Friday, May 23, 2008

Local firms to get boost from FDA ruling

By Ryan McBride

Some life sciences companies may groan about regulators’ new efforts to scrutinize the safety of their products, but Massachusetts technology firms are making the most of the situation.

Due to the fallout from such troubled drugs as Vioxx, the U.S. Food and Drug Administration has set higher standards for monitoring the safety of approved treatments — great news for Boston-area software firms Outcome Sciences Inc. and Phase Forward Inc., both of which provide technology for post-market studies of medical products.

In recent weeks, the FDA has informed the public of its plans to beef up its staff devoted to monitoring the safety of drugs and medical devices approved by the agency. And executives in the business of supplying products for safety studies believe the agency’s move is a positive development for their companies.

“It’s absolutely going to have a positive effect on our business,” said Richard Gliklich, chief executive officer of Outcome Sciences, a privately held firm based in Cambridge. Last week Outcome hosted a conference focused on trends in post-approval studies in Boston, where FDA Deputy Commissioner Janet Woodcock was a featured speaker.

The FDA has said it would boost its post-market safety surveillance to comply with the Prescription Drug User Fee Act, which was reauthorized by President George W. Bush in September 2007 when he signed the Food and Drug Administration Act. The latter act authorizes the agency to spend $25 million per year to enhance drug safety through 2012.
This could mean that life sciences companies, less than 40 percent of which are estimated to conduct their post-approval studies on time, would kick into full-gear efforts to measure the safety of their approved products.

Still, monitoring the safety of approved medical treatments has been a regulatory theme for several years, and the positive impact of the FDA’s latest push on this front for such companies as Outcome and Waltham-based Phase Forward could be overstated, said Phase Forward CEO Robert Weiler.

“The mandated studies that the FDA is talking about are on those drugs that are approved and have high risk,” Weiler said. As it is, he noted, the agency only approved 15 drugs in all of 2007, and publicly traded Phase Forward has seen 20 percent annual revenue growth in its products for post-market safety studies while its business for clinical trials software have increased about 30 percent per year.

Gliklich said Outcome has received many calls from customers about the FDA mandates, yet it could be months before the changes affect the bottom line at the company.