Compliance Considerations in Pharmaceutical Product Development

1. Compliance Considerations in Pharmaceutical Product Development John C. (Jack) Garvey, Esq. THE WEINBERG GROUP INC. PRINCETON, NJ

2. The Drug Development Challenge A Sampling of Key Compliance Focus Areas Structuring Compliance for Sustainability Closing Thoughts Compliance in Drug Development

3. Approval Cost 2007 2008 2009 2010 2011 Business Climate Various sources estimate the current average drug approval costs between $900 million and $1.7 billion Estimates are that 1 FDA-approved drug results from 5-10,000 that enter the discovery phase PHRMA member companies increased R&D spending 53.5% between 2000 and 2005 to $40 billion Goldman Sachs estimates that pharma R&D spending will increase 7% per year from 2004 to 2009

4. Snatched from the Headlines… From CNNMoney.com, 16 August 2007 The pharma industry is suffering a dearth of new drug approvals thanks to an increasingly stringent FDA…. The Food and Drug Administration approved 38 new drugs through July of this year, down 31 percent from 55 approvals during the same period in 2006 …. FDA spokesperson Susan Cruzan denied that her agency was getting tougher on drug applications. "There have been no systematic changes in how we are approaching the approval standards for new applications," wrote Cruzan in an email to CNNMoney.com, adding that "each application is reviewed on its own merit."  . …. [T]his year's approvals include only seven drugs that can be considered completely new, which is a 10-year low for the industry. ….

5. The TWO Main Goals of Drug Development Identifying a chemical entity / compound that has a specific, singular therapeutic impact on a broad population set with minimal adverse events. Developing a formulation and delivery system that consistently delivers the desired biological availability of the identified compound to the broadest possible population set. Then…

6. DISCOVERY Phase 1 PRE- CLINICAL CLINICAL Phase 2 FDA REVIEW XFER TO MFG Phase 3 IND Filed NDA Filed The Drug Development Cycle(Simplified)

7. DISCOVERY Phase 1 PRE- CLINICAL CLINICAL Phase 2 FDA REVIEW XFER TO MFG Phase 3 IND Filed NDA Filed Drug Development Compliance Touchpoints

8. Phase I GMP Guidances Clinical Trials Risk Communication Access for Investigational Drugs Early CMS Involvement in Clinical Requirements Data Integrity -- Traditional Data Integrity – Part 11 / CSV Considerations CMC Issues Pre-Approval Inspections Process Analytical Technology / Quality by Design Pharmacogenomic Data Submission Pediatric Studies Requirements Safety Reporting Requirements Third Party Services Current “Hot-Button” Areas New Guidances Sampling of Traditional and Evolving Compliance Considerations

9. The Changing Landscape of Development Compliance Guidance: Establishment and Operation of Clinical Trial Data Monitoring Committees (3/06) Guidance: Using a Centralized IRB Process in Multicenter Trials (3/06) Draft Guidance: Exception from Informed Consent Requirements for Emergency Research (9/06) Draft Guidance: Adverse Event Reporting – Improving Human Subject Protection (Out for Comment – 4/07) Guidance: Immunotoxicity Studies for Human Pharmaceuticals (4/06) Guidance: ICH Q8 – Pharmaceutical Development (5/06) Draft Guidance: Supervisory Responsibilities of Clinical Investigators (Out for Comment – 5/07) Draft Guidance: Approaches to Complying with CGMP During Phase I (12/06) Draft Guidance: ICH Q10 – Pharmaceutical Quality System (7/07) Guidance: Computerized Systems Used in Clinical Investigations (5/07)

10. Not a new requirement – flows from original GMPs and heritage of 1991 Guidance Focus on “Quality Control” Well controlled procedures Adequately controlled equipment Accurate and consistently recorded data Agency Recommendations: Evaluate production environment for potential hazards Appropriate actions to minimize risks and safeguard quality In a phrase: Product Characterization And Risk Mitigation Specific Coverage: Personnel QC Function Facility & Equipment Control of Components Production & Documentation Laboratory controls Container closure and labeling Distribution Recordkeeping Other Coverage Screening Studies/Microdose Producers Multi-Product Facilities Biological and Biotechnological Products Sterile Products/Aseptically Processed Products Phase I GMP Guidance

11. US Clinical Trial Regulatory Requirements • IND – 21 CFR 312 • Protection of Human Subjects --- 21 CFR 50 • Institutional Review Boards – 21 CFR 56 • Financial Disclosure by Clinical Investigators – 21 CFR 54 • FDA Guidance for Data Safety and Monitoring Boards • NDA Regulations – 21 CFR 314 • 21 CFR 11

12. FDA GCP Concerns • A strong IRB system • Protection of vulnerable populations • Data Quality and Integrity • Advancing Technology (5/10 FDA guidance) • Personalized Medicine / Pharmacogenomics • International Research • Subject Safety (AE reporting/CI Training) • Two guidances in draft: AE reporting; Investigator Responsibilities

13. Clinical Investigator Inspections – 2006

14. Clinical Compliance Issues • Investigator responsibilities – critical to clinical compliance outcomes • FDA Form 1572 – Provides information regarding the investigator, protocols, research facilities / labs, responsible IRB, sub-investigator – Commits investigator to responsibilities • FDA’s focus on Investigators • Personal investigator involvement • Focus on Informed Consent (21 CFR 50) and IRB responsibilities (21 CFR 56) • Timely, accurate adverse event reporting • Focus on financial disclosure compliance rules

15. Snatched from the Headlines… From THE WALL STREET JOURNAL, 6 August 2007 Drug: Experimnetal Gene Therapy Company: Targeted Genetics Subject: 36 year old woman Issue: Informed consent process Outcomes: Patient death; Negative media exposure of company • What happened: • Trial investigator introduced study to patient during routine treatment • Allegations of mixed signals with warnings due to doctor patient relationship • If a patient’s doctor is an investigator, there should be additional counsel for the patient about study participation

16. Clinical Compliance Issues • FDA Oversees Clinical Research through • Agency central review – primarily through safety reports and submissions • Bioresearch Monitoring Program (BIMO) • Site inspections • A few FDA Challenges with Clinical Trials • Large, multicenter studies • Data integrity (ALCOA - Attributable, Legible, Contemporaneous, Organized, and Accurate) • Ex-US studies • Oversight with Limited Resources

17. Clinical Compliance Issues • Other Compliance Issues • Documentation practices – appropriateness of delegations of responsibility, attribution, and accuracy  Preparation of Regulatory Binder • Product Compliance – dispensing, accountability, reconciliation • ICF accuracy – proper versions • Failure to maintain proper case histories • Investigation not done pursuant to signed investigation plan or investigator statement • Ensuring accurate AE reporting

18. Current FDA Hot-Button Areas • Critical Path Initiative • Risk management • Quality Management • GCP Inspecting • Updating GCP Compliance Programs (Inspection SOPs) • Standardized Inspection Reporting (Turbo EIR) • Site selection criteria • Streamlining Enforcement / Disqualification

19. Expanded Access for Investigational Drugs • Abigail Alliance v. von Eschenbach • Issues involve 21 CFR 312.34 – should terminally ill patients have access to purchase post-phase-I drugs?? • Impacts on the sponsor – liability, cost, etc. • Oral argument on 3/1/07 – Decision Pending • December 14, 06 – FDA issues proposed rule on Expanded Access to Investigational Drugs for Treatment Use (71 FR 240, 75147) UPDATE: August 7th – U.S. Court of Appeals, DC Circuit, reverses District Court and denies right to expanded access.

20. CMS Draft Requirements for Clinical Research • For drugs, biologics or devices that treat Medicare reimbursable diseases or injuries • Provides what “deemed” studies are and outlines requirements and criteria • Protocol • Linkage of results in protocol to Medicare population • Inclusion criteria and consideration of subpopulations • Study results must be published

21. Compliance & Use of Third Party Services • Continually increasing trend towards use of third parties for development activities • CROs / CRAs • AE Reporting • Bioanalytical Services / Testing • Services added all the time • Some services being moved overseas, particularly those with IT components • Complaint, AE, Pharmacovigilence handling / reporting • Clinical studies • Clinical trials data analysis When it’s hard enough to keep operations in compliance with domestic oversight, how do we do this when operations are entrusted with another entity, halfway across the world?

22. Case Study: MDS Pharma Warning Letter: 12/04 “A systematic problem of inadequate analysis and investigation of anomalous results across multiple studies for multiple sponsors.” FDA Letter to Sponsors of Approved ANDAs (1/07): “[S]erious questions remain about the validity of bioequivalence data generated by MDS in studies during this time period that have not been inspected by FDA, including the studies you have submitted in support of your applications. In view of these findings, FDA is informing holders of approved ANDA(s) of these issues and would like to know what steps are being taken by you to assure the accuracy of data submitted in these applications and confirm the validity of MDS's analytical studies that were conducted from January 2000 through December 2004 and subsequently submitted to the FDA..” Warning Letter: 8/06 “[F]ailure to demonstrate the accuracy of your analytical methods in more than thirty studies for six different drugs confirm that there are widespread problems at your facilities….” Warning Letter: 12/04 “FDA has concerns about the validity of other bioequivalence data generated by MDS, including data submitted in support of currently-approved applications.”

23. Case Study: MDS Pharma (Contd.) • Lesson 1: You don’t want to have submissions or approved products at risk due to third-party compliance issues. • Lesson 2: FDA expectations change. Are your service providers keeping up? How do you know? • Lesson 3: Sponsors maintain responsibility for their products – Responsibility is NOT able to be outsourced! • Lesson 4: Continual oversight for 3-P services is essential.

24. Late Stage Development – CMC Issues • Q7, Q8, Q9 & Q10 are big drivers in late stage development issues • Risk-based focuses are now the desired “end-state” • Cannot do enough product and process characterization • essential product requirements • critical to quality attributes • design space (multivariate analysis & modeling) • critical control points (HACCP & like methodologies) • Linearity and linkage from IND product through final formulation (including clinical impacts)

25. Preapproval Inspections • Purpose: Insure application, data and sponsor operational integrity • Joint Center/District activity with Office of Compliance • Focus on: • cGMP compliance • Authenticity, integrity of data in the applications • Adherence to application commitments • Other factors potentially impacting whether Agency should approve application

26. Focus on Data Integrity – Examples • Cutting and pasting of chromatographic data to change OOS results • Manipulations of sample outcomes to force passing results • Modifying weights of samples in analytical calculations • Selective inclusion of raw data into final records • Disconnect between results obtained and approved methods filed with Agency

27. Don’t mess with data integrity…

28. Issues with data integrity and fraud appear to be increasing Cuts across regulated product classes, and is occurring in clinical trials and elsewhere in the development process FDA is increasing staff focus on data integrity, data manipulation and fraud Increasing focus on PAIs and on the data integrity issues Focus on following up on tips or information provided regarding data integrity failures or fraud issues Data Integrity – According to FDA… What they are seeing… What they are doing about it…

29. Four Quadrant Compliance Program Framework • Governance • Reporting & Management Review • Metrics • Executive Linkage • Process Management • Process definition • Process characterization • Process execution • Compliance Systems • Policies, Procedures, Work Instructions, etc. • Personnel and organizational structures • Audits, QA activities, etc. • Knowledge & Environment • Organizational Culture • Regulatory Intelligence • Training & Education

30. Application of the 4Q Compliance Model to Pharmaceutical Development • Look at compliance end to end – should track to end-to-end quality considerations • Establish an overall Pre-Marketing Compliance Leadership – Ensures executive involvement • Focus on ensuring no substantive gaps across the development cycle • Application of substantive requirements to company business processes / development models • Linkage from requirements to infrastructure elements

31. Application of the 4Q Compliance Model to Pharmaceutical Development (Contd.) • Break down development cycle or substantive requirements into areas of compliance responsibility • Discovery / pre-clinical • GCP • Data assurance • Late stage / product transfer • Incorporate compliance metrics into development cycle metrics – Create regular compliance “Management Review” • Use third party (internal or external) compliance reviews for formal assessments -- “No spin” feedback is essential

32. Statutes, Regulations, Guidances, 483 / WL observations, Agency Statements, Case Law, etc. Research & Development Application & Systems Processes ≠ Systems Processes Applied Regulatory Intelligence And remember…

33. The Rolling the Dice Zone – How much risk do you want to take? Zones of Compliance Certainty Clearly above legal requirements and enforcement expectations Clearly below legal requirements and enforcement expectations

34. Closing Thoughts • Is compliance a company’s biggest challenge in pharmaceutical product development? • Based on all this … will drug development get less complex? Less Risky? How will you manage this? • Do you know where in the Zone of Compliance Certainty your organization is? By system? By process? • Does executive management understand this material? • Are you proactive or reactive in your approach to compliance? Why? • What will you do differently when you get back to your company?

35. Thank you.Questions? For More Information, Contact: John C. (Jack) Garvey, Esq. THE WEINBERG GROUP INC. john.garvey@weinberggroup.com Office: 609-919-6373 Mobile: 732-397-3103