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Drug Companies Hide Reasons Drugs are Rejected by FDA

Jun 15, 2015

On seven occasions between August 11, 2008, and June 27, 2013, the Food and Drug Administration (FDA) denied approval to a new medicine, in part, because patients taking the drug were more likely to die than patients in the control group. But only one of the rejected drug companies told investors-or the public-about the reason for the denial.

This information emerged in an FDA analysis published in the new issue of the British Medical Journal (BMJ) of what pharmaceutical companies say when the FDA rejects a drug. The article says that most industry communications about non-approvals are, at least, insufficient and misleading. At worst, they may come close to outright lies, according to Forbes. Investors should be skeptical about what company executives say about the rejection unless the drug maker makes public the full text of the rejection letter. In the time period covered by the analysis, no drug company did that.

In their analysis, FDA researchers led by Peter Lurie, the FDA's associate commissioner for Public Health Strategy and Analysis (and a former researcher at the consumer advocacy group Public Citizen) broke out the complete response letters, company press releases, and filings to the Securities and Exchange Commission into discrete statements. They then tallied how often the statements in the press releases (or in the SEC filing) matched what was actually in the rejection letter, Forbes reports.

Twenty one percent, or 13, of the press releases did not contain any details from the letters. Press release statements matched only 93, or 14 percent, of the 687 statements about reasons for rejection contained in the complete response letters. This increased to 101, or 15 percent, when the analysis of SEC filings was included. The statements concerned such things as efficacy, safety, clinical pharmacology, manufacturing, and labeling.

Forbes explains that press releases, by their nature, are less informative than the FDA letters, and are intended to reflect as positively as possible on the company. In a press release, the company need only include the bare details of why the drug was denied approval. But this means that a large amount of information is not reaching investors or other drug developers. This is a persistent problem, Forbes reports. Seven years ago, John Jenkins, director of the FDA's Office of New Drugs, told Forbes, "One thing I've said now for several years is, if a company is telling you about the letter, I would ask to see the letter, because that's the only way to know what the FDA said."

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