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Thalomid is a popular treatment for a progressive blood disease known as multiple myeloma—a cancer of the plasma cells that is responsible for more than 10,000 deaths annually in the United States. The drug accounted for more than three-quarters of the $377 million in revenue generated last year by its manufacturer, New Jersey-based Celgene Corp. In fact, the global pharmaceutical company’s Web site proclaims that Thalomid is “the current driver of Celgene revenue growth.”

According to the Food and Drug Administration, which determines what drugs enter the U.S. market and also oversees their development, manufacturing, marketing and distribution, Thalomid (the brand name version of thalidomide, which in the early 1960s was prescribed in Europe and Canada for morning sickness in pregnant women, then withdrawn from the market after being traced to severe birth defects) was approved to treat a severe skin disorder in leprosy patients. As a result, Celgene may not legally market the drug for any other use, but physicians may prescribe it for other conditions. A Celgene spokesperson admits that Thalomid is most often for off-label uses, rather than the leprosy condition.

As the widespread “off-label” use of Thalomid and several other drugs indicates, the FDA’s decree is often not the last word for the industry. In recent years, off-label sales have generated billions of dollars in revenue. Only in one instance was a drug maker penalized: In May 2004, Pfizer subsidiary Warner-Lambert agreed to plead guilty and pay more than $430 million to settle all Justice Department charges related to the off-label marketing of its epilepsy drug Neurontin, which the company promoted as a treatment for everything from migraine and attention deficit disorder to drug-withdrawal seizures and bipolar disorder.

But off-label marketing is not the only problem the FDA has faced lately: the agency has come under fire over drug-safety issues, a drop in enforcement actions and for its inability to force drug companies to meet such post-marketing commitments as conducting additional clinical trials.

FDA-watchers and consumer groups maintain that the agency’s woes are symptomatic of its loosening grip over the drug industry. With pharmaceutical companies’ profits increasing dramatically and their political influence growing apace, the FDA’s capacity to effectively regulate them has progressively diminished, legislators and agency watchdogs contend.

According to critics, the FDA has been handcuffed by inadequate resources and legislation passed in the last decade and a half that produced a more industry-friendly regulatory policy.

Two such laws that gave the industry more clout are the Prescription Drug User Fee Act of 1992, which accelerated the new-drug approval process, and the FDA Modernization Act of 1997, which restructured the agency.

“[The FDA Modernization Act] was a bundle of gifts to the pharmaceutical industry,” Marcia Angell, M.D., a former editor in chief of The New England Journal of Medicine, told the Center for Public Integrity. “Among other gifts was a dropping of standards for approving new drugs. In many cases, a drug only has to be tested in one clinical trial—Phase IV clinical trial—to show that the drug was reasonably safe and effective. In many cases, such drugs were supposed to be tested in post-marketing studies after they are on the market.”

Safety issues

Safety issues have been the FDA’s Achilles’ heel lately. The agency’s safety-monitoring system has come under increased scrutiny since last fall, as evidence emerged that three popular painkillers, known as COX-2 inhibitors, were found to cause severe side effects. Merck‘s Vioxx and Pfizer’s Bextra were withdrawn from the market. Celebrex was kept on the market, although Pfizer was directed to add a prominent, “black box” warning to its anti-inflammatory drug—the FDA’s strongest safety alert.

David Graham, an FDA whistleblower, estimated that Vioxx may have caused heart attacks in as many as 140,000 Americans and led to as many as 55,000 deaths in the United States.

In the wake of the Vioxx controversy, news organizations documented the inadequacy of the safety monitoring system as well as the FDA’s inaction. Complaints about Vioxx, media stories revealed, had been trickling in since 2001.

“The fact is that doctors should have been warned [about the side effects of Vioxx],” Steven Findlay, a health care analyst focusing on prescription drugs at Consumers Union, told the Center. “Unquestionably, there should be a better system to warn doctors and patients of drugs, rather than waiting until you have more conclusive evidence about [their side effects].”

This was not the first time the FDA dragged its feet before pulling a drug off the market. In the late 1990s, the agency and Parke-Davis (now part of Pfizer) kept Rezulin on the market for two full years after the diabetes drug—which could cause severe liver problems—was banned in Britain.

To Findlay, “the horrible thing about Vioxx is more than half the people who were taking the drug did not need it,” because they could have used cheaper drugs with longer-established safety records.

The agency depends on individuals, health professionals and companies themselves for input on the safety of the 10,000-plus drugs it regulates, along with medical devices, food, vitamins and other nutritionals, veterinary products and cosmetics. Adverse reaction reports from companies are mandatory, but those from consumers and health professionals are voluntary.

Critics such as Marcia Angell, author of The Truth About the Drug Companies: How They Deceive Us and What to Do About It, say that, because of the MedWatch program’s largely voluntary nature, only a fraction of adverse events are reported to the agency. “The safety monitoring is simply catch-as-catch-can,” Angell said. “That depends entirely on doctors informing the agency of instances of what they feel are adverse events. If they don’t notify the FDA and drug companies, then the FDA never hears about them. I think that only a tiny percent of the adverse events are reported to the FDA.” MedWatch, which aggregates reports by healthcare professionals, consumers and manufacturers, was created by the FDA in 1993 to help track serious side effects of drugs and other medical products.

Enforcement actions

Judging by the steadily declining number of “warning letters” the FDA has issued, in dealing with improper marketing, the agency seems ill-equipped to handle even the violations it is aware of.

A warning letter is the first step in the enforcement process. The number sent to companies over improper or unapproved marketing dropped from 140 in 1997 to 23 last year, the lowest total in the eight years FDA has been keeping records. While the agency issued an average of 122 letters a year from 1997 to 2000, in the four years that followed it issued an average of 36 letters a year.

Four of the five companies receiving the most marketing-related letters have received no more than two per year since 2002. Merck is among the ten companies issued the most marketing-related letters overall but has not received a letter since 2001, when it received three.

Even when the FDA has the power to discipline companies, it rarely does so.

Under the Federal Food, Drugs, and Cosmetic Act, Celgene, the maker of Thalomid, was carefully warned to only market the drug as a non-monotherapy, last-resort treatment for the skin condition associated with leprosy. Yet the company issued press releases touting Thalomid as a treatment for multiple myeloma and other oncological conditions, according to the FDA, which slapped Celgene with two warning letters for such “off-label promotions.”

Although the agency has the power to pull drugs off the market for non-compliance by manufacturers, it has never done so. Instead, enforcement actions almost invariably end with warning letters like those issued to Celgene.

Lack of commitment

The accelerated drug approval program and prescription drug advertising are other areas where companies do not pay any price for defying the FDA.

Under the former program, whose regulations became effective in January 1993, the process to bring life-saving drugs to market was dramatically streamlined, although pharmaceutical companies are required to prove in follow-up clinical studies that these drugs are in fact safe.

But companies often do not meet these post-marketing commitments, and without any apparent consequences. Among those who questioned the FDA’s ability to regulate the program are Angell and Rep. Edward Markey, D-Massachusetts.

“Drug companies don’t bother to carry out [the studies],” Angell said. “The FDA doesn’t bother to make sure that they do. In most cases, these commitment studies have not even started.”

A recent investigation by Markey’s staff concluded that the accelerated approval program is “broken and failing to ensure patient safety.” Among the study’s findings: 50 percent of the post-marketing studies that should now be underway have not even been started, even though companies have been selling the drugs in question for an average of 20 months, and in one case for as long as 6 years and 9 months. According to the Massachusetts Democrat, because product labels do not specify whether drugs have been granted accelerated approval, and because information about these drugs—including whether the FDA has asked for follow-up research—is difficult to find, consumers are often left in the dark about potential risks.

The FDA has been regulating prescription drug advertisements since 1962. Advertising for non-prescription drugs, like advertising for most other products and services, is regulated by the Federal Trade Commission.

Since the FDA Modernization Act of 1997 relaxed regulation of direct-to-consumer advertising, thereby fueling tremendous growth in drug advertising budgets, the FDA has determined that many drug promotional materials have emphasized the effectiveness of drugs while downplaying their adverse effects. At the same time, however, enforcement records available on the agency’s Web site show that it has apparently lost its zeal to crack down on inaccurate and misleading ads.

“The FDA doesn’t have authority to pull ads,” Steven Findlay, of Consumers Union, told the Center. Even in exercising the power it does have, “it’s not vigilant enough—not hard enough in punishing companies [that refuse to comply with its warning letters].”

Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, acknowledged in 2000 that the FDA did not have the resources for a scientific evaluation of the impact of ads aimed at consumers. And the trend is unmistakable: since the FDA Modernization Act relaxed agency rules in 1997, the market for direct-to-consumer drug advertising has grown from $791 million to nearly $4 billion in 2004.

Lack of resources

In fact, a resource crunch is at the heart of many of the problems plaguing the FDA. The agency regulates more than $1 trillion worth of products—almost 10 percent of the country’s GDP. Not only does it regulate the $280 billion U.S. drug industry, but also the food industry, cosmetics and any number of products that Americans use in their daily lives, from medical devices to lasers and microwave ovens.

But while the size and scope of the industries it regulates have increased substantially, FDA’s resources have increased only modestly.

Pfizer, the world’s largest pharmaceutical company, saw its revenues grow from $11.3 billion in 1996 to $52 billion last year. The global drug business has almost doubled since 1998, from $289 billion to $550 billion last year. The sale of prescription drugs more than tripled from 1990 to 2001, according to a study by the Henry J. Kaiser Family Foundation. Promotional spending on drugs more than doubled from $9.2 billion in 1996 to $19.1 billion in 2001, the study revealed.

By comparison, the FDA’s growth has been much more modest. The agency employs almost 11,000 people today, up from 8,200 in 1979. The budget has increased from $327 million (a little less than $750 million in 2004 dollars) in 1980 to $1.7 billion last year, including user fees. (The FDA expects to collect more than $284 million in user fees this year.) The Center for Drug Evaluation and Research, the largest of the FDA’s five centers with responsibility for assuring the safety and effectiveness of the drugs available to Americans, has a budget of less than $500 million—a fraction of the promotional spending by the drug industry.

Former FDA commissioner Donald Kennedy, who headed the agency for 26 months beginning in April 1977, blames Congress for being “stingy” with the agency . “They are quick to complain about it,” he told the Center. “But they don’t give it very much in the way of resources.”

But Congress has made sure that at least one division of CDER is funded adequately: the drug approval division.

The Prescription Drug User Fee Act, enacted in 1992, imposed fees on companies applying for drug approval. The bulk of those fees go toward paying the salaries of employees hired to speed up that approval process. And because few of those user fees are channeled into safety monitoring, critics such as Angell complain that the FDA is putting more premiums on faster drug approvals than on drug safety.

“What we have is an FDA in which safety monitoring is woefully under-funded and under-supported in every way in favor of reviewing drugs faster,” she said.

Victoria Kreha, Alexander Cohen, Kevin Boettcher and Emily McNeill contributed to this report.

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