary or secondary research,
Gantt charts, etc.), regulatory correspondence (both USA and non-USA), investiga-
tor brochure (IB), preclinical and clinical study reports, published literature, inves-
tigational new drug application (IND), completed internal study reports, chemistry,
manufacturing, and control (CMC), and supply chain materials, and possibly por-
tions of a new drug application (NDA). Background information from potential
partners is often promotional and generally considered biased. The regulatory pro-
fessional may not have direct access to the potential partner, but, if not, can also
request materials through the due diligence team leader.
The groundwork process should include a review of the company’s Web site for
news releases, overview of the publically available information about the product,
and an overview of the history of the product. Although potentially biased, useful
preclinical and clinical information not available elsewhere may be obtained in this
manner. A layman’s review of new technology (e.g., novel delivery systems) or
the use of a device can also sometimes be identified. For example, for some 510(k)
or PMA-type devices, sponsor companies often have short videos which can be very

48 4 The On-Site Due Diligence/Data Room Meeting and Interactions…
helpful in understanding the use of the device in a real-time setting (or possibly a
cartoon-like representation for demonstration purposes only). News releases are
often posted on a company’s Web site and may provide competitive information.
The regulatory professional should identify regulatory, safety, efficacy, and com-
petitor concerns supplied in the data from the potential sponsor, news releases,
thought leaders, or the regulatory agency (e.g., FDA).
Summary basis of approval (SBA) for other approved competitor drugs should
be obtained in order to gain a good overview of the market. In this manner, the regu-
latory professional can gain insight into the Agency’s thinking about a particular
topic. It is more difficult to obtain information about a product whose labeling has
not been approved.1 Note that some SBAs may take months to obtain, even though
a Freedom of Information (FOI) Act request has been made, and therefore, be
unavailable for review at the time due diligence efforts are undertaken.
Information not available from the client may be found elsewhere. Other sources
of information typically include literature searches, information obtained via the
FOI Act, Web site searches, information available in-house, and most important,
competitor information. Since the regulatory professional’s reviews and findings
are confidential, they should not be discussed with non-authorized personnel.
Literature searches, at a minimum, should include the FDA Web site, physicians’
desk reference (PDR), ToxNet, and a peer-reviewed literature Web site such as
PubMed or MicroMedex. Regulatory Web sites, such as the Regulatory Affairs
Professional Society (RAPS) and Regsource can also yield important regulatory
information. Some Web sites offer invaluable information, but involve a monthly or
yearly fee, such as ADIS (for business and clinical updates), IMS Health (for geo-
graphic prescription sales data), and DataMonitor Reports (for overviews of thera-
peutic areas and pharmaceutical hot topics in a business setting). Below are some
useful Web addresses:
• FDA Web site (http://www.fda.gov/default.htm).
• Physicians’ desk reference (http://www.pdr.net/).
• ToxNet (http://toxnet.nlm.nih.gov/).
• PubMed (http://www.ncbi.nlm.nih.gov/pubmed/).
• MicroMedex (http://www.micromedex.com/).
• RAPS (http://www.raps.org/).
• Regsource (http://www.regsource.com/).
• ADIS (http://www.wolterskluwerpharma.com/).
• IMS Health (http://www.imshealth.com/portal/site/imshealth).
• DataMonitor Reports (http://www.marketresearch.com/vendors/viewVendor.
asp?VendorID=72).
• Clinicaltrials.gov (for USA: http://www.clinicaltrials.gov/).
1
Technically, the FDA approves the label, not the product itself. No drug/device/biologic, how-
ever, can be marketed in the USA without FDA-approved labeling.
2 The Virtual Data Room 49
Regulatory issues may surface, and correspondence between the drug/device

company and the FDA (e.g., FDA correspondence, Advisory Committee Meetings,
and warning letters) may be available for review via the FDA Web site. Peer-
reviewed literature searches may provide clues about the efficacy or safety of a
product. While clinical trial information is frequently published, especially during
the past 5 years, preclinical information is usually not published, but may possibly
be found as an abstract at a large convention for a particular therapeutic area
[e.g., the American Society of Clinical Oncology (ASCO) annual meeting]. It is
helpful to review literature about other drugs in the same class, especially if little
information about the drug in question is available.
For a quick overview of the patent situation, it is worth reviewing the FDA’s
Orange Book (http://www.accessdata.fda.gov/scripts/cder/ob/default.cfm), which
is usually current to within 2 months (i.e., there is a 2 month time lag between
posted items and the current month). For additional details regarding IP, please see
Chap. 5.
2 The Virtual Data Room
Pharmaceutical and biotech companies, strategic partnering divisions of contract

research organizations (CROs), and investment firms are entering into alliances and
joint ventures at an ever-increasing pace. As the incidence of these product-based
investing transactions increases, so does the number of hours and resources
needed to conduct due diligence. In an effort to trim escalating due diligence costs
and reduce transaction time, companies are increasingly using electronic databases
and VDRs to allow access to confidential information simultaneously by multiple
users and to permit central version control. This section discusses why these virtual
tools are gaining popularity and explains some of the reasons they cannot deliver
the complete answer to streamlining the product partnering, CI, and investment due
diligence processes.
For the purposes of this brief, the potential partner (seller) is the entity owning
the product(s) and/or intellectual property (IP) and desiring capital/resources/addi-
tional IP/etc. The partner (buyer) is the entity conducting the due diligence investi-
gation and considering providing the desired services, additional IP, and capital.
2.1 Types of Electronic Databases
Investing venture capital in pharmaceutical products is risky business, requiring

careful evaluation of the potential investment and/or prospective partner company.
All venture capital firms and company investment arms perform due diligence prior
to investing money or becoming involved in a partnership arrangement. Part of this
evaluation involves reviewing confidential data. This review is typically performed
by an initial electronic transfer (usually via email) of less-proprietary electronic

data followed by a data room visit by a group of experts to view highly confidential
information in hard copy. These experts are usually matched peer to peer, i.e., part-
ner to potential partner.
Two types of electronic databases may be encountered in the due diligence
process. The first is limited to the traditional on-site data room environment where
computers are used instead of hard-copy information. The computers have access to
an internal database [e.g., created by the internal information technology depart-
ment (IT), or vendors such as Documentum and Core Dossier]. Direct access to
electronic documentation in this style is limited by access time and the number and
quality of computers and viewing screens. Although these databases could be
accessed remotely, for purposes of confidentiality, partners are rarely granted such
access.
The second type of database is part of an Internet-based system. A VDR is an
Internet site with limited access that is controlled using a secure logon supplied by
the vendor/authority, which can be disabled at any time. Because most information
is confidential, restrictions are applied using digital rights management to limit the
viewer’s ability to release it to third parties by forwarding, copying, or printing.
VDRs are the focus of the remainder of this section.
2.2 Internet-Based Data Rooms
To address historic concerns regarding travel costs, time constraints of R&D and
commercial experts, and the inability to track data sharing, vendors have created
Internet-based solutions that allow the posting and tracking of an almost unlimited
amount of data (the limitations that do exist are primarily cost-related.). A seller or
potential partner can post selected documents—including clinical data, regulatory
data, commercial data, and intellectual property data—on such Internet-based sites.
Because the posting fee is usually on a per-page basis, potential sellers may wish to
post the minimum amount of data needed to close the transaction. The partner, on
the other hand, usually wishes to see all the data and may request additional docu-
ments to be posted as quickly as possible.
2.3 Advantages
Historically, most documents were viewed on-site or sent via email or postal mail.
While these are still effective means of communication today, such transmissions
are difficult to trace (i.e., files can be printed, copied, or shared) and can be time-
consuming. Also, very large electronic documents often must be broken down into
smaller pieces to permit passage through corporate email filters. The combination of
the highly proprietary and confidential nature of the diligence information and the
lack of control raises issues for sellers.
2 The Virtual Data Room 51
In contrast, electronic databases and VDRs can be quickly populated with

electronic documents by a small number of individuals. Document size can range
from small (e.g., basic business presentations, early discovery findings, platform
technologies, preclinical or pre-IND documents) to very large (e.g., an entire NDA
submission in common technical document (CTD) format). In addition to speed,
these methods offer the ability to tightly control and measure access (i.e., read-only,
no printing, etc.). As such, VDRs have been gaining popularity, especially among
those who work in the pharmaceutical industry’s in-licensing sector.
The benefits of a VDR are weighted more in favor of sellers than buyers. One
key advantage for sellers is simplifying the conduct of the due diligence process by
permitting access to more than one buyer simultaneously. This is especially true for
an outlicensing/auction process. If the seller can use this approach to minimize staff
inconvenience and redundancy, the return on investment (ROI) is justifiable.
VDRs may also have certain other advantages:
• Newer databases have more features for customizing searches for different docu-
ment types.
• Databases are customizable, limited usually only by cost, imagination, and time.
• Electronic databases have the ability to restrict access to key individual reviewers
and decision makers. They can allow access to different areas at different times
depending upon clearance level (i.e., limited vs. full).
• Systems can track and document the amount of viewing time, limit use to read-
only, and prevent printing and saving.
• Smaller firms, usually resource constrained, can use VDRs to save time for exec-
utives who might otherwise spend it on due diligence activities.
• Electronic databases are very efficient and can even trace and juxtapose written
electronic conversations with electronic Q&A sessions so that written docu-
mentation of all issues discussed can be made available and referenced at a later
time.
• In a global industry, remote data access reduces the travel burden.
• Remote data access also allow switch-like control of access to data in different
electronic “rooms” as well as control of timing (e.g., for 1 week only, 8:00 a.m.
to 5:00 p.m. daily).
2.4 Potential Disadvantages of VDRs
Due to the length of the drug development process (often more than 5 years before
reaching Phase 2 or 3) and the use of different vendors, documents usually come
from different sources and often utilize different software programs [e.g., Microsoft
Word, Excel, and PowerPoint, Portable Document Format (PDF)]. Thus, it may be
impossible to cross-search and view multiple documents at the same time.
As stated previously, the benefits of a VDR favor the seller, not the buyer. The
seller can make it difficult for buyers to have the same access to documents and
discuss them with the same information at hand. Limiting or preventing printing
means a computer is necessary to view the documents. Sellers can also eliminate the
ability to download documents, thereby complicating buyer team collaboration.
Other disadvantages may include:
• VDRs reduce the time for face-to-face interaction. This can hinder the line of
thinking or questioning between seller and buyer that often generates additional
questions from different functional area experts. It is the author’s experience that
a back-and-forth question-and-answer session—involving multiple functional
experts from both sides—often quickly identifies the real issue behind an issue,
e.g., dosage change or problem identified in FDA meeting minutes that might
otherwise require more time-consuming and less-spontaneous interaction.
• A “gatekeeper” must be assigned to ensure that documents are controlled and
posted in a timely manner. This can entail special passwords and sometimes
provides the impetus for potential partners to require every individual who views
the confidential documents to sign a CDA, as opposed to one signature for the
entire team, making the process cumbersome for the buyer’s due diligence
team.
• Physically, it is difficult to review electronic documents for prolonged periods of
time. Prolonged computer screen viewing can lead to eye, neck, and back strain,
and fatigue.
• Despite advances in technology, difficulty persists in comparing information
between disparate formats (e.g., searching Word, PDF, and PowerPoint files at
the same time).
• VDRs can include real-time question-and-answer periods via virtual chat rooms;
however, potential sellers tend to discourage this because personnel need to be
made available for such discussions. Online chat can provide immediate feed-
back and group interaction, but lacks the opportunity to read nonverbal clues (see
the next step).
• VDRs limit nonverbal assessment. For example, since most communication
(more than 60%) and meaning is expressed not in words, but, rather, through
gestures, expressions, and body language, it may be more difficult to gauge the
ability of a seller’s management team to deliver on a future clinical drug develop-
ment program.
Involving legal counsel to review documents with possible redaction may be a
burdensome process with electronic records. For instance, some privacy laws may
limit information that may be included about the potential partner’s employees.
3 Summary
VDRs are growing in popularity and can provide a useful adjunct to due diligence
activities. They can be a central repository for confidential data. VDRs can also
offer controlled access to data outside a physical data room environment and allow
4 The On-Site Data Room Meeting 53
potential partners increased flexibility. Despite their advantages, VDRs cannot

substitute for face-to-face or group interactions that allow immediate feedback.
They are biased in favor of the seller due to cost savings gained by avoiding the
need to run through the due diligence process individually with a number of buyer
companies.
Reference
1. Huml RA. The Pros and Cons of Using Virtual Data Rooms for Due Diligence, RAPS Focus,
Vol. 13, No. 6, June 2008, pp43–45.
4 The On-Site Data Room Meeting
It is advisable to arrive at the data room with a previously compiled list of action
items for review on-site. Different approaches exist for generating these action
items. These may include consulting FDA guidance documents, therapeutic area
specific checklists, or published checklists. Checklists help the regulatory profes-
sional make the best use of his time while on-site and to insure that no important
item identified during the preliminary review is overlooked. Each checklist should
be tailored for each unique potential deal. For additional details regarding check-
lists—as well as templates for selected functional areas of expertise, see the publi-
cation by the author entitled, Introduction to the Due Diligence Process, ISBN:
0-9787006-4-3, available from www.Amazon.com.
An action item list provides a subjective benchmark for completion of the regula-
tory review while on-site (e.g., 80% complete vs. 10% complete). Not all informa-
tion that the regulatory professional seeks may be available or, if available, be
physically able to transcribe in the time allotted at the on-site review, so, on occa-
sion, a follow-up visit may be warranted.
During the on-site regulatory review, the regulatory professional should alert
other team members covered by an appropriate confidentiality agreement of any
regulatory concern (e.g., biopharmaceutics, medical, and marketing) as soon as it is
identified. The regulatory professional should review all available information,
request information not available, and follow the action item list to the best of his
ability while still being flexible and open to discovery of other potential regulatory
issues or NDA “show stoppers.”
The regulatory professional should generate an index of the documentation to
insure completeness and to prevent delay in getting data from another site.
Frequently, upper management and third-party capital providers will also request
that all findings be ranked in order of importance so that an overall determination of
risk (e.g., likelihood of regulatory approval) can be made by the team, often by
consensus, but it may also be at the sole discretion of the project leader.
5 Requests of the Potential Partner
The entire due diligence team should work in the same room while on-site and
should take periodic breaks in order to summarize their individual findings and to
alert other team members to potential key findings.
While on-site, the team should perform the following tasks in conjunction with
the potential partner:
• Determine what support staff will be available to assist with the document search
and to answer questions.
• Determine what data can be taken away from the data room for examination off-
site.
• Specify electronic data formats, if possible, in order to simplify searching for key
words.
• Assure availability of research and development staff and regulatory personnel.
• Request detailed analyses of all ongoing clinical trials, timelines, recruitment
rates, flow charts, budgets, and dates of planned and/or scheduled meetings with
regulatory agencies to assess whether: (1) ongoing trials are proceeding well; (2)
clinical trial protocols identify the appropriate end points to support products use
for planned indications; (3) the quality of the CRO’s work is adequate and the
data generated are reliable; and (4) the sponsor is exercising sufficient
oversight.
• Request copies of existing licenses for marketing authorization.
• Request copies of all relevant periodic safety updates and serious adverse events,
especially expedited reports.
• Request copies of the internal safety summary held by the company for relevant
product(s).
• Obtain copies of Institutional Review Board (IRB) approval(s).
6 FDA Correspondence
All official and unofficial FDA correspondence should be reviewed. Unofficial cop-
ies of meeting minutes should be considered biased and may not reflect the wording
or intent of the Agency. Key dates can help the regulatory professional follow the
progression of the potential partner’s drug development program and should be
recorded. This is especially helpful if the product has been through multiple spon-
sors’ hands or if multiple players are tied to the product contractually or through
geographic ownership. For the last point, it is common to review a product for a
product-based deal in one geography (e.g., the USA or North America only), but the
sponsor of the product may not have exclusive rights in all geographies (e.g., EU,
Japan, or ROW). Due to the global nature of drug/device development (e.g., regard-
ing patient recruitment cost and regulatory risk), it is also possible that a product
may be in different stages of development in different geographies. In these cases,
8 Chemistry Manufacturing Controls Information 55
even if a potential partnering arrangement may be in the USA, it is useful to the

regulatory reviewer to review regulatory agency feedback from another geography.
While not superimposable, regulatory thinking from ICH-compliant countries (USA,
EU, and Japan) is often similar and can provide useful feedback to the deal team.
Minutes of key FDA meetings can yield important information as to agency con-
cerns. Examples of such meetings for drugs include the Pre-IND meeting, the end of
Phase 2 meeting (EOP2), special FDA meetings (typically Type A or B, possibly C),
and Carcinogenicity Assessment Committee (CAC) meetings. Similar types of meet-
ing for biologics are available for the eventual BLA submission. For devices, consider
the pre-501(k) meeting—to ascertain the predicate device and to confirm that CDRH
is the correct division to review the proposed submission—and PMA-associated
meetings to gain clarity on the clinical development required for registration.
7 Preclinical Information
A thorough review of all available preclinical information is critical to the due dili-
gence exercise. While beyond the scope of this brief to discuss all of the key items
to consider for pharmaceutical due diligence from a non-clinical perspective [1], it
is important to note the following. A review of the SBA information regarding com-
petitor products may be helpful in order to understand the preclinical development
program. A literature search may be useful to obtain information on the active
ingredient(s) and even excipients. The regulatory professional should have a thor-
ough understanding of ICH requirements for preclinical testing. During a recent
FDA Google Web site search, the author discovered that many products have not
conducted preclinical testing as required by ICH, so that a review of the potential
partner’s clinical testing is critical. For example, cardiovascular drugs will now be
scrutinized at the preclinical phase for QTc prolongation signals. For an updated
overview of cardiac safety, please see FDA regulatory guidance and consider the
recent summary provided as Case Example I described earlier in this brief.
Reference
1. Hicks PE, Huml RA, Howe KD. Key Items to Consider for Pharmaceutical Due Diligence from
a Non-Clinical Perspective, RAPS Focus; Vol. 11, No. 11, November 2006, pp32–43.
8 Chemistry Manufacturing Controls Information
The CMC process can play a rate-limiting role in the overall development strat-
egy for a therapeutic product and is therefore an essential component of the due
diligence effort. The goal of this review is to identify deficiencies within the
manufacturing process, which could cause non-approval or delay drug launch.

The review should ensure that proper good manufacturing process compliance
(cGMP) was followed for preparation of the drug substance throughout the man-
ufacturing process.
The CMC review can proceed even if cGMP processes were not followed, but
may be a show stopper for drug substance (DS) and drug products (DPs) that do not
comply with regulations (e.g., products made in non-ICH countries without follow-
ing cGMP guidelines). In addition, CMC risk may be deemed unacceptable for
products that have been manufactured at plants that have never been inspected by
regulatory authorities (e.g., FDA or EMA).
Potential partners are often hesitant to release proprietary information regarding
formulation development or manufacturing processes before the on-site due dili-
gence visit. Therefore, the regulatory professional typically evaluates data and
information for the first time upon arrival at the data room during the on-site visit.
It is possible that information regarding drug substance is referenced to one or more
drug master files (DMFs), making this information unavailable. In this case, the
regulatory professional must rely on the regulatory correspondence to ensure that
no flags regarding DMFs have been noted.
To expedite the review, a comprehensive CMC checklist should be developed
and incorporated into the general data room checklist. Incorporating the major cat-
egories of the CMC section of an NDA/CTD in this CMC checklist is a strategically
sound approach. Familiarity with appropriate guidelines is helpful and can provide
assistance when developing such a checklist.
The regulatory professional should thoroughly review stability data including
storage conditions, retest periods, and defined acceptable shelf life, as these data are
important in determining labeling requirements. Other key areas to evaluate are
purity/impurity profiles, degradants, analytical methods, reference standards, and
the overall completeness of the manufacturing process. If a novel drug delivery
system is utilized, careful evaluation of the system and the manufacturing processes
will be necessary. Regulatory professionals should never take anything for granted
while performing the CMC review. Even equipment maintenance history logs and
employee-training records are within the purview of a thorough CMC review.
9 Clinical Information
Regulatory professionals can usually obtain general and publically available infor-
mation from published clinical trial data, usually Phase 2 or 3, from other literature
sources, or from the client; however, the latter information may often prove quite
selective and biased. It is very rare that individual patient data are reflected in the
literature, making it impossible to see faint signals/trends or ascertain whether certain
lab values reflect a problem (e.g., Hy’s Law cases). Hy’s Law is a prognostic indica-
tor that a pure drug-induced liver injury (DILI) leading to jaundice, without a hepatic
transplant, has a case fatality rate of 10–50%. The law is based on observations by
10 Commercial Information 57
Hy Zimmerman, a major scholar of DILI. Although beyond the scope of this brief,
Hy’s Law is defined by the US Department of Health and Human Services, FDA,
Center for Drug Evaluation and Research (CDER), and Center for Biologics
Evaluation and Research (CBER) in their final document of 2009 Guidance for
Industry Drug-Induced Liver Injury: Premarketing Clinical Evaluation.
Detailed information from any clinical trial is usually only available at the on-
site due diligence meeting or through clinical study reports or sections of an NDA/
CTD. The regulatory professional should liaise with the Medical Team Member,
usually a physician, preferably a physician trained in the particular therapeutic area
under review, to make sure that all available clinical information is adequately
reviewed. Any potential safety signals should be brought to the team’s attention
with special emphasis on AEs, frequency of AEs, SAEs, patient discontinuations,
and patient deaths. This is especially important for novel drugs, new chemical enti-
ties (NCEs), and novel delivery systems.
The regulatory professional must work closely with the medical team member to
ensure that efficacy, quality, and safety are thoroughly reviewed. By quality, and for
purposes of this brief, it is important to note that the drug formulation process usu-
ally changes throughout the clinical development program, and this means that all
doses that the patients were exposed to, including the final formulation, should be
thoroughly scrutinized in light of the broader clinical picture.
The clinical information should be evaluated to ensure that: (1) adverse events are
reported for all clinical trial subjects who have been exposed to the molecule(s) and
(2) the informed consent and recruitment methods adequately protect patient safety.
10 Commercial Information
Once the regulatory affairs professional, working with a team of other functional
area experts, has determined the actual product profile, he/she can then begin to
compare the product, whether small molecule, biologic, or device, to the competi-
tion. One useful way is to compare package inserts in the USA or the Summary of
Product Characteristics for products in the EU. The goal of this exercise is to deter-
mine the differentiators—those characteristics that would sway a patient, physician,
or payer to utilize one product over another. The more crowded the market, the more
weight will likely be given to small differences. For “me-too” products in a large
class, for example, overactive bladder (OAB) treatments, small differences in each
product’s AE profile may be the biggest CI factor to consider—given all other
parameters are equal.
For illustrative purposes only, see Table 4.1 below. Thus, for the OAB example,
which is composed primarily of antimuscarinic tertiary amines, the incidence of
dry mouth or its ability to penetrate the blood–brain barrier (BBB) may prove to be
elements in choosing one product over another.
Given different histocompatibility complexes among humans, and genetic
differences among individuals in different populations, one OAB product (or allergy
58
Table 4.1 X—hypothetical competitor highlights for Brand X (comparison of competitors to Brand Y—the market leader)
Competitor Competitor Brands vs. Brand Y—
brand name generic name Dosing Highlight(s) of each brand the market leader
Brand 1 (EU) Product 1 Once daily • Possible use in irritable bowel syndrome (IBS) • 5 mg dose has lower
• Linear PK with long half-life incidence of dry mouth
• No polymorphic P450 metabolism • Two doses available (i.e.,
• Not for use in pediatric patients 5 mg and 10 mg vs. Brand Y,
• Dry mouth (Phase 3s); 5 mg (10.9%); 10 mg 4 mg)
4
(23–33%)
Brand 2a (USA)/ Product 2 Once daily • Warning time measurement utilized in clinical • Warning time measurements
Brand 2b (EU) trials not utilized in clinical trials
• Studied cognitive function • Comparable antimuscarinic
• Two doses in EU (8 and 16 mg) safety
• Dry mouth (Phase 3s); 7.5 mg (21%); 15 mg
(33%)
Brand 3 (EU) Product 3 Twice daily • Novel mechanism of action (MOA) • Additional indications likely
• Only drug approved for use in urge inconti- in future, including mixed
nence patients and stress urinary incontinence urinary incontinence (UI)
(SUI) patients • Depression indication;
• Antidepressant AEs include negative effect of precautions/warnings
sexual dysfunction (i.e., erectile dysfunction, contains bolded text: (1) re:
ejaculation dysfunction) for use with MAOIs and
• Incidence of dry mouth in US PI: 16% (2) suicide risk in US PI
• Comparable antimuscarinic
safety (note: lower incidence
of constipation at 7.5 mg dose)
Brand 4 (UK) Product 4 Once daily • 5 and 10 mg tablets available • Better efficacy vs. Brand Y
• Not for use in pediatric patients • Inferior antimuscarinic safety
• No food effect
• PK may be altered by inhibitors of CYP3A4
• Dry mouth: “greater than 10%” per EU SPC;
The On-Site Due Diligence/Data Room Meeting and Interactions…
exact figure not quoted

10
Brand 5a (USA)/ Product 5 Patch to be applied • Bypasses first pass effects in the liver • Similar efficacy compared
Product 5b (EU) —Transdermal twice weekly and the gut with Brand Y
patch • Applications site reactions approximately 25% • Comparable antimuscarinic
• Dry mouth from US PI: 5–10% safety
• Better incidence of dry mouth
Brand 5c (USA and Product 6 Once daily with • Has pediatric indication • Better efficacy vs. Brand Y
immediate tablets to 2–3 • Flexible dosing with 1, 2.5, and 5 mg tablets • Inferior antimuscarinic safety
release formula- times daily with • Studied in neurogenic bladder disorders
tion in EU) and syrup • May add neurogenic detrusor hyperreflexia
Commercial Information
Brand 5d XL to pediatric indication

• Brand 5c dry mouth: 70%
• Brand 5d dry mouth: 55%
Brand 6a (USA)/ Product 7 Twice daily • Food effect • Less desirable than once daily
Brand 6b (EU) • CNS effects unlikely as it does not cross the formulation
BBB • Efficacy and safety
• Working on a once daily formulation comparable
• Working on a pediatric indication as part of a • No patent protection
US pediatric commitment • Better tolerated than Brand 5
• Dry mouth: 20% • Possible pediatric indication
in future
• Low oral absorption and
bioavailability
Note: a patch formulation of Brand Y is currently in development
59
product) may work slightly differently in one person compared to another, and
given similar safety profiles and little or no risk associated with the product, a
patient—under direction of a physician—may take several products until he/she
finds one with an acceptable risk/benefit profile.
Once the regulatory affairs professional—in conjunction with the commercial
expert—has determined the key differentiators of a particular product—it is time to
review and test these assumptions in the real world.
11 Secondary Research
While not under the purview of the regulatory affairs professional, a key under-
standing of basic secondary market research is critical to understanding the poten-
tial success of a product in the global markets.
The basic line of questioning begins with a simple question—“what is the current
market?”
Epidemiology databases, such as the US Centers for Disease Control and
Prevention’s database, provide a good overview. For an actual determination of the
market (e.g., what are the sales of a product or class of products?), IMS Health data
provide detailed sales information for products with similar products in the market,
including me-too products for use as surrogates and benchmarks. For novel prod-
ucts for which there are no surrogates, it is more difficult to predict sales. In general,
the market analytics expert will try to identify a surrogate based on similar market
dynamics on which to base future sales projections.
After the current market is determined, the next question is, “what is the compe-
tition and how will it change over a given period?”
The best place to determine potential competition is www.clinicaltrials.gov. Due
to recent regulation changes, all clinical trials are required to be posted on this Web
site. While beyond the scope of this brief to discuss all of the rules related to disclo-
sure, it is important to note that there are federally mandated rules that govern such
disclosures as inclusion and exclusion criteria which can guide the market analyst
to determine factors such as: which studies are being conducted, estimates on tim-
ing for study read-outs, the next inflection point in the drug development paradigm
for that product (e.g., Phase 1 to Phase 2, Phase 2a to Phase 2b), and the patient
population (may not contain full inclusion and exclusion criteria).
The patient population will help determine the potential wording in the label or
package insert (e.g., first or second line therapy, refractory setting).
It is also useful to review or participate in a therapeutic area Congress. Examples
include the annual meetings of groups such as the American Society of Clinical
Oncology (ASCO at http://www.asco.org/), the American Association of Cancer
Research (AACR at http://www.aacr.org/), and the European Society for Medical
Oncology (ESMO at http://www.esmo.org/). These events can help determine a
more complete clinical picture (in an almost real-time setting) of what is occur-
ring in that particular therapeutic area. These arenas allow a regulatory affairs
12 Primary Market Research 61
professional conducting CI to scour poster data that may not end up in a publication
while still obtaining an early “read” on the outcomes—both safety and efficacy—of
a clinical trial. For example, with oncology trials, there is much interest in response
rate (RR), overall survival (OS), etc. Note that it is important to notice the absence
of data as well. If a trial has ended, and there are limited data or no data at all, or
data that are displayed are from post hoc analyses, this information also gives clues
about the trial’s success.
Additionally, it is important to conduct a review of the published literature. For
large companies, it is relatively easy to do and library resources—for a negotiated
fee—can obtain this literature quickly and completely.
One drawback to obtaining (and looking for) CI is that, for top-notch peer-
reviewed journals—such as the British Medical Journal or New England Journal of
Medicine, which have major impacts on clinicians and payers—it may take up to
2 years to publish the results of a trial. Also, in the experience of the author of this
brief, individual data are often scant or absent; thus, for clinical trials with small
numbers of patients, it is difficult or perhaps impossible to make some conclusions
surrounding the results of the trials as expressed in the articles.
Finally, to complete a review of secondary research, a final product label com-
parison should be conducted, focusing on those areas that are deemed to have the
largest market impact—or even potential market impact. For example, how many
times a day is the product administered? Are there hurdles to preparation? Does it
need to be given by a physician or nurse or can the product be taken at home? What
is the cost of the product on a time basis (e.g., weekly, monthly, or yearly)?
A comparison of product labels will quickly sort out the key differentiation fea-
tures and is a relatively straightforward exercise for classes of products with lots of
me-too products, but more difficult for NCEs.
Remember that the labels provide information about the patient populations and
evidence regarding the product profile that can be leveraged by the sales representa-
tive. The US Package Insert or Summary of Product Characteristics in the EU
provides the overview for the efficacy and safety tools, measures, and results of the
data used for registration.
When the significance of a differentiation factor is unknown or unclear, one way
to determine the importance of the factor is to test it in the market—as the topic of
primary research. An overview of primary market research is provided below.
12 Primary Market Research
In addition to some classes of drugs having guidelines for use, each practicing
physician will have an opinion about a product’s label that determines how and
when the product will be administered.
These combined physician opinions drive the preference share and ultimately,
the sales forecast. As such, secondary research may need to be bolstered by primary
research.
During the interviews—whether conducted face-to-face or online—key attributes

of a particular product/device/biologic can be tested to see which features are more
or less desirable. Specific characteristics can be identified; however, a generic exam-
ple of a discussion guide for a particular product is provided in Table 4.2.
Table 4.2 Example of a discussion guide for Product X

Thank you very much for agreeing to participate in this research project. As we indicated in previ-
ous communications, the sponsor of this research is considering making an investment in the area
of (therapeutic area identified here) treatment
1. To get started today I would like to gather a bit of information on you
• What is your specialty?
• Are you currently treating (e.g., diabetic) patients? If so, approximately how many
patients do you see per month?
• Are you currently or have you in the past participated in clinical research focused on
(type of treatment)? If yes, what products(s) were being evaluated in the research?
2. Do you have a preferred (type of product) agent?
• If so, why is [X] your preferred agent? Probe on: efficacy profile, side effect profile,
profile of patients who receive X agent, cost, formulary access
• Do you typically use X as a first line agent with all patients?
• In what scenario would you prescribe a different (type of) agent as first line therapy?
Probe on specific patient profile, failure of other specific agents
3. I would now like to talk about the key (type of) agents individually (list other competitor
products by name, e.g., Brand X, Brand Y, Brand Z: are there others that I should probe
on?). (Ask the following questions for each agent)
• What do you see as the distinct advantages of [product]?
• What do you see as the distinct disadvantages of [product]?
• Do you ever experience hurdles to the use of [product]?
• If not mentioned, are formulary restrictions ever an issue with [product]?
4. Are you aware of any of the (list MOA, type of) agents having a unique mechanism of
action?
• If yes, ask MD to describe in his own words why the MOA is unique
• Do you believe this unique MOA translates into clinical benefits?
– If yes, what do you see as the benefits?
– If no, why do you believe there is no unique clinical benefit?
5. As I am sure you are aware, a number of the (brands with same MOA), including Brand X,
Brand Y, and Brand Z have introduced new formulations that provide QD dosing vs. dosing.
Other than once daily dosing what, if any, additional benefits do you believe these
formulations provide?
6. Often, the introduction of an extended release formulation is followed by the entry of an
immediate release generic formulation for the same compound. Historically, what has been
your response to the entry of generic BID formulations that are launched at considerably
lower prices than branded QD formulations?
Probe on:
• Proactively switching patients to generic
• Informing new patients of the availability of the generic option
• Informing existing patients of the availability of the generic option
• Offering the generic option to lower income, indigent or uninsured patients
(continued)
12 Primary Market Research 63
Table 4.2 (continued)

7. In future, what do you see as the most promising compounds that are in development for the
treatment of (list type of treatment)?
• Why do you think [X] has promise? Probe on better efficacy, side effect profile
• If not mentioned, probe on the potential use of Product X as a treatment option for (type
of disease)
– Are you aware of the use of Product X currently for the treatment of (type of
disease)?
– Where does it fit currently in the treatment regimen for (type of disease)?
OR
– Where do you anticipate that it will fit in the treatment regimen for (type of disease)?
8. Are there any other insights regarding the (type of disease) market that you think would be
critical for the sponsor of this research to be aware of?
Time-consuming, costly, but very valuable, primary research includes key

opinion leaders (frequently physicians, may be M.D./Ph.D.’s, may frequently give
talks and publish to disseminate their opinions), or payers (within various govern-
ment and nongovernment businesses that sway the way products are used and
reimbursed). Shorter, quicker reads include Internet surveys [e.g., Gerson Lehman
Group (GLG); also for a fee] that provide questions to a large number of physicians,
with cost usually a limiting factor. The advantage of Internet surveys is that multi-
ple, very directed questions can be placed in front of a battery of physicians, payers,
or other experts, and rapid feedback can be obtained. The disadvantage of Internet
surveys is that the inability to probe an expert to discern his train of thought or rea-
soning, and the inability to take a line of questioning in a different direction based
on feedback obtained earlier in the interview.
One drawback to primary research is that the wording and the line of questioning
is critical to minimizing potential bias. The key upside is that, taken as a whole,
primary research can confirm assumptions made from reviewing and conducting
secondary research.
Chapter 5
Intellectual Property
Because the intellectual property (IP) assessment is critical to determining the

amount and length of protection that a product will have in a particular market/geog-
raphy, a complete section is provided to address this important aspect of CI [1, 2].
With few exceptions, the best and most differentiated products will lose market
share almost immediately when generics become available (90% share of market
eliminated within 6 months). This is of paramount concern for small molecules,
which, in general, are easily reproduced within FDA/ICH guidelines. Because
biologics are more difficult to make and generally rely on more sophisticated
processes, biogenerics require different consideration. In essence, if the biologic is
exactly like the original, it is considered a generic. If it is similar and behaves in the
clinic just like the original, it is considered a biosimilar. If it behaves like the origi-
nal, but demonstrates minor improvement in efficacy or safety, it is considered a
bio-better. Due to the confusion in this space, the FDA originally preferred to refer
to them as follow-on proteins; an example is the Sandoz biosimilar, Omnitrope.
1 Introduction
The US Patent and Trademark Office (USPTO) defines a patent as “an intellectual
property right granted by the Government of the United States of America to an
inventor to exclude others from making, using, offering for sale, or selling the inven-
tion throughout the USA or importing the invention into the USA for a limited time
in exchange for public disclosure of the invention when the patent is granted.” Due
to the power provided by market exclusivity, the IP assessment has become the
lynchpin of the due diligence process. An accurate view of the patent landscape and
regulatory exclusivity surrounding a particular product may be used in order better
to understand risk, forecast revenue, seek price concessions, or obtain valuable
contract language to mitigate risk.

66 5 Intellectual Property
The strength of a patent, its remaining patent life, and the potential to obtain
regulatory exclusivity form the basis of protection for a branded product from com-
petition, including generics. Another key issue is freedom to sell a product without
interference from third parties that may own relevant patents. Because regulatory
affairs professionals are increasingly being asked to participate on due diligence
teams, they need to be familiar with the IP investigational process and the key out-
puts of the IP assessment. This enables their employers to gain better understanding
of the risks associated with inevitable patent challenges that arise with virtually all
financially successful branded products from third-party patent owners as well as
from competitors, especially generic manufacturers.
The remainder of this IP section will review regulatory legislation enacted to
provide additional marketing exclusivity in addition to patent protection. A due
diligence approach used successfully by a partnering entity resulting in almost
$3 billion in capital committed will be presented. Although targeted to product-
based partnering investments, this due diligence process could easily be applied
elsewhere, for example, to the merger and acquisition environment.
It is useful to note that although respected in major International Conference
Harmonization (ICH) countries (e.g., USA, EU, and Japan), not all countries honor
patent protection equally and this reality must be factored into a global marketing
strategy. Moreover, the patent and regulatory exclusivity situation for a given prod-
uct often varies substantially from country to country. For sponsors of branded
products, this may preclude marketing a product in a particular country.
The definition of “product,” for purposes of this brief, refers to small molecules.
It does not include biosimilars or optimized follow-on biologic/proteins, which are
covered in the Patient Protection and Affordable Care Act and February 2012 FDA
biosimilar guidance. “Generic drug application” or “abbreviated new drug applica-
tion” (ANDA) are used interchangeably herein. With some exceptions, the same
principles apply to 505(b)(2) applications.
2 Patent Exclusivity
As new products, delivery systems, regimens, and combinations are developed at

the laboratory bench, and/or from successful clinical trials, companies seek to obtain
a patent to protect their discoveries. The two most common types of patents encoun-
tered in the pharmaceutical industry are composition-of-matter (COM, e.g., unique
ingredients or older ingredients tweaked in a novel away) and method-of-use (MoU,
e.g., methods of treating particular diseases or a different dosing regimen or combi-
nation of therapies). These patents are issued in the USA if deemed useful, novel,
and non-obvious, and meet other guidelines posted at the US Patent and Trademark
Office Web site.
There is a lag between applying for a patent and its issuance, called the “patent
pending” period. Currently, over 700,000 filed patent applications await examina-
tion. Typically a patent application remains pending for 36 months or more. Once a
3 The IP Due Diligence Process 67
patent issues, it will protect a pharmaceutical product for 20 years from the date the
first non-provisional patent application was filed unless later found invalid or unen-
forceable by a court. Since many drugs take 10 or more years to develop in the
clinic, this usually leaves less than 10 years of residual patent exclusivity plus any
patent term extension (up to five additional years) to market a product before a
generic competitor erodes the brand’s sales. This period may be cut short by a suc-
cessful patent challenge from a generic competitor. Accordingly, it is advisable to
conduct an extensive review of potential invalidity challenges as part of the due
diligence process. This often entails a close review of the prosecution history of the
relevant patent(s) and the gathering of prior publications and patents to determine
the likelihood of a successful patent challenge.
Unsuccessful attempts have been made to unify patents in the EU (e.g., Community
patent and the European Patent Litigation Agreement). European patents are cur-
rently granted by the European Patent Office, enforced at a national level and issued
on a country-by-country basis after examination at the European Patent Office.
At an early stage in the due diligence process, the patent attorney (PA)—in con-
junction with the due diligence team’s project leader—will determine the basis of the
IP protection, including geographies, type of protection (e.g., COM or MoU), and the
history of the branded product. With this information in hand and additional research,
the PA can make a preliminary determination of the likely term of patent exclusivity
and identify potential threats to exclusivity as well as the timing of those threats
(e.g., paragraph IV challenge—discussed in more detail below). Simultaneously,
the PA can research whether the current product might infringe other patents owned
by competitors or other third parties, and, if so, the potential consequences.
3 The IP Due Diligence Process
There are four fundamental aspects to IP due diligence: (1) scope of coverage/
exclusivity; (2) validity and enforceability of the patents covering the product; (3)
freedom to operate; and (4) ownership of rights. Before undertaking such a review,
it is important to obtain substantial background technical information. In-house
regulatory affairs professionals can facilitate transfer of this information to patent
counsel. Any litigation history involving the patents will also be highly pertinent.
Evaluating the scope of coverage requires a review of the patent, its claims, and
prosecution history before the USPTO. Not all patents are created equally and most
are challenged if a substantial product is involved. COM patents are king. MoU
patents are also often effective but will not preclude sales for approved off-patent
indications. Patents covering formulations or dosage form improvements may also
offer valid protection, but are easier to design around. Whatever the type of patent,
it is important to identify at least one narrow claim that covers the marketed product.
It is desirable to have broad claims as well, but it is the narrow claim directed to
the marketed product that is more likely to withstand scrutiny from a validity
standpoint.
The PA may consult with a regulatory attorney and/or regulatory affairs

professional to determine whether any protection exists in the form of the regula-
tory exclusivities. While regulatory exclusivity (e.g., pediatric extension) is not pat-
ent protection, in essence, both protections serve a similar role—keeping competition
or generics from copying the product under consideration and entering the market.
A key difference is that regulatory exclusivities protect only against a competitor
that seeks to piggyback on the data gathered by the brand. In contrast, a patent will
protect against any product that falls within the scope of the patent claims. Depending
on the type of regulatory exclusivity and the timing involved, such exclusivity may
run concurrently or in addition to any remaining patent term. An appropriate time-
line is determined jointly by the PA and regulatory professionals.
There are many potential reasons that a patent may be found invalid. The most
common basis of invalidity findings is the existence of prior art such as prior publi-
cations that were not before the USPTO or not adequately considered by the patent
examiner. A prior publication may invalidate patent claims if it establishes that
someone else had previously disclosed something within the scope of the claims or
sufficiently close that the claimed invention would have been obvious to one of
ordinary skill in the art. Accordingly, a due diligence investigation will typically
include a search for prior publications that potentially invalidate the patent(s) at
issue. Since prior publications anywhere in the world published in any language
are potentially relevant, it is impossible to consider everything. Other types of prior
art including prior use in the USA may also invalidate a patent. There are also
other potential reasons why a patent may be found invalid such as double patenting,
failure to adequately disclose the invention, and derivation of the invention from
another.
A patent may also be found unenforceable as a result of inequitable conduct
before the USPTO. All inventors and others substantively involved in prosecution
have a duty to the USPTO to disclose material prior art. Failing to disclose a prior
publication or test data that contradict other data submitted to the USPTO are the
two most common reasons patents are found unenforceable. The PA will typically
review related patent filings and declarations including experimental results to iden-
tify potential sources of allegations of inequitable conduct.
Evaluating freedom to operate without interference from patents owned by third
parties is also an important consideration. This is accomplished by conducting a
search of patent claims for patents covering the active ingredient, methods of using
the product, mechanism of action, formulations, etc. Although there are certain
advantages to filing a lawsuit within the first 6 years a product is on the market,
there is no requirement that a patent owner file a lawsuit at any particular time.
Accordingly, even products that have been on the market for several years may be
subject to an unexpected lawsuit. Moreover, the days where brand companies
avoided suing one another for patent infringement are over.
It is also important to verify ownership. This may be accomplished by checking
the assignment records of the USPTO. A licensee will have to produce copies of all
relevant licenses. Representations and warranties concerning ownership or license
status are helpful, but it is best to verify rights independently.
5 Role of the Patent Attorney 69
4 Initial Due Diligence and Role of the Regulatory

Affairs Professional
The buyer’s IP assessment process usually includes both an internal (corporate)

attorney, who represents the buyer’s deal team in negotiations, and a PA, who leads
the patent investigations (e.g., COM, MoU, FTO). Due to the expense associated
with patent investigations, it is critical to determine the right time to engage the PA.
The strategy to complete the patent/IP due diligence exercise can be dictated by the
level of negotiations (i.e., near the end of the process when there is a high likelihood
of deal closure) or the magnitude of the transaction (<$1 million vs. $325 million).
In general, it is advisable to engage a PA with substantial pharmaceutical litigation
experience and access to proprietary patent databases to perform an initial triage
function at the beginning of a due diligence process that appears likely to be on
track for deal closure. Then, after general deal terms are agreed upon—but before
the final contract—a full patent investigation must be conducted. An initial triage is
conducted with the hope that deal killing issues will be flagged early, thus, saving
the deal team lost opportunity time and expense.
In tandem with this process, the regulatory affairs professional should be able to
obtain information about a potential partner’s patent estate through publicly avail-
able resources and requests for documents. For example, publicly available infor-
mation regarding a public company’s IP can sometimes be found on its Web site,
though this is typically an overview and does not usually provide patent numbers.
The FDA’s Electronic Orange Book Web site has improved but may be a month
behind (e.g., a search on 18 January 2012 lists the Orange Book data as updated
“monthly,” e.g., current “through December 2011” and is listed for “approved drug
products with therapeutic equivalence evaluations.” It is updated daily as new
generic approvals occur. Searches can be conducted by patent, active ingredient or
proprietary name, applicant, or by application number. Patent details are also some-
times provided in the initial slide deck provided by the potential partner or through
non-attorney vendor databases, such as ADIS.
5 Role of the Patent Attorney
In reviewing active COM and MoU patents, and for initial or business development
screening due diligence, a review of the patents identified in FDA’s Orange Book
may be sufficient. An early triage will often entail high level searching for poten-
tially relevant prior art and potentially problematic patents owned by third parties.
A more detailed review often represents a significant due diligence cost. Generic drug
companies devote substantial resources to identifying potential validity issues and
similar efforts are often necessary to gauge likely timing of generic competition.
The IP attorney may assist in identifying the likely timing of a generic entry and
the relative strength of the patent(s) at issue. The PA may rely on the regulatory
professional for guidance and may employ expert regulatory legal counsel if
required. The ability to obtain additional exclusivity or patent protection over the
life of the proposed partnering transaction may also be evaluated. Line extensions
or lifecycle changes, such as extended release (XR) formulations, may also provide
additional protection.
An experienced PA has the ability to offer remedies for contractual protection.
For example, in areas where the buyer is not allowed to see certain documents for
verification, it may be helpful to review options for contractual protection (e.g.,
warranties) to address any uncertainty. Based on prior experience, the PA may also
be quite helpful with deal terms or contract negotiations. When two partners dis-
agree on the validity of an IP-related statement or the strength of a patent (with
regard to a potential or ongoing challenge), a PA may often be able to diminish or
even eliminate risk through the use of contractual protection language.
6 Role of the Chemistry Manufacturing Controls Expert
Although CMC is beyond the scope of this brief, the PA and the regulatory affairs
professional are usually well advised to engage a CMC expert (chemist) familiar
with the chemistry, delivery system, manufacturing procedures, and ease of duplica-
tion of a particular patented product during the IP investigational process.
7 Contractual Protection
It is not within the scope of this brief to discuss how patent estate vulnerabilities are
handled from a deal making perspective, except to say that many perceived patent
weaknesses can be handled via contractual protection. For example, the buyer
deems a patent challenge likely for Product X; the seller deems such a challenge
highly unlikely. In this case, the buyer can add contractual protection (e.g., “made-
whole” provision) in the “unlikely” (through the eyes of the seller) event that a
successful patent challenge occurs for Product X.
8 Regulatory Exclusivity: The US Drug Price Competition

and Patent Restoration Act
Enacted in 1984, the US Drug Price Competition and Patent Term Restoration Act
(usually referred to as the Hatch-Waxman Act; hereafter just “the Act”) provides
a regulatory framework and incentive for generic drug approvals. The Act sought
8 Regulatory Exclusivity: The US Drug Price Competition and Patent Restoration Act 71
to balance the need for generic drugs with financial incentives for research and
development. A key intention of the act was to provide generic drug companies
with the ability to conduct noncommercial development activities prior to patent
expiration without the fear of infringement while also providing brand companies
with the ability to recoup patent term lost during the regulatory approval process.
The Act further provides a mechanism for resolving patent disputes prior to com-
mercial sale (and exposure to money damages) as well as a 180-day marketing
exclusivity period to the first generic applicant that challenges the relevant brand
patent. As a result, there are various aspects of the Act that impact the period in
which an approved brand product will enjoy market exclusivity. In meeting these
objectives the Act provides:
• Up to a 5-year patent term extension for an existing innovator patent to compen-
sate for patent term lost during the testing and approval phase (total patent term
plus extension is limited to 14 years).
• A research exemption for patent infringement in conducting work for regulatory
approval.
• For new chemical entities (NCEs), 5 years of exclusivity preventing FDA
acceptance of a generic drug application and 4 years for a generic drug
application alleging a listed patent is invalid or not infringed (will run con-
current with patent exclusivity). For new clinical investigations other than
bioequivalence studies (e.g., new indication), 3 years of exclusivity prevent-
ing approval of a generic drug application, which will run concurrent with
patent exclusivity; an additional 6 months of exclusivity for pediatric studies
tacked onto either the patent term, NCE or new clinical investigation
exclusivity.
• Thirty-month preclusion against ANDA approval due to ongoing patent litiga-
tion, opportunities to challenge the validity of patents issued to innovator drug
companies, and exclusivity for the first approved generic application preventing
approval of a subsequent generic application for 180 days. All of the foregoing
involve the following patent listing requirements and process:
– The innovator drug company must submit patent information with respect to
its NDA listing patents that cover the approved product. The FDA then lists
this information in the “Orange Book” (Approved Drug Products with
Therapeutic Equivalence Evaluations).
– A company intending to market a generic version of a listed drug (e.g., the
ANDA holder) must certify one of the following regarding the patents listed
in connection with the innovator’s NDA: (1) it has not been patented; (2) the
applicable patent has expired; (3) the patent will expire on a given date and
that the generic version will not be marketed before that date; or (4) the listed
patent is not infringed or invalid.
– Certification under the fourth certification above (called paragraph IV
certification) is the most misunderstood of the four certifications and typically
results in patent litigation. The generic company is required to notify the inno-
vator about the ANDA filing and explain why it believes that the generic
version will not infringe the listed patent or why the listed patent is invalid.
Upon notification, the innovator company has 45 days to file an infringement
suit; the Act permits such action by the patentee by treating the filing of a
generic drug application as a hypothetical act of infringement such that patent
issues may be determined before commercial sale of the product. If such a suit
is filed, the FDA withholds the approval of ANDA for up to 30 months while
the case is decided. The 30 month period may be extended to up to 7.5 years
from approval if an ANDA with a paragraph IV certification is filed between
year 4 and 5 after approval and the court takes longer than 30 months to decide
the case.
Note: because of the potential of an untoward outcome, the existence of an ongoing
paragraph IV challenge to a branded product by a generic house may result in the
abandonment of a potential risk-based transaction if the parties are unable to agree
on contractual protection.
Note: 7 years of exclusivity is available for orphan drugs through a prohibition of
approval of a generic drug application for the same indication under the Orphan
Drug Act.
At a minimum, NCE products that have undergone regulatory review (e.g., appro-
val to treat patients in a safe and efficacious manner based on clinical trial data), but
do not have patent protection, are able to obtain a period of protection of up to 5 years
for that product as an incentive to develop the product.
As mentioned earlier, products successfully studied in pediatric patients in the
USA are entitled to an additional 6 months of market protection through regulatory
exclusivity (see references below for additional details). Therefore, some products
may have no US patent protection, but may still remain protected for up to 5.5 addi-
tional years due to regulatory exclusivity alone. Unfortunately, this is typically not
sufficient to justify the extensive investment required to bring a new drug to
market.
Sources of additional information:
• Guidance for Industry: Court Decisions, ANDA Approvals, and 180-Day
Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug,
and Cosmetic Act; US Department of Health and Human Services, Food and
Drug Administration, Center for Drug Evaluation and Research (CDER),
Procedural, March 2000.
• Guidance for Industry, Qualifying for Pediatric Exclusivity under Section 505(A)
of the Federal Food, Drug, and Cosmetic Act, 30 June 1998. Section 505(A) of
The Food and Drug Administration Modernization Act required FDA to develop,
prioritize, and publish a list of approved drugs for which additional pediatric
information may produce health benefits in the pediatric populations and update
it annually. As an incentive to industry to conduct studies requested by the
Agency, Section 505(A) provides for a 6 month period of marketing exclusivity
(pediatric exclusivity).
9 Case Study 73
9 Case Study
In the hypothetical timeline in Fig. 5.1, NCE exclusivity of 5 years began on

approval. However, FDA will accept an ANDA after year 4 of NCE exclusivity if it
includes a paragraph IV certification indicating that the patent is not infringed or
invalid. A lawsuit filed by the brand company within 45 days of receipt of notice of
the ANDA filing initiates a 30 month period (starting in January) during which FDA
is precluded from approving the ANDA. The 30 month period will be extended up
to seven and a half years from approval under this hypothetical because the ANDA
was filed between year 4 and 5 of NCE exclusivity. However, the 30 month period
or any extension thereof may terminate earlier, depending upon the outcome of liti-
gation. No patent term extension is available because the patent was issued after
product approval.
What are the relevant considerations for the timing of generic entry? Much
depends upon the type of patent protecting the product and prior art uncovered
during a due diligence review.
If a COM patent covers the specific compound at issue and no relevant prior art
is identified, there may be reason to believe that a long patent term may be realized
without generic competition and the regulatory exclusivities are comforting, but
less important. This is not often the case and it is impossible to be aware of all
potentially relevant prior art. If a patent directed to a particular MoU is relied upon
for exclusivity, a key issue is whether there are approved, unpatented uses and
whether the claimed use is non-obvious compared to previously known uses. If
there is substantial concern about the validity of such a patent, regulatory exclusivi-
ties and the duration of litigation become more important. If validity of the patent
at issue is questionable, exclusivity may not be enjoyed through the end of the
Patent & Regulatory Exclusivities

Increased Risk of Generic Entry
Lawsuit Filed
30 month injunction
of ANDA approval
1/07 1/11 1/12 7/13 7/14
Approval ANDA NCE 30 months 7.5 years from

Filing Ends expires approval
US Patent No. 9,999,999 through 1/20 ?
Fig. 5.1 Intellectual property timeline for a hypothetical product

30 month preclusion of approval during the pendency of the litigation. Much will
depend upon the court in which the case is brought and the speed with which the
case is handled.
10 Summary
• Intellectual property (IP) assessment is the lynchpin of the entire due diligence
process.
• IP protection includes both classical IP assessment and regulatory exclusivity
assessment. Together they form the basis of protection of a product from
competition.
• When IP vulnerability is discovered, it is often possible to diminish or even elim-
inate a risk through contractual language.
• The regulatory affairs professional can play a critical role in the IP assessment,
to help determine remaining patent life and regulatory exclusivity.
• An experienced PA can be used to both triage due diligence opportunities and
execute potential partnerships.
• When two partners disagree on the validity of an IP-related statement or the
strength of a patent (with regard to a potential or ongoing challenge), a PA may
often be able to diminish or even eliminate risk through the use of contractual
protection.
• The US Drug Price Competition and Patent Term Restoration Act (Hatch-
Waxman Act), approved in 1984, provided a pathway for standardizing generic
drug procedures.
References
1. Huml RA, Baum A. Key Aspects of Pharmaceutical Due Diligence Intellectual Property
Assessment: Part I, RAPS Focus, Vol. 15, No. 10, October 2010, pp.28–30 and 32–33.
2. Huml RA, Baum A. Key Aspects of Pharmaceutical Due Diligence Intellectual Property
Assessment: Part II, RAPS Focus, Vol. 15, No. 11, November 2010, pp.24–29.
Chapter 6
The Final Report
Although every organization has its own unique process for assessing a partnering
or licensing opportunity, best practice suggests that evaluation of medical technolo-
gies should include an evaluation of product, market and legal, manufacturing, and
financial issues. The final due diligence assessment report, the culmination of the
evaluation process, integrates the findings of the research and development (R&D)
team along with the commercial and business team’s assessment [1]. In addition,
when investing in small organizations such as biotechnology companies, drug deliv-
ery companies, or specialty pharma firms, it may be necessary to conduct due dili-
gence on the corporation itself. Specifically, the final report should not only
summarize the findings of all teams but also highlight the key risks and associated
probabilities that could impact the opportunity. For example, for an investment in a
product in development, will there be a delay in regulatory approval? Are more
studies needed to support the marketing claims? Lastly, the final due diligence report
provides recommendations on whether to continue pursuit of the opportunity with a
potential partner, including the potential upsides and downsides of a relationship.
Ultimately, the report must satisfy the end-users of the strategic business plan—
most likely senior managers responsible for investment approvals.
Certain legal ramifications exist for the documentation of findings uncovered
during the due diligence process. Confidentiality agreements concerning informa-
tion gathered about the product under determination and the legal requirements
associated with a publicly traded company will not be discussed in this brief.
However, it is recommended that one obtain proper legal advice regarding this
aspect of the process before undertaking the preparation of a due diligence report.
Reference
1. Huml RA, Barker G, Cascade E, Fraser K. An Outline for the Final Due Diligence Assessment
Report, RAPS Focus, Vol. 9, Issue 7, August 2004, pp38–40.

Chapter 7
Competitive Intelligence Summary
If trends continue, it is highly likely that regulatory professionals will become

involved in one or more aspects of a due diligence process and be tasked with the
identification of competitive intelligence. They will play a major role in evaluating
risk-based transactions and competitive assessments which, for regulatory affairs
professionals, consist of a determination of the actual product profile, likelihood of
regulatory approval (with timing), and a determination of how that product profile
(via the actual product labeling) stacks up against the competition.
The due diligence process is usually fast-paced and exciting, but entails hard
work. It provides a unique opportunity for regulatory professionals to demonstrate
their competence and experience in a different arena. Unlike traditional fee-for-
service work, the regulatory professional’s due diligence contributions have a direct
impact on a company’s success in proportion to the financial magnitude of the deal.
It also provides a stimulating learning environment featuring access to and partici-
pation in development of:
• Novel products and technologies.
• New therapeutic indications.
• Corporate finance and strategy.
• Overview of the regulatory pathway and history of both successful and unsuc-
cessful products.
• Nonregulatory activities such as sales forecasting and marketing.
The regulatory affairs professional involved in due diligence exercises must:
• Identify regulatory and IP gaps requiring investigation prior to site visit through
review and synthesis of disparate sources of information, including both nonpro-
prietary and proprietary (obtained under an executed CDA agreement)
information.
• Develop a checklist to take to the on-site meeting to focus the review and to
prevent both redundancy of effort and errors of omission, keeping in mind that
critical information may not be available prior to or at the on-site meeting, neces-
sitating additional meetings with a potential partner.

78 7 Competitive Intelligence Summary
• Review all available FDA correspondence, clinical, CMC, preclinical, and com-
petitive data (commercially related).
• Provide a number for the probability of success (PoS) for registration of unap-
proved products and PoS for line extension for approved products (so as to risk-
adjust the net present value of a product-based opportunity).
• Understand the competitor landscape by projecting the lost likely product label
for unapproved products and the actual label for approved products.
• In conjunction with the commercial experts on the team (usually a sales fore-
caster and a sales and analytics expert) provide his/her assessment on the likeli-
hood of differentiation as expressed in the product’s label.
• Integrate these findings into a final report in consultation with the rest of the due
diligence team for the company’s Investment Committee or other upper
management.
This process will be shaped by the time available for review and will become more
refined with each subsequent unique due diligence exercise.
About the Author
Raymond A. Huml, M.S., D.V.M., R.A.C., is an executive director of global due

diligence in corporate development for Quintiles Inc. He has more than 20 years of
experience in the biopharmaceutical industry.
In his current position, Dr. Huml identifies risks associated with Quintiles’ global
(USA, EU, and Japan) product-based investments, working with specialists on all
components of the due diligence process, including R&D, commercial, intellectual
property and conflict of interest. Within corporate development (formerly
PharmaBio, then NovaQuest), he has worked on major investment transactions
involving more than $2.7 billion in capital on alliances with biotechnology and
pharmaceutical partners of all sizes.
Previously, Dr. Huml worked in biostatistics, medical writing, and regulatory
affairs in Quintiles’ clinical development services group. Dr. Huml has authored and
coauthored numerous scientific publications. In 2004, he was awarded Regulatory
Affairs Professionals Society’s New Professional Award.
Dr. Huml has played an active role in industrial veterinary medicine and devel-
oped a forum of continuing education opportunities for industrial veterinarians
through the North Carolina Veterinary Conference. In 2003, he was awarded the
North Carolina Veterinary Medical Association’s Young Veterinarian of the Year
Award. He also has received numerous Quintiles awards, including the Clinical
Development Services President’s Award and the Chairman’s Award.
Dr. Huml holds an M.S. in biology from East Stroudsburg University and a
D.V.M. from the North Carolina State University College of Veterinary Medicine,
and has earned the R.A.C. (US) certification.

DOI 10.1007/978-1-4614-3682-9, © Springer Science+Business Media New York 2012
Index
B H
Biosimilars, 1, 4, 5, 23, 27–38, 65, 66 Health Information Technology for Economic
and Clinical Health Act
(HITECH), 18, 21, 22
C Health Insurance Portability and
Chemistry manufacturing controls (CMC), Accountability Act (HIPAA),
28, 33–36, 38, 40, 41, 43, 47, 55–56, 18, 20–26
70, 78 HITECH. See Health Information Technology
Competitive intelligence, 1–38, 77–78 for Economic and Clinical Health Act
(HITECH)
D
DD. See Due diligence (DD) I
Devices, 1, 3, 18, 20–23, 25, 43, 47–49, International Conference on Harmonization
54, 55, 57, 62 (ICH), 1, 5, 6, 8–11, 14, 15, 28, 32, 37,
Drugs, 1, 39, 43, 47, 66, 75 55, 56, 66
Due diligence (DD), 1, 2, 26, 39–41,
47–63, 65–69, 73–75, 77, 78
M
Mobile medical applications, 21, 24–25
Monitoring, 3, 16, 17, 20, 26, 37
E
European Medicines Agency (EMA),
6, 11, 14, 15, 28, 34, 36, 56 P
Patient centric services, 5, 16–26
Preclinical, 5, 8, 27, 28, 33–37, 41, 43, 47,
F 49, 51, 55, 78
Food and Drug Administration (FDA), Predictive analytics, 17–19
1, 3–6, 9–15, 18, 20–28, 30–33, 48, 49,
52–57, 65, 66, 69, 71–73, 78
R
Regulations, 1, 17, 20–26, 31, 41, 56, 60
G Risk, 2–14, 18, 21–24, 28, 30, 33, 37, 39–41,
Guidelines, 4–6, 8–10, 14, 17, 21, 24, 25, 44, 49, 53, 54, 56, 58, 60, 65, 66, 70,
28, 32, 34, 36, 37, 56, 61, 65, 66 72–75, 77, 78

DOI 10.1007/978-1-4614-3682-9, © Springer Science+Business Media New York 2012
82 Index
S V
Safety assessment, 6–11, 14 Virtual data room, 47, 49–52
T
Therapeutic, 15, 27, 31, 36, 48, 49, 53, 55,
57, 60, 62, 69, 71, 77

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ISSN 1864-8118 ISSN 1864-8126 (electronic)

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Morrisville, NC, USA Ross M. Tonkens

1 Introduction to Competitive Intelligence ............................................... 1

4.2.3 Remote Patient Monitoring ........................................... 20

4 The On-Site Due Diligence/Data Room Meeting

AACR American Association for Cancer Research

ED50 Median effective dose

PDF Portable Document Format

Pharmaceutical competitive intelligence (CI) entails deﬁning, gathering, analyzing,

R.A. Huml, Pharmaceutical Competitive Intelligence for the Regulatory 1

Proprietary information is exchanged only after a Conﬁdential Disclosure

2 Introduction: Why Perform CI?

3 Regulatory Guidance, Advisory Committee Meetings,

3.1 Regulatory Guidance

3.2 Advisory Committee Meetings

In lieu of guidance, one can also gain an understanding of regulatory thinking by

4.1 Case Example I: Cardiovascular Risk

Competitive Intelligence Comments

• Cardiovascular risk is a concern for drugs in development as well as marketed

Competitive Intelligence Comments

• When trying to understand the US regulatory landscape—especially when no

4.1.2 QT Prolongation as a Cardiac Safety Biomarker

Each segment of the surface electrocardiogram (ECG) can be assigned a length in

Competitive Intelligence Comments

4.1.3 Regulatory History of Formalized Cardiac

(QT Interval Prolongation by Human Pharmaceuticals), focused on nonclinical sig-

Competitive Intelligence Comments

• Preclinical signals are sometimes predictive of clinical signals to come later in

It provided a nonclinical testing strategy in the form of an algorithm to assess risk

Competitive Intelligence Comments

• Products with significant QT prolongation signals may be abandoned and are

Competitive Intelligence Comments

4.1.4 Regulatory History of Formalized Cardiovascular

Competitive Intelligence Comments/Summary

4.1.5 FDA’s December 2008 Guidance for Industry

Competitive Intelligence Comments

4.1.6 Continued Discussion in the Literature of the Cardiovascular

Competitive Intelligence Comments

4.1.7 July 2010 FDA Advisory Committees’ Meeting on Avandia

4.1.8 EMA’s January 2010 Draft Guidance

4.1.9 Potential Ramifications for Future Global Development

Competitive Intelligence Comments

considerable; so considerable, in fact, that some companies will no longer be

4.2 Case Example II: Patient-Centric Services

This example provides an overview of the regulatory implications of Patient Centric

Fig. 1.1 Illustrative example of a multiple touch point platform

PCS is based on patient-speciﬁc data including self-reported health provider,

Examples of PCS Programs

PCS programs employ technology platforms to exchange targeted communications

Examples of PCS Programs

Figure 1.1 provides an example of an integrated technology platform utilizing the

Classification and Data Extraction and

Statistics Decision Trees Data Mining

Clustering Neural Network Graphics and

Fig. 1.2 Illustrative example of a predictive analytics platform

Patient information is collected from a data warehouse, call center, pharmacy, or