FDA: Drug Companies Routinely Hide The Reasons Their Drugs Are Rejected From Investors


Seven times between August 11, 2008, and June 27, 2013, the Food and Drug Administration declined to approve a new medicine, in part, because patients were more likely to die when taking the drug than in a control group. Yet only one of those companies told investors – and the public – about that concern.

That’s perhaps the most shocking detail from a sweeping FDA analysis, published in the new issue of the British Medical Journal, of what pharmaceutical companies tell the world when the agency rejects a drug. The conclusion: at best, the industry’s communications about rejections are insufficient and misleading. At worst, they sound close to outright lies – and investors faced with an FDA rejection should never believe anything that executives have to say unless those executives make public the full text of the rejection letter – something that, in the time span of this analysis, no company has done.

Courtesy British Medical Journal.

Current FDA regulation means that the agency does not publish its rejection letters, known as complete response letters. But FDA researchers led by Peter Lurie, the Associate Commissioner for Public Health Strategy and Analysis at the FDA and a former researcher at the consumer gadfly group Public Citizen, found a clever way around this restriction. They broke up the complete response letters, resulting press releases, and filings to the Securities and Exchange Commission into discrete statements. Then, they counted how often the statements in the press releases (or, in a separate analysis, the SEC filing) matched what was actually in the rejection letter.

Twenty one percent, or 13, of the press releases did not contain any of the details from the letters.  Press release statements matched only 93, or 14%, of the 687 statements about reasons for rejection contained in the complete response letters.  This increased to 101, or 15%, when the analysis of SEC filings was concluded.

Press releases are by their nature less informative than the letters the FDA has to send. Companies only need to include the bare details of why their drug was rejected. But this is a huge amount of information that’s not reaching investors or other drug developers. This is not a new problem. I first wrote about it seven years ago, when John Jenkins, director of the FDA’s Office of New Drugs, told me: “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.”

This information vacuum doesn’t just hurt investors. Companies say the letters should remain confidential because they contain competitive information. But  the reality is that companies are not served by a system where only a limited number of people know why a drug was rejected. One of the best ways to understand what you need to do to get your drug approved is to know where others went wrong.

An example? The same one I used in 2008: The FDA has now rejected Merck’s sugammadex, hailed by many anesthesiologists are a breakthrough antidote to anesthetics, three times. Wouldn’t it be nice to know exactly why, in the FDA’s own words? It’s time to change the FDA regulations so that investors know why drugs get rejected.


By Matthew Herper
Forbes Staff

Pharma & Healthcare 6/12/2015 @ 12:50PM