An analysis from Food and Drug Administrations researchers (FDA) shows that drug companies fail to reveal to investors and the public the reasons their new drugs are denied FDA approval.
On seven occasions between August 2008, and June 2013 a new drug was denied approval in part because patients taking the drug were more likely to die than patients in the control group, i.e., those not receiving the drug. But only one of the rejected drug companies revealed the reason for the denial, Forbes reports.
The FDA analysis of what pharmaceutical companies say when the FDA rejects a drug was published in the latest issue of the British Medical Journal (BMJ). The article says that, at best, the majority of industry communications about the rejections are misleading and insufficient. At worst, company statements 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, which no company did during the time period covered by the analysis.
The FDA researcher team was led by Peter Lurie, the agency’s associate commissioner for Public Health Strategy and Analysis (and a former researcher at the consumer advocacy group Public Citizen). The researchers broke out discrete statements from the complete response letters, company press releases, and filings to the Securities and Exchange Commission and they tallied how often the statements in the press releases (or in the SEC filing) matched what was actually in the FDA rejection letter, Forbes reports. The statements analyzed concerned such things as the drug’s efficacy, safety, clinical pharmacology, manufacturing, and labeling.
The BMJ article reports that 21 percent, or 13, press releases did not include any details from the FDA 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.
By their nature, press releases contain less information than the full text of the FDA letters, and press releases are intended to reflect as positively as possible on the company and its drugs. Generally, the company includes only the bare facts about why the FDA denied approval to the new drug and this means that a large amount of information is not reaching investors or other drug developers. Forbes reports that this is not a new problem, but a persistent one. Seven years ago, John Jenkins, director of the FDA’s Office of New Drugs, told a Forbes writer, “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.”