Drug Industry Incentives Out Of DSHEA Purview - Pharmanex Brief

Protection of research incentives for prescription drug manufacturers was not an objective of Congress when it drafted the Dietary Supplement Health & Education Act, Pharmanex contends in an Aug. 23 brief to the Salt Lake City federal court. The argument was submitted by the Cholestin marketer in response to FDA's July 20 brief for appeal.

In its latest action in the case, Pharmanex v. Shalala, the company notes that, despite FDA's argument that its interpretation of DSHEA is necessary to retain incentives for Rx drug companies, "DSHEA contains no finding or policy statement regarding incentives for pharmaceutical companies." The agency has until Sept. 10 to respond to the Pharmanex brief.

The case will next return to the federal court where oral arguments will be heard from both Pharmanex and FDA on the complex "question of first impression regarding the meaning of" DSHEA, both parties have noted in their briefs. A hearing date has not yet been scheduled.

"DSHEA's predominant purpose is to enhance the role of supplements in promoting health," which in turn "decreases incentives to develop pharmaceuticals by reducing the need for them," Pharmanex argues in its brief, adding, "Congress accepted that consequence." Therefore, FDA's consideration of the pharmaceutical industry in the agency's interpretation of the act is "contrary to the purpose expressed" in DSHEA, the company concludes.

The ongoing litigation began in May 1998 when FDA sent Pharmanex a letter saying that its red yeast rice supplement Cholestin was an approved new drug (¹ (Also see "Pharmanex seeking court order to allow red yeast rice imports." - Pink Sheet, 25 May, 1998.)). FDA also had argued that Cholestin was designed as a drug analog to Merck's cholesterol-reducer Mevacor (lovastatin). In February, the Salt Lake court decided the agency's determination was unlawful.

On July 20, the agency filed an appellate brief saying market exclusivity for "pioneer" drugs that are approved would be compromised by dietary supplements containing the same active ingredients sold freely at a cheaper price and with less restrictions (² (Also see "Cholestin Decision Threat To "Pioneer" Drug Exclusivity Cited In FDA Appeal" - Pink Sheet, 16 Aug, 1999.)).

The agency's brief noted that marketing of dietary supplements containing the same active ingredients as approved drug products "would reduce the financial reward for the drug manufacturer's investment in research, and thereby undermine the statutory incentive for new drug development."

In response, the Pharmanex brief says, "Manufacturers have powerful incentives to develop products as drugs rather than supplements. It is very unlikely that the nature or degree of any competition between supplements and drugs could materially affect these incentives."

Drugs benefit from a number of marketing advantages over supplements, the brief continues, including higher prices, third-party coverage, non-patent market exclusivity and the ability to make treatment or prevention disease claims.

Dietary supplements are targeted to a different group of consumers, Pharmanex maintains.

"It is highly unlikely that a supplement labeled in accordance with [DSHEA], prominently and in boldface, as not intended to diagnose, treat, cure, or prevent any disease, will take large quantities of business away from drug products that FDA restricts to sale by prescription due to their powerful effects and related risks," the brief says.

Throughout the case, FDA has asserted that Cholestin's ingredient lovastatin, in the form of red yeast rice, is an "article that is approved as a new drug." Pharmanex, in turn, has argued that only a finished product, not a single ingredient, can be determined to be an approved drug.

The Pharmanex brief notes that to categorize lovastatin as an article approved as a new drug, "FDA must say that 'any of a product's individual components'" may be an article. Therefore, "on FDA's view, even an inactive ingredient may be an approved new drug."

"Consequently, if the manufacturer of a dietary product in capsule form makes the capsule from the same material used in the capsule in an approved drug product, FDA could exclude the dietary product from dietary supplement status," the company adds. "With respect, that result is preposterous."