1

DEPARTMENT OF HEALTH AND HUMAN SERVICES

FOOD AND DRUG ADMINISTRATION

CENTER FOR DRUG EVALUATION AND RESEARCH

PULMONARY-ALLERGY DRUGS ADVISORY COMMITTEE

Thursday, June 10, 2004

8:03 a.m.

Holiday Inn Gaithersburg

The Ballroom

Two Montgomery Village Avenue

Gaithersburg, Maryland

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PARTICIPANTS

Vernon Chinchilli, Ph.D., Acting Chair

Shalini Jain, PA-C, MBA, Executive Secretary

MEMBERS

Carolyn M. Kercsmar, M.D.

Fernando D. Martinez, M.D.

Theodore F. Reiss, M.D. (Industry Rep)

Michael Schatz M.D., M.S.

Karen S. Schell, RRT, (Consumer Rep)

Erik R. Swenson, M.D.

SPECIAL GOVERNMENT EMPLOYEE CONSULTANTS (VOTING)

T. Prescott Atkinson, M.D., Ph.D.

I. Marc Moss, M.D.

Wayne Mitchell, M.D.

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C O N T E N T S

PAGE

Call to Order and Opening Remarks:

Vernon Chinchilli, Ph.D. 5

Introductions 6

Conflict of Interest Statement:

Shalini Jain, PA-C, MBA 7

Opening Remarks:

Robert Meyer, M.D. 10

History of the Montreal Protocol and 21 CFR 2.125 13

Medical Considerations:

Eugene Sullivan, M.D. 40

Economic Considerations:

Randall Lutter, Ph.D. 60

Questions from the Committee to the Speakers 76

Open Public Hearing (1)

Pamela Wexler, U.S. Stakeholders Group 93

Elaine Jones, Ph.D. GlaxoSmithKline 104

Ron Garutti, M.D., Schering-Plough 119

Open Public Hearing (2)

Ballard Jamieson, Jr., International 143

Pharmaceutical Aerosol Consortium

Neil Flanzraich, IVAX Corporation 149

Richard Rozek, Ph.D., National Economic 162

Research Associates

David Doniger, Natural Resources 172

Defense Council

Joseph Rau, M.D., American Association 181

for Respiratory Care

Jodi Finder, Asthma Therapy Coalition 183

Steven Bernhardt, M.D., 190

Honeywell Chemicals

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C O N T E N T S (Continued)

Open Public Hearing (2) (Continued)

Nancy Sander, Allergy and Asthma Network 193

Mothers of Asthmatics

Anthony Marinelli, M.D., American 198

Thoracic Society

Ira Finegold, M.D., College of Allergy, 203

Asthma and Immunology

Spenser Atwater, M.D., Joint Council on 207

Allergy, Asthma and Immunology

(statement read by Ms. Jain)

Committee Discussion 211

Adjournement 282

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P R O C E E D I N G S

Call to Order and Opening Remarks

DR. CHINCHILLI: Good morning, everyone.

This is a meeting of the Pulmonary-Allergy Drugs

Advisory Committee. We are here today to discuss

whether the use of chorofluorocarbons as

propellants in albuterol-metered dose inhalers in

no longer an essential use under the criteria as

set forth in the Code of Federal Regulations 12 CFR

1.125.

My name is Vern Chinchilli. I am the

Acting Chair today for the committee. So we will

have some opening remarks. The first thing I

usually do is introduce\--I will ask each committee

member\--we will go around the table\--to introduce

themselves. Please make sure you hit the

microphone button so it is on.

Why don\'t we start with Dr. Reiss. Oh; he

is not here? Dr. Atkinson?

DR. ATKINSON: I am Prescott Atkinson,

Allergy and Immunology at University of Alabama in

Birmingham.

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DR. SCHELL: Karen Schell, Consumer

Representative from Kansas.

DR. MARTINEZ: I am Fernando Martinez from

the Arizona Respiratory Center, University of

Arizona.

DR. SCHATZ: I am Michael Schatz, Allergy

and Immunology, Kaiser Permanent, San Diego.

DR. KERCSMAR: Carolyn Kercsmar, pediatric

pulmonology, Rainbow Babies and Children\'s Hospital

in Cleveland.

DR. MOSS: Mark Moss, Pulmonary and

Critical Care, Emory University in Atlanta,

Georgia.

DR. CHINCHILLI: Vern Chinchilli. I am a

biostatistician from the Penn State Hershey Medical

Center.

MS. JAIN: Shalini Jain, Exec Sec, Acting,

and, at this point, for this meeting for the

Pulmonary-Allergy Drugs Advisory Committee.

DR. SWENSON: Erik Swenson, Pulmonary and

Critical Care Medicine at the University of

Washington in Seattle.

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DR. LUTTER: Randy Lutter, Economics, with

the Office of the Commissioner in FDA.

DR. MITCHELL: Wayne Mitchell, Office of

Regulatory Policy in the Center for Drug Evaluation

and Research. I am the draftsman on the rule.

DR. SULLIVAN: I am Gene Sullivan. I am

the Deputy Director of the Division of Pulmonary

and Allergy Drug Products at FDA.

DR. MEYER: I am Bob Meyer. I am the

Director of the Office of Drug Evaluation II in the

Center for Drugs at FDA.

DR. CHINCHILLI: Thank you, everyone, for

attending.

Next, Shalini Jain will talk about the

Conflict of Interest Statement.

Conflict of Interest Statement

MS. JAIN: The following statement

addresses the issue of conflict of interest with

respect to this meeting and is made part of the

record to preclude even the appearance of such at

this meeting.

Based on the agenda, it has been

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determined that the topics of today\'s meeting are

issues of broad applicability and there are no

products being approved at this meeting. Unlike

issues before a committee in which a particular

product is discussed, issues of broader

applicability involve many industrial sponsors and

academic institutions. All special government

employees have been screened for their financial

interests as they may apply to the general topic at

hand.

Because there has been reported interest

in pharmaceutical companies, the Food and Drug

Administration has granted general-matters waivers

to the special government employees who require a

waiver under Title 18, United States Code Section

208 which permits them to participate in today\'s

discussion.

A copy of the waiver statement may be

obtained by submitting a written request to the

agency\'s Freedom of Information Office, Room 12A-30

of the Parklawn Building. Because general topics

impact so many entities, it is not prudent to

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recite all potential conflicts of interest as they

apply to each member, consultant and guest speaker.

FDA acknowledges that there may be

potential conflicts of interest but, because of the

general nature of the discussion before the

committee, the potential conflicts are mitigated.

With respect to FDA\'s invited industry

representative, we would like to disclose that Dr.

Theodore Reiss is participating in this meeting as

an industry representative acting on behalf of

regulated industry. Dr. Reiss is employed by

Merck.

In the event that the discussion involves

any other products or firms not already on the

agenda for which an FDA participant has a financial

interest, the participants are aware of the need to

exclude themselves from such involvement and their

exclusion will be noted for the record.

With respect to all other participants, we

ask, in the interest of fairness, that they address

any current or previous financial involvement with

any firm whose products they may wish to comment

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upon.

Thank you.

DR. CHINCHILLI: Thank you, Ms. Jain.

We are ready to start the regular part of

the agenda. Dr. Meyer, the Director of the Office

of Drug Evaluation II, will have some opening

remarks.

Opening Remarks

DR. MEYER: Good morning. Although I

service Director of the Office of Drug Evaluation

II in the Center for Drugs, I, for many years,

served for the Center Lead on issues related to the

Montreal protocol and phase-out of CFCs from

FDA-regulated medical products, specifically MDIs

for asthma and COPD.

So, on behalf of the FDA, I wish to

welcome all the participants in today\'s meeting of

the Pulmonary and Allergy Drugs Advisory Committee.

I want to thank you in advance for your time and

your efforts and your thoughtfulness in your

discussions and advice.

When we were originally planning this

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meeting, we had hoped the meeting would coincide

with the open public comment period of a proposed

rule to delist albuterol as an essential use of

ozone-depleting substances, specifically CFCs.

This is now, indeed, the case although the rule

just went on display at the Federal Register and,

subsequently, on our web page yesterday afternoon.

I believe you have been provided copies.

I would point out that, although the

proposed rule is posted on these sites, it is not

officially published until June 16 so what you have

in hand is a pre-publication version that means

some dates are missing and the pagination will

change when it is officially published in the

Federal Register.

I would also point out that the six-day

comment period starts on the day of official

publication which will be June 16 although,

clearly, the discussions today will be considered

as part of the docket for us to consider in coming

to the final rule.

We particularly look foreword today to

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input from the public in our public hearing portion

of the meeting and I thank those individuals and

organizations who are presenting or have otherwise

submitted materials for the record.

All of the presentations, submissions and

the deliberations of the committee and advice given

today will be entered into the docket, as I said,

and will help us to move forward towards finalizing

this rule with a target of Summer of 2005.

I would note to the committee that we are

not seeking any formal votes today on a particular

question but do, very much, seek your counsel on

the matter at hand whether the use of CFCs in

albuterol metered-dose inhalers remains an

essential use under the provisions of our

regulations.

We will have three speakers from the FDA

today. I will first speak, giving a history of the

Montreal Protocol and FDA\'s regulations regarding

essential use of CFCs. Dr. Eugene Sullivan, from

the Division of Pulmonary and Allergy Drug

Products, will then follow with considerations

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related to the current situation with albuterol and

its essentiality as well as some related issues.

To close FDA\'s presentations, Randy

Lutter, who is FDA\'s Chief Economist in the Office

of Planning, will speak on economic considerations

related to the potential for delisting albuterol as

an essential use.

Again, we would like to thank you for your

time in being here and look forward to today\'s

discussion.

DR. CHINCHILLI: Thank you, Dr. Meyer.

I believe you are on the agenda next for

your presentation.

History of the Montreal Protocol and 21 CFR 1.125

DR. MEYER: Good morning, again, from this

venue. When I arrived at the agency about ten

years ago this July, I can assure you that I never

envisioned I would be standing here representing

the FDA on the issue of ozone protections. As a

pulmonologist, it was not something that entered my

mind at that point.

But life is full of happy occurrences.

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This picture on my title slide is from NASA\'s web

page and shows the largest recorded ozone hole over

the Antarctic which actually was shot last

September of 2003. This serves as a fitting

graphic to start a talk on the history of the

Montreal Protocol as well as the FDA regulations

that related to chlorofluorocarbons and

ozone-depleting substances.

The stratosphere is a region of the

earth\'s atmosphere that begins roughly ten to

fifteen kilometers above the earth\'s surface,

depending on the particular part of the earth one

is focused on, and extends up to 50 kilometers.

Most of the ozone, over 90 percent of the ozone, in

the atmosphere is in this stratosphere where it

acts, in part, to filter ultraviolet B radiation by

absorbing this band of wave length from sunlight.

Increases in UV-B reaching the earth\'s

surface are detrimental to human health in a number

of ways as well as to other life forms and to

synthetic materials. The human consequences of

most note are increases in skin cancer as well as

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cataracts and alterations in immunity. Those skin

cancers are both of the melanoma type as well as

non-melanoma.

This, then, is the background as to why

there is a worry about protecting the ozone layer.

Also, by way of background, since we are talking

about regulations, I would like to explain how

rules are made. The FDA operates under laws or

statutes, most notably the Food, Drug and Cosmetic

Act, as well as other statutes.

However, no matter how well written or

detailed a law may be, it cannot provide sufficient

detail to inform the specific process of

regulation. This is accomplished by the writing of

rules which, when finalized, have the force of law

behind them as it represents the agency\'s

implementation of the respective law that we are

operating under.

The usual pathway for reaching a final

regulation or rule is by what is called Notice and

Comment Rulemaking. Formally, that involves the

FDA publishing a Notice of Proposed Rulemaking, or

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NPR, in the Federal Register such as will shortly

occur for albuterol.

An NPR typically has a comment period

between 60 and 90 days\--again, that, for the rule

at hand is 60 days beginning on June 16\--during

which time comments from the public, including the

regulated industry, are solicited. These comments

are then individually considered and addressed in

reaching a final rule. Rulemaking is an integral

part of the CFC non-essentiality determinations. I

will speak more on this later.

The purpose of my talk, then, this

morning, is to give a history and background of the

Montreal Protocol and to FDA\'s regulations with

regard to ozone protection. The timeframes for

these, as they developed, overlap and, obviously,

the efforts intersect. So I will interweave the

two topics in my talk.

Back in the mid-1970s, two scientists

operating out of trial University of California at

Irvine posited that chlorofluorocarbons were

reaching the stratosphere were UV radiation slowly

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would cleave off the chloride atoms that, in turn,

catalyze the destruction of ozone. This work was

by Molina and Rowland, who later was awarded the

Nobel Prize.

At the time that this article came out,

chlorofluorocarbons, or CFCs, were ubiquitous in

use in multiple applications. They became

widespread for a number of reasons. Amongst these

were that CFCs are quite non-toxic which,

parenthetically, makes them excellent for use in

inhalers, very stable and had physical-chemical

properties that were advantageous for use in

refrigerant systems, air conditioners and aerosols.

The stability of these gasses is, in part,

why they are so devastating to the stratosphere.

They have a very long half-life when they reach the

stratosphere and, therefore, damage the ozone layer

for many, many years.

In 1978, really in a fairly remarkably

short time after the seminal publication by Rowland

and Molina, the U.S. Government acted to address

the issue of CFCs and to place a general ban on the

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use of CFCs as propellants in consumer aerosol

products. This was accompanied by a rule from FDA

in the relevant chapter of the Code of Federal

Regulations or what we call the CFR, and that, for

the FDA, is the 21st Chapter, banning the use of

CFCs in all regulate products except for those

deemed as essential uses.

This rule is now called 2.125 because that

is the citation where it is published. That is how

we will be referring to it throughout much of the

day. Notably exempt at that time were broad

classes of asthma and allergy products such as a

nasal steroids, the inhaled steroids, and

adrenergic bronchodilators.

In 1987, as the science of ozone depletion

advanced and as there was further evidence

accumulated about ozone reductions, a global treaty

known as the Montreal Protocol on substances that

deplete the ozone layer was initiated. At that

time, 27 nations, including the USA, were

signatories.

I would note, just to make this topical to

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sort of current events, that this was during the

latter years of the Reagan Administration. The

original protocol now has at least 184 signatory

countries. As of the time that I queried the web

page for the Secretariat of the Ozone Efforts about

a month, it was 184 countries. Countries are also

called parties under the terms of the protocol.

This is widely considered a successful

example of global, environmental cooperation.

Indeed, there is evidence that the chloride levels

in the stratosphere have stabilized in recent years

and it is expected that the stratospheric ozone

layer will slowly recover to levels that were seen

in the early 1980s by the middle part of this

current century.

The original phase-out of CFCs was slated

for the Year 2000. That was taken in London in

1990\. This was moved up, however, by meeting of

the parties in Copenhagen which occurred in 1992.

It was moved up to 1995, at the end of \'95, because

of increasing evidence of marked ozone depletion,

particularly over the extreme southern hemisphere,

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as you saw in my first slide.

This phenomenon is commonly called an

ozone hole. It is not really a true hole but an

area of extreme depletion. I should point out

that, although it is a depletion that is

particularly prominent over the southern

hemisphere, it has occurred globally.

I should also point out that, while we are

focussing on CFCs today because that is the

relevant topic for the FDA, the protocol, itself,

has controls on many other ozone-depleting

substances such as halons, HCFCs, methylbromide,

carbon tetrachloride and other substances.

So, while the CFCs are an important issue

to FDA and, indeed, to the Montreal Protocol, I do

want to be clear that the protocol is a much

broader effort in scope than simply the

chlorofluorocarbons.

In accordance with the Copenhagen

Amendment to the protocol, the production and

importation of CFCs became illegal in economically

developed countries including the United States as

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of January 1, 1996. The rest of the world is

expected to have phased out new CFCs by 2010.

Metered-dose inhalers, or MDIs, for asthma and COPD

are currently considered as potentially acceptable

essential uses of CFCs. I say potentially

acceptable because there is a nomination process

that parties undergo if they want to produce or

import CFCs for use in MDIs.

These nominations have to be done annually

and the process generally begins nearly two years

prior to the year in question. So, for instance,

the U.S. had to submit its nomination for 2006 in

early 2004.

I would also point out that nominations

are historically approved by consensus of the

parties to the Montreal Protocol but, actually, if

the consensus process fails, there is a mechanism

within the protocol to default to a two-thirds

majority decision.

I wanted to go through sort of how the

protocol has evolved over time This is a decision

of the parties from the Copenhagen meeting.

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Decision IV, or this IV, means that it was from the

fourth meeting of the parties and it was the 25th

decision taken at that meeting. This was the

definition at the time that they decided the

phase-out would begin on January 1, 1996, or the

ban on CFCs, that stated that, \"All essential uses

of CFCs would have to be based on products being

necessary for public health and that there were not

adequate alternatives.\" The failure to have

adequate alternatives could either be based on

technical problems or economical problems.

But this was macroscopic in terms of both

this determination as well as the general use. In

other words, it was widely accepted at that point

in general that the uses of CFCs and MDIs for

asthma and COPD could be considered an essential

use.

However, over time, the protocol evolved

so that, as the phase-out progressed, as

alternatives became available, this sort of more

generally and broad interpretation of what was an

essential use became narrower and narrower in

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scope.

In Beijing, at the twelve meeting of the

parties in the Year 2000, another decision was

taken that said that any product approved after

December, 2000, must individually meet these

criteria for essentiality under Decision IV-25.

So, in other words, it is not just a general

consensus any longer that the use of CFCs for

asthma and COPD was acceptable but, in this case,

any new product would have to individually meet

this.

So this was a product-centered

determination of essentiality that essentially

precluded new CFC generics and, actually, many

other new CFC products. It essentially was

shutting the door, for all intents and purposes,

except under extraordinary circumstances for any

new CFC MDIs.

This past year, in Nairobi, a further

decision was taken by the parties that became even

more narrow and specific in scope. It stated that

essential-use nominations from parties which, in

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the past, had been lumped and general and not

parsed out for the purposes of the protocol\'s

evaluation, or the Montreal Protocol evaluation.

Now it stated that essential-use

nominations have to be specific; for example, a

country might say they need some

undetermined\--well, they would have to give a

specific number, but some number of tons for

albuterol. No quantity of essential-use CFCs would

be authorized for albuterol. This is, I think,

particularly germane today\--that no quantity of

essential uses of CFCs would be authorized,

period\--actually, this is a little bit of a

misstatement in the way this is terms\--if a country

does not submit to the meetings of the

party\--beginning of the open-ended working group,

excuse me, in the summer of 2005\--a clear plan for

when albuterol, specifically, would no longer be

essential.

Let me go through that again, because this

is key. Countries who request essential uses,

including the United States, will have to submit to

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the Ozone Secretariat of the Open-Ended Working

Group in the summer of 2005 a plan or a

date-certain for when albuterol will no longer be

considered essential. If parties fail to do that,

including the U.S., we will not receive and

essential-use allocation at all.

Now, turning a little bit from the

evolution of the Montreal Protocol back to our

rules and regulations, the Clean Air Act Amendments

of 1990 codified the Montreal Protocol into U.S.

law. The implementing EPA regulations specifically

call for FDA to define what is an essential medical

use and refers to our 2.125 as the source of the

listing of those essential products.

I remind you, however, that 1.125 was

finalized before the Montreal Protocol existed and

before the Clean Air Act Amendments.

The rule, as promulgated in 1978, stated

that a CFC-containing product regulated by FDA was

misbranded or adulterated under the FD&C Act; that

is, it would be illegal under our authority unless

deemed essential and listed in 2.125. The

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definition of essential was that there would be no

technically feasible alternatives; that the use of

CFCs in that particular product provided

substantial health, public or environmental

benefit; and that the release of the CFC was small

or justified given the public-health benefit.

Notably, the FDA rule had no mechanism to

determine when things were no longer essential and,

therefore, to delist them. It did have ways to add

new classes of drugs to the list and, in fact, that

was done over the years. But it had no specified

way for delisting things.

Another important feature of the rule that

needed to be correct is that many drugs, including

albuterol, were not specifically mentioned as

essential uses but, rather, there were broad

definitions of drug classes, if you will, such as

albuterol and other beta-agonists being under the

general term of adrenergic bronchodilators for

human use.

So, realizing that we needed to correct

some things about this rule that was written prior

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to the Montreal Protocol and the Clean Air Act, and

specifically to develop a mechanism for delisting

things that were no longer essential, FDA, in 1996,

undertook revisions. Because of wanting to do

these revisions in the very most public and

informed manner, the FDA took an additional step to

the steps that I gave you earlier for the

publication of a rule, doing something called an

Advance Notice of Proposed Rulemaking which,

actually, starts with another cycle of notice and

comment.

This effort proved very successful if

measured by the number of comments. We got close

to 10,000 comments to this Advance Notice of

Proposed Rulemaking, many of which, I would point

out, were actually patient-based comments sparked

by lobbying efforts.

We then took all 10,000 comments and

reviewed them and responded to them. I would note

that there were many fewer substantive comments but

still all of the comments were carefully reviewed

and considered. That resulted in the publication

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of a Notice of Proposed Rulemaking in 1999.

That proved to be less controversial in

many ways and it received many fewer substantive

comments and comments overall and, as I said, had

seemingly much less controversy. So FDA moved

forward with amending 2.125 in July of 2002 and

this went into effect six months later.

The 2002 revisions did a number of things.

First of all, it listed essential uses as

individual moieties. I would point out that, to

coincide more correctly with the Montreal Protocol,

it no longer referred simply to chlorofluorocarbons

but to ozone-depleting substances. But, for the

purposes of today and for all intents and purposes,

most of FDA\'s activities, you can consider ODS, or

ozone-depleting substances, as being synonymous

with CFCs in terms of this discussion.

So, for instance, albuterol is now

separately listed rather than there just being a

broad class without any citation of individual

moieties.

The revisions also added a higher hurdle

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for investigational new drugs to be developed with

CFCs and it raised the bar for new listings of

essential uses as well. There was also a list of

criteria, importantly for today, for determining

when individual uses were no longer considered

essential.

One other revision I would point out that

is not on this slide was that we shifted the rule,

because of the re-write of the Clean Air Act, to

state that if something was no longer essential, it

would be considered illegal to market it under the

Clean Air Act and not under the Food, Drug and

Cosmetic Act.

Let me go through these important

nonessentiality criteria. I would point out that

Dr. Sullivan will revisit these in his talk

specific to albuterol, but I think they are worth

hearing a couple of times.

For a specific moiety to be considered

nonessential, there would have to be at least one

non-ozone-depleting-substance product\--in other

words, a non-CFC product\--with that same active

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moiety, and here I am only talking about a moiety

where there is only one marketed-brand product or

one marketing strength, so, at least one active

moiety with the same indications, same route of

administration\--in other words, oral albuterol

would not be considered an alternative under these

criteria\--and about the same level of convenience.

We stated in the preamble to the final

rule that, although dry-powdered inhalers might fit

this description, we felt that MDIs would most

neatly do so and, I think, most logically do so.

In addition to this, these alternatives

would have to have adequate postmarketing data to

prove that they are not only safe and effective for

approval purposes but will serve as an adequate

alternative in the marketplace. Importantly, there

would have to be production capabilities and

supplies that are adequate to meet the needs of

patients who depend on the use of this moiety for

the treatment of their asthma or COPD and patients

who require the CFC product are adequately served.

I would state, and I am sure that Gene

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will bring this up as well, that, under the

considerations for adequately served, is the issue

of price in that\--not so much whether there will be

any impact on the price to the patients but will

patients be disaffected or unable to get the

medicine if there is a price differential.

We didn\'t build that in as an explicit

consideration, the cost issue, but it was mentioned

in the preamble because many of the comments to the

ANPR and to the PR as we developed this re-write of

2.125, brought up the issue of affordability.

Now, specific to albuterol which

has\--actually, this should say one branded product

available and three generics marketed\--for moieties

with more than one available product or strength

such as albuterol, you would need at least two

non-ozone-depleting-substance products with the

same active moiety, the same indication, route of

administration, about the same level of

convenience, and the other criteria were the same.

So, in other words, if the moiety was

represented in the marketplace by different

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strengths or different numbers of products from

different manufacturers, we felt it important that

there be sort of at least\--if not a full match to

the range, at least alternatives that represented

some choice.

Let me just show you, to wrap up this

background, where all this has led over time. This

is a graph of the global situation for CFC

essential uses. Let me go through the two lines

here. This is 1996. The open space is actually

the year, not the hatch mark, so we go from 1996

out to 2006 on the X axis. On the Y axis, we are

talking about metric tons. A metric ton is 2200

pounds, so these are metric tons of total CFC used

for essential-use allowances in these developed

countries.

The red line is the amount that was

exempted\--in other words, the amount that was

nominated and approved by the parties. The blue

line is the amount that was actually used over

time. The green line is the stockpiles. So these

are the amounts held by the countries that don\'t

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represent new production.

You can see that the peak of the use

worldwide, or at least in these developed countries

that were putting in essential uses, was just about

9,000 metric tons occurring in the 1997-1998 range.

This has fallen by 2003 down to just a little bit

over 4,000 tons. One would project from the amount

nominated, which generally has been historically

higher than the amounts actually used, that this

will further fall in the coming two years rather

dramatically. So the amounts nominated in 2006 are

down below 3,000 metric tons.

I apologize for this being a little harder

to see. I could not manipulate this as easily as

the last one. But this is the situation for the

United States, itself. Again, this is metric tons

per year on the Y axis, years on the X axis. I

know that will be very difficult for people in the

audience to see but the main point here is this is

the blue line, which is the amount used for

metered-dose inhalers in the United States.

You can see, for the most part, that it

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has been reasonable stable from the

pre-Montreal-Protocol years through the time period

of the Montreal Protocol, although there was a

rather substantial fall in the last couple of

years\--this goes out to 2002\--at which time the

total use was just a little bit over 1500 metric

tons in the United States. I would point out that

the use for albuterol is a substantial portion of

the United States nomination.

Let me also now talk about the transition

within the United States, itself. What we have

here is a slide that attempts to display the

original listings under the 2.125 and then the

specific listings under 2.125, and then to display

changes over time.

So, originally, 2.125 had the broad class

of beta-adrenergic agents: inhaled corticosteroids;

nasal steroids; the cromones\--cromolyn and

nedocromil were actually separately listed;

ipratropium; atropine, which was actually approved

for use in Desert Storm; a combination product,

albuterol and ipratropium.

35

I think it is important for me to point

out, if Dr. Sullivan does not and if it is

repeated, I think it is still and important thing;

we are not talking about a combination product

today. We are only talking about those products

that solely contain albuterol as their active

ingredient; and then a number of other products,

many of which were actually, as you can see, not

MDIs. So we had talc, contraceptive foams, rectal

foams, ergotamine MDIs, polymxin, anesthetic drugs

including those that directly use CFCs, and

nitroglycerine.

When the re-write of 2.125 was finalized

in 2002, those products listed in red were taken

out, many of these because they either did not meet

the criteria any longer or were not considered

essential under the Montreal Protocol, or they were

no longer marketed.

So, at the time of the finalization,

isoetharine, isoproterenol, the nasal steroids as a

class, contraceptive foams, rectal foams, polymyxin

and nitroglycerine all came out and were not

36

separately listed in 2.125.

The products in yellow could be considered

as potential for delisting soon, these because they

are no longer available, marketed as CFC products.

One of the things in 2.125 re-write that was said

was that, if a product was not marketed for a

substantial period of time, one could consider it

to be not essential. Those would include

bitolterol, salmeterol, which was discontinued by

the manufacturer, dexamethasone, talc, ergotamine

MDIs and anesthetic drugs.

Beclomethasone is no longer marketed, the

MDIs, at least not newly produced MDIs, and there

are alternatives. So that is another potential

delisting. Albuterol, I guess I did not put in

yellow here because that is what we are here to

discuss today is whether that has met the criteria

that we laid out in the revisions of 2.125.

So, to conclude my talk, the U.S.

Government moved proactively to address the issue

of ozone depletion shortly after the development of

the ozone science, and the U.S. Government had a

37

key role in the formation and the conduct of the

Montreal Protocol. The Montreal Protocol is

considered a successful treaty that has led to

important reductions in CFCs and other

ozone-depleting substances and, as I mentioned,

there are data to suggest that the recovery of the

stratospheric ozone layer is in the early stages.

Now, the Montreal Protocol, as I pointed

out from the evolution of some of the decisions

taken, is increasingly moving towards control in

its specific essential uses, notable amongst those

would be albuterol.

Just as a transition slide, I chose

another picture off the NASA web page of the ozone

depletion. Remember that I said we would recover

to the early \'80\'s levels by the mid part of this

century. This shows the Antarctic region in 1983

and the Antarctic region in 1993. You can see the

difference where the white is the thicker ozone.

You can see the difference in the ozone layer in

that decade.

So, thank you very much.

38

DR. CHINCHILLI: Thank you, Dr. Meyer.

You finished a few minutes early so let\'s

see if there are any questions from our committee

members. I have one, Dr. Meyer. What was the

rationale behind the decision about not pursuing

this with the\--not considering the dry-powdered

inhalers as a similar moiety?

DR. MEYER: What we said was that we

thought they could serve as an alternative but it

would not be as automatic as an MDI. So, in fact,

I think if there were an albuterol dry-powdered

inhaler that met those criteria otherwise, we would

consider it.

I think, at the time we were writing it,

we had considerations such as, at that point,

albuterol was available in a capsule, an individual

capsule, rotohaler-type device where one would

place it in, turn it and breathe. We did not feel

that that had sort of the same level of convenience

and portability and so on as an MDI. So I think we

wanted to not exclude all dry-powdered inhalers out

of hand but say that they would have to meet

39

certain levels of convenience and patient

acceptability.

Again, the presumption in the preamble to

rule was that the MDIs would most neatly do that

because they are very much similar.

DR. CHINCHILLI: Dr. Martinez?

DR. MARTINEZ: Dr. Meyer, in your

multicolored slide, there was some products in

white. I presume those will continue to be

available by way of CFCs and includes epinephrine,

for example; is that correct?

DR. MEYER: Some of those products in

white are, in fact, under development in that are

alternatives being developed. Some are not. One

of the provisions in the rule that I didn\'t bring

up today because it wasn\'t fully germane but I

would be happy to answer as a part of your question

is the fact that, beginning next year, we will have

the ability to call this body into meetings, have

the advisory committee come to meetings, to discuss

those products that remain on the list that are not

being reformulated and whether they remain

40

essential.

I think, just parenthetically, epinephrine

will be something that will be important for us to

discuss at some time in the future.

DR. CHINCHILLI: Any other questions from

the committee? If not, thank you, again, Dr.

Meyer.

I guess we will move forward with Dr.

Sullivan, the Deputy Director of the Division of

Pulmonary Drug Products.

Medical Considerations

DR. SULLIVAN: Good morning. I am Gene

Sullivan. I am a pulmonologist. I am also the

Deputy Director of the Division of Pulmonary and

Allergy Drug Products at FDA. For the next twenty

or thirty minutes, I am going to be discussing some

of the medical considerations in regard to this

proposal to remove albuterol from the list of drug

substances that are considered essential uses for

CFCs.

Following my talk, you will hear from Dr.

Lutter, as Dr. Meyer mentioned. Dr. Lutter will go

41

into more depth in regard to the economic aspects

of this question. Then, following that, you will

hear some very important information from

interested parties who will be speaking during the

open public hearing.

So this slide provides a background

overview of my talk. Dr. Meyer has just given a

very nice background on the overarching issues

about the Montreal Protocol and the FDA Regulation

2.125, so my background remarks will be brief.

Then, also, briefly, I will review the currently

marketed albuterol MDI products. But the bulk of

my talk will be in this section specifically

looking at the criteria that Dr. Meyer mentioned

that are included in the Amended 2.125, so the

currently existing regulation, and specifically

examining those criteria in regard to how they

apply in the case of albuterol.

Then, finally, I will touch on a couple of

other issues which, although they are not directly

responsive to the criteria laid out in 2.125, I

think are clearly important issues to consider when

42

deciding on a path forward with regard to

albuterol.

So, again, Dr. Meyer has provided very

nice background on the Montreal Protocol and on the

FDA regulation concerning the essential-use

determinations, that being 21 CFR 2.125 and, as Dr.

Meyer mentioned, I will be referring to it as 2.125

from now on.

As you know, the agency is currently

considering whether albuterol, in fact, has met the

criteria that are listed in 2.125 for removal from

the list of essential uses. This process that we

are embarking on is in keeping with the goals of

the Montreal Protocol, specifically, the goal of

phasing out production and importation of

ozone-depleting substances including

chlorofluorocarbons.

I think the step forward with albuterol is

an important step in that direction particularly

because approximately half of the annual

essential-use CFC allocation in the U.S. is for

albuterol. We are moving forward in this direction

43

in light of the fact that there now exist two

alternative, non-CFC albuterol metered-dose

inhalers on the market in the U.S., that being

Proventil HFA and Ventolin HFA.

In addition, in 2003, the American Lung

Association submitted a citizen petition on behalf

of a group of organizations, collectively referred

to as the U.S. Stakeholders Group. That petition

requested that the agency move forward with this

rulemaking process in order to remove albuterol

from this list.

That citizen petition is included in your

background materials. Your background materials

also include other communications we received from

the Stakeholder\'s Group as well as the submissions

to the public docket that were submitted by various

interested parties and organizations in response of

the citizen petition.

So what are the currently marketed

albuterol metered-dose inhalers? Obviously, they

can be divided into those that contain CFCs, which

are ozone-depleting substances, and those that

44

don\'t contain CFCs. In terms of the CFC MDIs,

there are several. First of all, there is the

branded product, Proventil, marketed by

Schering-Plough. This was approved in 1981. In

addition, there is a product marketed under a

Warrick label which is marketed under the same NDA.

Then there are several generic versions.

Actually, four have been approved. The first of

these was approved in 1995. Currently, three of

these are being marketed. As you may know, in

1981, there were actually two branded albuterol CFC

MDIs that were approved, the other one being

Ventolin. That is not listed here because it is no

longer marketed within the U.S.

Now moving to the non-CFC MDIs or, and I

will use the shorthand, as alternatives, these

don\'t use CFCs. Rather they use HFA 134A which is

a substance that does not affect the ozone layer.

There are two of these HFA products; Proventil HFA,

which was approved and initially marketed in 1996

and, more recently, Ventolin HFA, which was

approved in 2001 and was marketed in 2002.

45

So this is the regulation, obviously, that

is at the heart of today\'s discussion, 2.125,

called the Use of Ozone Depleting Substances in

Food, Drugs, Devices or Cosmetics. Among a number

of thing, one of the things that it does is it

lists specific drug moieties for which the use of

CFCs is considered essential.

In addition, as Dr. Meyer mentioned, it

sets forth criteria. There are four such criteria

that must be met in order to remove a drug moiety

from the list of essential uses.

I will run through these again. Dr. Meyer

has been through them. I will run through again,

though, because I think they are the heart of

today\'s discussion. First of all, and here I am

referring to active moieties represented by two or

more NDAs which is the case, as I mentioned, with

albuterol.

The first criterion for removing a drug

from the list of essential uses would be that at

least two non-ozone-depleting-substance products

that contain the same active moiety are being

46

marketed with the same route of delivery for the

same indication with approximately the same level

of convenience as the ozone-depleting product.

The second criterion is that supplies and

production capacity for the alterative must exist

or be expected to exist at levels that would be

sufficient to meet patient need.

The third criterion is that adequate

postmarketing-use data should be available for the

non-ozone-depleting products. Again, as Dr. Meyer

mentioned, that is to provide some reasonable

assurance that no unanticipated limitation of the

alternative product emerges during the

postmarketing, so real-world experience that was

not detected prior to approval.

Then, finally, the fourth criterion is

that patients who medically require the product

would be adequately served by non-ozone-depleting

products containing the same active moiety and

other available products.

So now I am going to walk through each of

these criteria and look at how they apply to

47

albuterol. The first criterion; again, at least

two products containing the same active moiety, the

same route of delivery, the same indication and

approximately the same convenience of use. So,

clearly, the alternatives that we are discussing,

Ventolin HFA and Proventil HFA, both have the same

active moiety, albuterol. Both are delivered by

the same route of delivery, oral inhalation, and

carry the same indication, prevention and relief of

bronchospasm and patients with reversible

obstructive airway disease and prevention of

exercise-induced bronchospasm.

I should point out the initial NDA,

Proventil, was approved down to the age of 12 and

Ventolin was approved down to the age of four.

Both of the alternative products are approved down

to the age of four.

Finishing up with the first criterion, the

final bit of it is the same level of convenience.

Now, when we looked at the same level of

convenience, we described, in the Preamble, various

aspects of what we might mean by that. We looked

48

at things like portability, preparation before use

and the physical effort of manual dexterity that

might be needed to administer the drug.

The CFC and HFA MDIs are quite similar and

so have very similar portability and require

similar degrees of physical effort and dexterity to

use. I should mention, in regard to preparation

before use, that, in the early experience with the

first HFA that was approved, the Proventil HFA, we

became aware that there were occasional instances

of clogging of the actuator if they were not

cleaned properly.

Now, the CFC and the HFA inhalers have

actually very similar cleaning instructions. It is

just evident that patients using the HFA inhalers

need to pay more attention to the cleaning

instructions that are already in the label for both

products.

The second criterion is a little bit more

difficult to definitively establish at this point.

This is the criterion that states that supplies and

production capacity for the alternatives need to be

49

at levels that would be sufficient to meet patient

needs. At least in part, because of the price

differential between the generics and the currently

marketed FHA products, the market share for the HFA

products, at this point in time, is much smaller in

comparison than the market share of the CFC

products.

So, if the CFC products were to become

unavailable suddenly today, the current supplies

and production capacity of the HFA alternatives are

not sufficient to meet patient need. That is

because, simply, that the manufacturers would need

time to ramp up production. However,

GlaxoSmithKline, in its statement in response to

the citizen petition submitted to the docket and

included in your background package has stated that

it is confident that additional internal and

external capacity can be installed to insure

adequate supplied and production capacity for

Ventolin HFA and that this could be accomplished

within twelve to eighteen months.

In addition to this statement in the

50

docket, GlaxoSmithKline and, also, Schering-Plough,

will be speaking today and I expect that at least a

portion of their comments may address specifically

this criterion.

The third criterion that we are applying

is that adequate U.S. postmarketing data be

available for the alternatives, again, looking for

unexpected real-world problems with the

alternatives. At this point in time, we have

Proventil HFA which has been marketed for seven

years and Ventolin HFA which has been marketed for

two years.

Apart from the early reports of actuator

clogging that I mentioned, the available

postmarketing use data does not suggest any

problems in terms of safety, efficacy, tolerability

or patient acceptance of these two alternatives.

Perhaps the most difficult of the criteria

to address is the fourth. This is the criterion

that states that patients who medically require the

ODS are adequately served by the alternative. This

term, \"adequately served,\" is fairly broad and it

51

encompasses a number of things.

Clearly, the most important is that the

available data on the alternatives must demonstrate

sufficient efficacy and safety and tolerability and

so forth such that the alternatives could be

considered reasonable replacements for the CFC

MDIs. This type of data was submitted with the NDA

and has accumulated in a postmarketing period and

seems to imply that the alternatives do meet these

criteria.

But there is a further subtlety to the

adequately served phrase here and that is cost. As

Dr. Meyer mentioned, during the process of the ANPR

and the proposed rule, there were comments about

the effect of this rule on the price of

medications. In the Preamble, in the Federal

Register, the Preamble to the 2002 Amendment where

these criteria were established, the FDA clearly

stated that it will consider cost in determining

whether the alternatives meet patient needs.

So I am going to take a couple more slides

to just look at this cost issue a little bit in

52

more depth. As with most drugs, branded CFC

products cost more than their generic counterparts.

As it turns out, in this very complicated

healthcare system that we have in the U.S. in which

the specific price of a medication varies according

to a number of factors including who is paying, it

is somewhat difficult to arrive at \"the\" price of a

drug.

Therefore, it is somewhat difficult to

arrive at a clear statement of the differential

between the cost of a branded product and a generic

product. Dr. Lutter will go into this in a little

bit more depth and talk about the various sources

of data that are available for the price of a

medication and how complicated that issue is.

I have provided on this slide some data

from an FDA website that highlights the cost

savings to a patient that can be achieved with

generic products. The web address is in your

handouts. On this site, data on the average

national retail price, which was data from IMS

Health, were used to generate this information so

53

that the retail cost per day for an asthmatic

patient who used Ventolin would be \$1.44 whereas

the CFC generic would be 69 cents per day.

Of course, this is a comparison between a

CFC generic and a CFC branded, so it is important

to note the branded HFAs, in general, are priced

comparably to the branded CFC products although not

exactly the same price.

The other element to this is that there

are a number of existing patents and, due to these

patents, there are currently no generic HFA

products available. These patents are listed to

expire, the first one in 2010 and the final patent

in 2015. So, given the current realities, the

removal of the essential-use status of albuterol

would result in an increase in the price of

albuterol MDIs.

The public-health consequences of such an

increase in price are not known and are, in fact,

very difficult to predict. One possibility would

be that patients who are prescribed albuterol

metered-dose inhalers may be either unable or

54

unwilling to pay for that and so may not purchase

the albuterol inhalers.

It is also possible that an increase in

the price of an albuterol MDI, which is an

acute-reliever drug from which patients, as you

know, perceive an immediate benefit, might result

in them forgoing filling prescriptions of other

medications such as asthma-controller drugs from

which they don\'t receive the same immediate

feedback. But, as you know, controller drugs are

quite important in the appropriate management of

asthma.

So, as I mentioned, Dr. Lutter will

discuss in greater depth these economic aspects

including descriptions of the various sources of

price data that are available and means for

estimating how changes in the price of albuterol

MDI might affect the utilization.

As I mentioned, that is a difficult task

in and of itself, how will an increase in price of

an MDI translate into a change in utilization of

albuterol and, even if we were able to establish

55

that firmly, the next question that begs answering

would be how does the change in utilization

translate into important health outcomes. Of

course, that is an open question as well.

So, before I close, as I mentioned, I want

to bring up a couple of other issues that are not

directly responsive to the criteria in 2.125 but,

nonetheless, may be quite important in

considerations regarding a path forward on

albuterol. Both of these issues relate to the

future availability of chlorofluorocarbons.

The first issue has to do with production

facilities. Currently, the only source of

pharmaceutical-grade CFC 11 and 12 for use in the

U.S. is Honeywell\'s plant in the Netherlands. CFC

11 and 12 are the particular chlorofluorocarbons

that are contained in the albuterol CFC MDIs.

The Dutch Government has informed

Honeywell that CFC production at that factory will

no longer be permitted after 2005. So that might

jeopardize the supply of CFCs that are necessary

for the manufacture of albuterol MDIs but also all

56

of the other MDIs that use pharmaceutical-grade

CFCs. However, Honeywell has stated in its

submission to the docket in response to the citizen

petition that it will begin production of

pharmaceutical-grade CFC 11 and 12 at a U.S. plant

and will be able to supply CFCs beyond 2005.

Honeywell will also be speaking during the open

public hearing session today.

The second issue that touches on the

future availability of the CFCs refers to potential

actions that might be taken by the parties to the

Montreal Protocol. So, as Dr. Meyer mentioned,

each year the U.S. and other countries who request

to manufacture CFC MDIs, go through a nomination

process whereby specific quantities of CFCs are

requested of the parties.

Thus far, the parties have respected the

U.S. determination that albuterol is, in fact,

essential and have granted the volumes requested by

the U.S. However, more recently, the parties have

very pointed noted the availability of two non-CFC

alternatives within the U.S. and some have

57

questioned the continued need for

chlorofluorocarbons for this purpose. It is not at

all clear how long the parties will continue to

grant CFC requests for use in albuterol MDIs.

So, with that, I will close. I have

listed on this slide the questions or topics for

discussion that have been provided to you in a

handout format. Essentially, the agency is asking

you to discuss the extent to which you believe the

criteria that are established in the 2.125 for

removal of a drug substance from the list of

essential uses of CFCs have been met in the case of

albuterol. Beyond that, we are open to hearing

from you any suggestions of additional data,

additional information or other issues you think

should be considered as we move forward in this

process of determining the essential-use status of

albuterol.

With that, I will close.

DR. CHINCHILLI: Thank you, Dr. Sullivan.

Again, we are ahead of schedule so we can take some

questions from committee members if there are any

58

questions. Yes, Dr. Atkinson?

DR. ATKINSON: Can you comment on whether

the existence of the patents on the new HFA devices

are going to preclude the development of any

generics until that time period? Are there any

pending applications for generic devices?

DR. SULLIVAN: Of course, we can\'t comment

on any pending applications. The analysis of

patents is a complex issue that the FDA doesn\'t

really directly do. Companies claim they have

patents which protect them. If a generic firm

wants to challenge that patent, they can. I think,

beyond that, perhaps I will invite Wayne Mitchell

to comment more specifically, if he can.

MR. MITCHELL: I really can\'t say much

more. We don\'t have any institutional expertise on

patent law. Patents are listed in our Orange Book.

The patents are listed through 2015. That is about

all we really can say.

DR. CHINCHILLI: Any other questions? Dr.

Sullivan, I have a question. In one of your

slides, when you talked about Proventil HFA, you

59

said that early reports of actuator clogging were

available. Does that imply that there are no

longer reports of this problem? Were there

modifications to the device? I just was confused

by the word \"early\" reports of actuator clogging.

DR. SULLIVAN: That refers to the fact

that when the product first went on the market\--and

it is not unusual to get more reports on a

particular drug when it first hits the market, but

the agency became aware that patients were having

problems with the clogging of the actuator and an

effort was made to better publicize the necessity

of cleaning these products because, although the

cleaning instructions were included in the CFC

versions, they may not have been followed by

patients.

It was determined that if the instructions

are actually followed, there are fewer reports. I

believe that the number of such reports has

declined. That was sort of an early phenomenon.

DR. CHINCHILLI: Thank you. Any other

questions? Okay; if not, then we will move on to

60

Dr. Lutter.

Economic Considerations

DR. LUTTER: My name is Randy Lutter. I

manage a small economics group within the Office of

Policy and Planning, Office of the Commissioner at

FDA. It is my pleasure to be here.

I would like to talk to you today about

the question of whether or not delisting albuterol

will have effects on\--whether the patients will be

adequately served by delisting albuterol.

Let me begin by giving you an overview.

The key conclusion is that delisting albuterol CFCs

will deter the use of a number of prescribed MDIs

that is large in absolute terms but small relative

to the market. Our analysis is ignoring an

announced giveaway by GlaxoSmithKline of 2 million

MDIs per year because we lack a basis to evaluate

that quantitatively. We also find that the effects

on public health are too uncertain to quantify.

Let me give you some brief institutional

background of how an economist ends up in the

position of speaking before a group of esteemed

61

pulmonary and allergy advisors to FDA. There is an

executive order, 12866, signed by President Clinton

in \'93 and it actually follows one signed by

President Reagan in \'81. It directs the agencies

to assess the costs and benefits of all regulatory

actions developed through the notice and comment

rulemaking that Dr. Meyer described earlier.

The office that I had at FDA develops the

economic analyses required by that executive order.

The method of economic analysis that we developed

follows the constraints of OMB Circular A-IV which

is the latest in a series of circulars developed by

the Federal Office of Management and Budget

directing agencies on how to conduct economic

analyses.

The executive order directs agencies to

assess the cost and the benefits and to take

regulatory actions which are cost-effective but

economics also is reflected in the decisions of the

Montreal Protocol. Drs. Meyer and Sullivan have

mentioned the term \"essential,\" and \"essential

use,\" turns on whether there are available

62

technically and economically feasible alternatives

or substitutes that are acceptable from the

standpoint of environment and health and that is in

Decision IV-25. Section 2.125 uses the phrase

\"adequately served.\" As described by Dr. Meyer,

that has economic content.

So there are actually three institutional

reasons why economics matters for the current

decision.

A brief discussion of economic

fundamentals. The issue here is that delisting

would remove albuterol MDIs with CFCs. Those are

currently the only generic albuterol MDIs on the

market. Therefore, one would anticipate on that

basis an increase in the price. So the broad

question is whether or not that increase in price

has effects on whether or not patients are

adequately served.

To comply with the executive order, we

need to assess the benefits of delisting and, in

particularly, a relatively earlier delisting as

opposed to a later one, and also the costs of

63

earlier delisting.

The benefits come in four separable

categories. The first is a controlled transition.

You have already heard presentations about the

nature of the international cooperation and the way

that that might affect the availability of CFCs by

offering a relatively\--by proceeding with this

rulemaking, FDA hopes to establish an opportunity

for a controlled transition to CFC-free MDIs.

The second category of benefits is clearly

the environmental ones that Dr. Meyer has

described. Reduced emissions would lead to

reductions in skin cancers, cataracts and

UVB-related ecological benefits. For this, our

proposal, FDA has not been able to quantify the

benefits in terms of skin cancers, cataracts or

UVB-related ecological benefits.

Some analysis in quantitative terms has

been conducted previously by other federal agencies

including the EPA. The difficulty that we face is

in translating their estimates of aggregate

benefits to the benefits from the much smaller

64

reductions of CFC emissions that might be achieved

from this rulemaking, and we haven\'t been able to

do that for this proposal.

A fourth category of benefits pertains to

international cooperation. Dr. Meyer did not

understate in any way the importance of the

Montreal Protocol. It is a flagship treaty for

successful international environmental protection

and it enjoys wide respect and esteem for that

reason.

A final category of benefits is that this

rulemaking may encourage innovation in

environmental safe technologies.

In terms of the costs, I would like not to

focus on the increased spending associated with a

higher price of MDIs but, instead, focus on a

related question of whether or not the increased

prices may deter appropriate usage. I think that

is the appropriate issue for this panel and that is

the one that I am going to devote the rest of my

time to.

Also, by way of background in economics, a

65

key notion is what are we comparing the world to

when we do our analysis. We need to describe what

is the baseline relative to which we are assessing

the effects of delisting. The baseline in this

instance is the continued availability of generic

CFC albuterol. So the analysis that we are

conducting is relative to a world in which the CFC

albuterols continue to be available and, therefore,

the generic CFCs also continue to be available.

What I am going to focus on is a

relatively standard and conventional economist

approach to estimating the response to higher

prices. It really focuses, in particular, on the

estimated quantity of metered-dose inhalers that

may not be consumed as a result of the increased

price. It interprets this as the

product, really, of three things. One is the price

increase in percentage terms. The other one is a

measure of the consumer sensitivity to the price

increase, a measure the economists typically

describe using the word \"elasticity,\" and, lastly,

the MDIs sold in the baseline to price-sensitive

66

consumers. So these are three parameters that I

will draw your attention to.

With respect to the price increase, the

prices are, of course, variable in a particular

way. The vary with market conditions and they vary

also in response to the marketing decisions made by

the different companies marketing the products. As

a result, the assessments of the price are

difficult not only because of the data deficiencies

but also because, ideally, we need to be looking

forward to what the price difference might be

between a world where the albuterol CFCs are

delisting and a world where they would continue to

be available.

That forward-looking approach requires and

association of these prices that takes the

variability into account. For the purposes of our

analysis, that is too complicated and we are,

instead, going to take the current price

differences as a measure of the price increases

from the delisting. The merits of this approach

are simplicity, transparency and also consistency

67

with an announced policy of GSK that it would

freeze wholesale prices through December, 2007.

Where does one go for information on

prices? In the modern day, Google comes to mind as

a source of all information. If you go to Google

and look for prices, you come to drugstore.com. It

listed generic MDIs with albuterol on the 24th of

March for \$14. HFA at drugstore.com sold a

Proventil. The Proventil HFA was sold at \$39.61

and Ventolin HFA sold at \$38.99. Those prices I

have checked twice and they were relatively

unchanged in the recent period.

That gives an increase of about 180

percent just comparing the generics to the HFA.

But these web-based prices are really

unrepresentative. They neglect the

brick-and-mortar outlets. They neglect shipping

costs. Ideally, what one would want are average

retail market prices for the cash-paying customers

who would be sensitive to price increases.

We have not acquired these idea data for

the analysis that we have conducted for this

68

proposal. So, instead, I am going to talk to you

about data we have acquired which are the best

available proxies at this moment.

The Medical Expenditure Panel Survey of

the Agency for Healthcare Research and Quality

provides some information on prices. This survey

assesses expenditures by the noninstitutionalized

people age less than 65 in the non-Medicare

population. It provides information on the average

retail prices among all payer types, the insured

and the uninsured alike, for CFC albuterol inhaler

prescriptions 2000 to 2001.

The information is that the generics are a

little bit less than \$25. I also report here the

standard error. The brand is \$39. You have heard

Professor Sullivan mention that the branded price

of the CFC tends to be close to the branded price

of the HFA. In this instance, the data on the HFA

prices are too rare to report.

We also looked using the MEPS survey at a

sensitive population that lacks insurance or has

only private non-group insurance which, in the

69

judgment of experts at ARC would typically exclude

coverage for drugs. We looked among this group at

people with incomes less than 400 percent of the

federal poverty level. This was a convenient

cutoff, given the data constraints of MEPS.

Within this group, the estimated average

retail prices were \$22 for the generic inhalers

and, again, in this instance, the data on the

branded inhaler prices were too rare to be

reportable. This group had about 2.8 million

albuterol prescriptions annually.

A second source of data on prices that we

consulted is proprietary information from IMS

Health, their national prescription audit for the

first quarter of 2004. Note the distinction in

dates. The MEPS is 2000-2001 and this is 2004.

There is no more recent information on MEPS. For

the IMS price information, we have prices measured

using the average pharmacy\'s revenues from

uninsured customers, insured customer and Medicaid

beneficiaries alike. So this is basically across

all payer types.

70

This includes chain, independent,

food-store pharmacies. It excludes the Internet.

It excludes mail-order and long-term-care

pharmacies.

Information on prices from IMS suggests

that the median price for the generic albuterol

MDIs is \$19.70 and for the albuterol HFA MDIs, the

price is \$43.00, the price difference of about

\$23.00. This suggests an increase of about 120

percent.

It is important to view these data as

approximate for a variety of reasons. I have

acknowledged the proxies for the conceptually

correct measure. In addition, the HFA prices have

been changing. The MDI data suggests that there

has been an increase of about 18 percent over the

twelve months preceding the sample of the first

quarter in 2004. Again, these prices reflect the

full price for the insured and the uninsured alike.

The next part of the puzzle is to assess

the response to the increase in price that one

might expect among consumers. In general, there is

71

an extensive economics literature that reports

small effects of price increases on consumption.

It rarely distinguishes, however, among drugs.

There is a very recent article by Dana Goldman of

Rand in JAMA that surveys more than a half million

people in 52 health plans over four years.

interestingly, it reports responses to

increases in co-pay among different categories of

medicines. With respect to anti-asthmatics, as the

average co-pay for anti-asthmatics doubles, the

average number of days of treatment supplied fell

by more than 30 percent. The authors report that

albuterol was the most common anti-asthmatic

including albuterol sulfate.

They also assess the effects on public

health. Let me back up a moment. They also assess

for drugs with no OTC substitutes, the set that

presumably includes albuterol MDIs. The response

in utilization described as I just did in the

average number of days of treatment supplied is

0.15. So there is substantial uncertainty about

what would be the relevant number.

72

With respect to average co-pay for

anti-asthmatics as a group, the response is 0.3.

But, if one then looks at drugs with no OTC

substitutes which would also include albuterol, the

effect is 0.15.

The authors go on to talk about the effect

of these increases in co-pay on ER visits and on

hospital days for the class of drugs diabetes,

asthma and gastric-acid disorder together, ER

visits grew by 17 percent and hospital days by 10

percent when co-pays doubled. The authors

acknowledge that these results are \"not definitive\"

for reasons of data limitations.

As a result, we are unable to quantify any

effects on public health because of the nature of

the limitations to the data.

Let me offer a summary of what we know

about the response to a price increase. I have

mentioned that an analysis would have, really,

three parts. With respect to the MDIs sold to a

price-sensitive population, MEPS suggests that

there are 2.8 million MDI albuterol prescriptions

73

going to the uninsured patients with incomes of

less than 400 percent of the poverty line who are

not Medicare eligible and under age 65.

If one takes, instead, data from the

National Health Interview survey and combines that

with data on the distribution of MDIs as described

in the proposal, one ends up with a larger number

of MDIs that would be used by the price-sensitive

population.

With respect to the price increase, we

really have two estimates. One is 120 percent

increase. That is from the IMS National

Prescription Audit reflecting average prices for

all payer types including those that are insured.

We also have the 180 percent which reflects the

Internet information.

A key question pertaining to the analysis

is the estimated elasticity, or the nature of the

consumer response. JAMA, as I mentioned, reports

two numbers that may be plausible. I think the

0.15 is one that we focus on. That reflects their

estimate of the response to increases in co-pay for

74

drugs with no OTC substitutes. I think that is

also consistent with other economics literature.

The next question pertains to the

interpretation of these. The JAMA paper really

focuses on consumer response for insured patients

to higher co-pays. They report an average co-pay

of a little bit more than \$12. So that co-pay and

the increase are roughly the same order of

magnitude as the price and the price increase that

one would anticipate for uninsured patients.

So, if one applies that increase in price

implicit in both the IMS data and in the Internet

data and the consumer response implicit in the JAMA

paper to the MDIs sold in the price-sensitive

population, then it is reasonable to infer a

quantity response among the uninsured population in

the high hundreds of thousands. It is very

difficult to be more precise. This is a daunting

exercise with data that are imperfect, as we have

acknowledged. But the numbers that we have

presented in particular are 0.4 million to 1

million. These are clearly approximate.

75

Let me offer some empirical caveats. I

have neglected the response of insured patients to

any increases in co-pays. The JAMA paper measured

these and we know that the co-pays for branded

products are much higher than co-pays for generics.

But this delisting of albuterols would have no

direct effect on the co-pays. The co-pays may

change only in response to the changes of the

insurance companies. We, therefore, believe these

are too uncertain for us to quantify at this time.

Let me reiterate that the estimates of the

price-sensitive population of the price increase

and the consumer response, or the elasticity, are

all relatively uncertain.

There is another caveat with respect to

the interpretation of these estimates.

GlaxoSmithKline wrote to FDA on May 3 of 2004

stating that 2 million complementary samples of

Ventolin would be made available each year to

physicians who may choose to reserve these inhalers

for their lower-income patients.

We are unable to assess quantitatively

76

what this might do for any reductions in

utilization because of the uncertainty associated

with how they might actually be distributed in

physicians\' offices. The GSK letter also said that

it would freeze wholesale acquisition costs or

prices thereby suggesting that the eventual HFA

prices at the retail level would also be relatively

constant. As I have mentioned, that is an

assumption that we maintain.

The giveaway, in general, may

significantly offset the loss of canisters provided

it is well targeted to the most price-sensitive

patients.

Thank you for the opportunity to talk. I

would be happy to take questions.

DR. CHINCHILLI: Thank you, Dr. Lutter.

Are there any questions from the committee? Dr.

Schatz?

Questions from the Committee to the Speakers

DR. SCHATZ: My question is the

relationship between elasticity and

over-the-counter substitutes. I gather that, with

77

more over-the-counter substitutes, then elasticity

is theoretically increased?

DR. LUTTER: Yes.

DR. SCHATZ: Then I would submit that

there may be an over-the-counter substitute which

is Primotine so that I think that, in

consideration, one might have the higher elasticity

and that patients doing that might be not as well

served.

DR. LUTTER: Lacking your medical

expertise, I will leave the judgment and the

discussion about the substitutability of the OTC to

you. Let me simply say that the availability of

OTC substitutes would affect the response in that

way.

DR. SCHATZ: And it could make the higher

value that they found more relevant than the lower

value potentially.

DR. LUTTER: Yes.

DR. CHINCHILLI: Dr. Martinez?

DR. MARTINEZ: Certainly with the caveat

which we may discuss later, but Primotine is not

78

albuterol and, thus, a potential consequence that

has not been thought of is that individuals who

cannot afford albuterol anymore will start using

over-the-counter Primotine which is associated with

a completely different set of side effects which

need to be seriously considered.

DR. CHINCHILLI: Ms. Schell, you had a

question?

MS. SCHELL: Yes, thank you. I just have

a question about the shift of production of the CFC

to the United States from the Netherlands in 2005.

Do you project an increase in the CFC MDIs\' cost

with that shift of production coming to the U.S.?

DR. LUTTER: That is not something we have

taken into account in the analysis. We have no

information on which to assess that question.

MS. SCHELL: Thank you.

DR. CHINCHILLI: Do any of the FDA

representatives want to respond to that or the

previous question?

DR. MEYER: I think, as far as that

question\--I don\'t think we have data that could say

79

one way or the other. Not the least of the

considerations there is how much in the price does

the actual cost of CFCs play, and I don\'t think we

know that.

As far as the earlier question and point,

I think it is something we can certainly consider

as we consider all the input from today.

DR. CHINCHILLI: Dr. Swenson, you had a

question?

DR. SWENSON: Yes. Regarding that JAMA

article, did you pursue at all the cost

implications of this greater ER and hospitalization

rate that might arise from some of these shifts

that you have postulated?

DR. LUTTER: No, largely because of the

uncertainty in quantifying those increases. As I

mentioned, there were three categories of

therapeutic classes that they grouped together only

one of which was asthma. Albuterol is only one

treatment for asthma and, therefore, we thought

that inferring\--that the judgment of the

applicability of those estimates to this delisting

80

appeared to\--is that we have no basis to accept

those estimates to predict quantitative reductions,

quantifiable reductions, in the ER visits or days

in the hospital. So, therefore, we don\'t really

want to estimate either the cost of reductions or

increases associated with those either.

DR. CHINCHILLI: Dr. Moss?

DR. MOSS: I work at Grady Memorial

Hospital which serves an indigent-care patient

population. About 40 percent of the patients there

are self-pay which means they don\'t have insurance.

It is nice way of saying that. One of the big

problems in the hospital is the in-hospital

pharmacy costs. Do you have any information or is

there a way to figure out how the changing cost of

inhalers would affect operating at a hospital that

serves indigent-care patients or is there a way to

figure that out?

DR. LUTTER: There probably is a way to

figure it out. It is not something we have done.

DR. CHINCHILLI: Dr. Kercsmar?

DR. KERCSMAR: The transition to HFA

81

inhalers has been made in a number of other

developed and industrialized countries. Are there

any data that are comparable to that that has been

published in the JAMA article? You referenced that

might give other insight into the elasticity

problem, changes in morbidity, lack of prescription

refills or, because of the difference in economic

structure and drug reimbursement in these

countries, are there no data available? Are there

lessons to be learned from countries that have

already made the transition?

DR. LUTTER: It is a good question. We

thought of that. Other countries lack the

uninsured population that exists in the United

States and generally control prices. In

particular, the price discrepancy that I have

described here is unusual if not unique.

DR. CHINCHILLI: Any other questions by

the committee members for Dr. Lutter?

MR. MITCHELL: Just before the break there

is something I would like to say.

DR. CHINCHILLI: Yes; please go ahead.

82

MR. MITCHELL: This is addressed to the

people who are watching this procedure through the

webcast. The proposed rule that we have been

discussing is available on FDA\'s website if you go

to www.fda.gov. In the middle column, you should

see FDA advanced display. If you click on that,

you should be able to see another link which goes

to advanced publication display. Click on that and

you should see something about a special filing,

publishing, on June 16, 2004. That should get you

to the Notice of Proposed Rulemaking.

Thank you, Mr. Chairman.

DR. CHINCHILLI: Thank you, Dr. Mitchell.

Yes; Ms. Schell?

MS. SCHELL: I am not sure who to direct

this question to, but I have a question. Several

of you talked about what the ozone depletion does

in cataracts, skin cancer and that, but no one has

mentioned how it affects asthmatics of COPD

patients, the depletion of the ozone layer and how

that would increase, if we didn\'t do something now,

how the ozone depletion would affect asthmatics in

83

the future. Would we be causing more asthmatics to

have problems with their breathing?

Thank you.

DR. MEYER: I will try to answer that. I

think it is unclear to us that asthma or COPD

patients would be differentially affected in terms

of the environmental consequences of ozone

depletion. You were not asking this, but, for the

public, I think it is hard for them to understand

that ozone in the lower regions of the atmosphere

is bad for asthmatics, particularly, and probably

for COPD as well. But ozone in the stratosphere

probably has no bearing on the development of

asthma and COPD that we know of.

So we would assume that the consequences

to the asthmatic and COPD population would be the

same as to consequences to other populations. One

could perhaps try to parse that out more closely in

that it is potential that inhaled corticosteroids,

for instance, may somewhat increase the

predisposition to cataracts. Whether that would be

even more the case in the circumstances of a

84

thinned ozone layer, who knows. But, again, we

have no basis at this point to believe that there

would be a differential effect on those patients.

DR. CHINCHILLI: Any other questions from

committee members for our FDA representatives?

Yes?

DR. MEYER: I just wanted to make the

point\--I realize that the people sitting around

this table probably are fairly well versed in this

but, for the purposes of the public, I realize that

we didn\'t really sort of step back and make this

point. But albuterol has really become a prime

drug for both the treatment of asthma, in

particular, but also for COPD in a way that, even

when we began the advanced notice of proposed

making in \'96, I don\'t think we have fully

anticipated.

It is now clear that approximately 50

million or more canisters of albuterol are

necessary to treat patients with asthma and COPD in

the United States. It is, again, by far and away

the bronchodilator or short-acting reliever of

85

choice in patients with asthma and COPD.

Again, I think the people around the table

know this but, for the matter of the public record,

I just wanted to get on the table the kind of

numbers we are talking about. This is a very

important drug that is sold widely and is really

critical in the asthma armamentarium and very

important in the COPD armamentarium as well.

DR. CHINCHILLI: Thank you, Dr. Meyer.

Dr. Martinez?

DR. MARTINEZ: I have one question

regarding worldwide distribution of sales. What is

the situation in the underdeveloped world? Which

are the products that are sold there and what are

the projected consequences of this regulation in

that particular market?

DR. MEYER: From the FDA perspective, I

don\'t think we have a lot of information on that.

I also am involved in the Montreal Protocol on a

working group on aerosols, medical aerosols. I can

say that the United States actually exports

relatively few of its MDIs as opposed to the EU

86

where much of their production is exported.

So most of what we are talking about here

is for domestic consumption and will not really

have much bearing on the rest of the world. I

would parenthetically note that there is a lot of

attention paid in the Montreal Protocol about how

this phase-out in the developed world will affect

that in the developing world because it is a very

important issue.

Unfortunately, in much of the developing

world, the use of MDIs is not very common because

they are\--although they are cheap per dose, to

actually buy one requires you to buy a certain

number of doses as opposed to oral medications

which may be more expensive per dose but cheaper

where you can just buy a few.

So there is probably undertreatment in the

developing world in general and specifically there

is not a lot of use of MDIs relative to the

developed world.

DR. CHINCHILLI: Before we proceed with

other questions, I would like to welcome Dr. Reiss

87

to the committee. Would you turn on your

microphone and introduce yourself to everyone?

DR. REISS: Sure. I apologize for being

late this morning. I am Ted Reiss from Merck

Research Labs. I am the industry non-voting

representative on the committee.

DR. CHINCHILLI: Thank you. Any other

questions? Yes; Dr. Swenson?

DR. SWENSON: Dr. Meyer, a couple

questions. I didn\'t see anywhere in the data,

either in the background information, if you could

go back to the initial signing of the protocol. At

that point, how much CFC was being produced and

now, of that amount, what does the present use of

CFC in albuterol represent in a percentage term or

absolute amount?

DR. MEYER: I am sorry that I don\'t

actually have those particular figures available.

I can say that the use of CFCs for MDIs when the

protocol was signed was a relatively small

proportion of the CFC use because CFCs were then

used in refrigerators, auto air conditioners, home

88

air conditioners, foams and so on.

Now that the provisions of the Copenhagen

Amendments went into place, the use of CFCs for

MDIs in the developed world is the large majority

of these CFCs but it is still a small fraction

compared to what was the total in 1987.

Albuterol in both the United States and in

the rest of the world has been a prominent use of

CFCs. As I mentioned, for the United States, it

amounted to about half, or does amount to about

half, of our essential-use denomination. So I am

not giving you specific numbers, but I hope I am

sort of giving you a qualitative feel.

DR. SWENSON: Okay. The next question I

have then is, on Slide 24 or one of the similar

slides that you had in your talk, was the projected

return, or this idea of a projected return, of

normal stratospheric ozone levels by mid-century

based on the present use right now which includes

our use of CFCs or was that based on complete

elimination of CFCs?

DR. MEYER: Those projections, and just to

89

be clear, they are actually projecting the recovery

to early 1980s levels which was still not normal

but a recovery nonetheless, are based on the

successful conduct of the Montreal Protocol. So it

is based on the Montreal Protocol as currently

amended being successfully carried out into the

future.

DR. CHINCHILLI: Ms. Schell?

MS. SCHELL: I am sorry. I would like one

more question on the 50 million uses of Ventolin or

albuterol. Have you looked at the overuse of

albuterol and the underuse of the

anti-inflammatory? Is there any look at overuse?

As we know, asthmatics, a lot of the time, don\'t

have the proper education in the use of the

anti-inflammatory so they overuse their albuterol.

Are there any numbers reflecting that?

Thank you.

DR. MEYER: We do not have such numbers.

It is certainly something that we considered. As

Dr. Lutter said, there are a lot of things we would

wish to consider in an ideal analysis. One of the

90

complications of projecting a public-health

consequence of some drop in the number of albuterol

MDIs distributed or used relates to these

questions, relates to the possibility that when

beta-adrenergic bronchodilators are overused that

that might, itself, have detrimental effects.

But these things, although clearly we

think about them, are not something we can

reasonably quantitate. So we have not.

DR. CHINCHILLI: Any other questions from

the committee? If not, I want to thank the FDA for

enlightening us on these issues. We are scheduled

for a break at 10:00. We are about eight minutes

before that, so we will take the break early. But

I would like to reconvene at 10:10.

Thank you.

(Break.)

DR. CHINCHILLI: I do have one

announcement and that is if you have a cell phone

and it must be on, it would be preferable if you

put it on vibrating mode and then, if it does go

off, that you take your call outside the room.

91

Thank you.

Before we go on to the open public

hearing, the first session that we will have this

morning, I just want to make sure that the

committee members don\'t have any other questions

for the FDA representatives. Are there any other

questions from the committee? Any final comments

from the FDA?

If not, then we are going to move into the

open public hearing.

Open Public Hearing (Session 1)

DR. CHINCHILLI: One other announcement I

am supposed to make. Both the Food and Drug

Administration and the public believe in a

transparent process for information gathering and

decision making. To ensure such transparency at

the open public hearing session of the advisory

committee meeting, the FDA believes that it is

important to understand the context of an

individual\'s presentation.

For this reason, the FDA encourages you,

the open public hearing speaker, at the beginning

92

of your written or oral statement, to advise the

committee of any financial relationship that you

may have with any company or any group that is

likely to be impacted by the topic of this meeting.

For example, the financial information may

include a company\'s or a group\'s payment of your

travel, lodging or other expenses in connection

with your attendance at the meeting. Likewise, the

FDA encourages you, at the beginning of your

statement, to advise the committee if you do not

have any such financial relationships.

If you choose not to address this issue of

financial relationships at the beginning of your

statement, it will not preclude you from speaking.

So that is important for our open public

hearing speakers to recognize that and to make

acknowledgments. I probably will repeat this

statement when we start the afternoon session as

well.

We are ready for our first speaker during

the open public hearing. Please be sure to

introduce yourself and pay attention to the

93

statement I just made.

MS. WEXLER: Good morning. I am Pamela

Wexler. Since 1997, I have served as attorney and

advisor to the U.S. Stakeholders Group on MDI

transition. I have no financial interest in any of

the companies or participants today.

I would like to start by telling you a

little bit about the U.S. Stakeholders Group. It

is a consortium of nine leading patient and medical

professional organizations. Members of the

organizations include patients with asthma, chronic

obstructive pulmonary disease and other respiratory

diseases. Collectively, the member organizations

represent and reach 25 million Americans who suffer

from asthma and other respiratory diseases and they

include organizations that educate and advocate for

individual patients and their families through

local chapters.

Members of the Stakeholders Group also

include physicians, respiratory therapists and

other healthcare professionals who specialize in

respiratory care and they are recognized leaders

94

among the healthcare community. The stakeholders,

as a group, and its member organizations

individually collaborate with various other

interested organizations in the U.S. and around the

world.

In the eight years since the Stakeholders

Group has acted formally, neither its membership

nor its procedures have changed. The American Lung

Association convenes the U.S. Stakeholders Group.

The member organizations elect representatives to

the stakeholders process and these individuals

meet, in person, once or twice a year and

communicate regularly.

Oftentimes, the leadership of these

organizations attends stakeholder meetings and

participates in the deliberations. Other times,

the government and the private sector are invited

to attend as well and make presentations. Any

action taken under the name of the stakeholders is

approved by each member organization.

Now, I would like to turn to our petition.

Eighteen months ago, we petitioned FDA to consider

95

albuterol essentiality. The petition was not

precipitous. It, in fact, was requesting the

agency merely consider essentiality. It was FDA,

itself, in a rulemaking process that started in

1997 and lasted five years that set up these

essentiality criteria, the conditions under which

any drug substance would be delisted and no further

CFCs would be available.

The stakeholders petition asserted that

the criteria had been met or, with the case of

manufacturing capacity, that the criteria could be

met or that information could be ascertained and,

hence, it was time for FDA to consider removing the

essential-use designation.

Now, there are a number of reasons why the

stakeholders petitioned FDA. I will just take a

moment to touch on them. First and foremost is the

environmental imperative. I won\'t spend too much

time on this because I think that the importance of

repairing the ozone layer is well established, both

by the Montreal Protocol and the U.S. Clean Air Act

on which, by the way, the U.S. has been a leader

96

since the beginning on the international process.

FDA, in its July, 2002 Final Rule establishing the

essentiality criteria actually offered a very

concise and clear explanation of why every use of

CFCs must be eliminated, even seemingly small

amounts like those used in MDIs.

I won\'t spend too much time on the second

sub-bullet either because a physician from one of

our member organizations in the next session, later

this afternoon, will present more on the

opportunity to improve disease management. But let

me just say that, from its inception, the

stakeholders position on the potential of

transition has not changed and that is that we

understand the potential of a switch in medication

and we have worked, and we hope to continue to

work, to ensure that that experience provides an

opportunity to improve patient care.

On the third and the last, and probably

the most pressing, issue for patients and

physicians is the issue of CFC supply and how it

might affect the availability of medications. As I

97

am sure you will hear more about today, the future

of CFCs to make MDIs is uncertain and fundamentally

the stakeholders want FDA to sufficiently plan for

that and for CFC-free medications to be available

and widely accepted before CFC supply can have any

impact on product availability or price.

Since the petition was filed, in the

eighteen months since the stakeholders filed the

petition to consider albuterol essentiality, a lot

has changed and we have learned a lot more. As to

supply, anyone who follows this knows that, in the

past three to five years, there has been a lot of

new and often conflicting information about where

PhRMA-grade CFCs were going to come from after

December 31, 2005.

Remember, that is an issue simply for the

U.S. market because, for the most part, developed

countries will not need these chemicals after that

date. They are on pace to phase out the use of

CFCs in MDIs.

The stakeholders have never had full

information on the future of CFC supply. We heard

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originally, maybe two years ago, there were going

to be two plans, one in Europe and one here. They

we heard that that wasn\'t going to happen. Then

the issue of certification was raised, that plants

had to be certified, the CFCs produced had to be

certified, and that the production that would

replace the production that is going to be lost in

Europe would be a different kind of production and

that different specifications would be required.

We heard, now, recently, despite a letter

from Honeywell indicating its stated intent to

supply CFCs at a plant in Baton Rouge, Louisiana,

that we still had questions about certification as

that was not mentioned in the letter and we have

never heard anything further about FDA on what,

exactly, that requires.

So the stakeholders, themselves, have

limited information on which they could base a

conclusion that the CFC supply would be without

problems. Recently, a non-governmental

organization, NRDC, wrote the EPA suggesting that

it would be illegal to produce CFCs in Baton Rouge.

99

So, again, we are faced with not a lot of clear

information on how we will go forward.

As to the second sub-bullet, even if the

Baton Rouge plant is not a problem, we certainly

see an increase in pressure on the part of the

international community to limit future supply of

CFCs especially where there are alternatives as in

the case of albuterol. We heard recently that the

U.S. request that was recently put into the parties

was approved but with the strong suggestion that

the U.S. come back to the parties after this

rulemaking was complete since it wasn\'t clear that

those quantities would be needed.

So it is obvious that the parties are

signalling the intent to stop authorizing new CFC

production for MDIs, again, in the case of a drug

like albuterol where there are safe alternatives.

Also, since the petition was filed, we

have, in the FDA docket, an independent analysis

conducted by National Economic Research Associates,

NERA, that provided us a much better picture of the

albuterol market. I expect that we will hear more

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about the NERA analysis this afternoon, but it gave

us a very good picture of how the market is

supplied, how patients who rely on albuterol pay

for their drugs.

It estimates the price and what the market

might look like once HFA alternatives are

introduced. More importantly, NERA projects how

the increased costs might be distributed and

allocated among the different classes of patients,

managed care and other payers including Medicare

and Medicaid.

Now, you know, the stakeholders are

medical and patient advocates, medical

professionals and patient advocates. We are not

economists. So we aren\'t here to speak to the

specific numbers in the NEAR report but we do

believe that the general thrust of the report

comports with what we have always believed about

the albuterol market and our understanding of how

increases, not just in medications but in all sorts

of other medical procedures and services rise and

are absorbed in the healthcare system.

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Now, there is no mistake about the need to

ensure patient access to medication. In our

petition to FDA, we were clear that FDA needed to

take into account price and how it would affect

patients and their ability to obtain medication and

comply with their treatment regimens. But we think

that, between the manufacturers, the stakeholders

and FDA, collective, we can adequately protect the

potentially at-risk subgroups and we can do it in a

variety of ways.

On the part of the manufacturers, we have

one submission already in the docket from an HFA

manufacturer outlining what it intends to do. We

would hope that we would see similar commitments

from other manufacturers as we move forward about

increasing the number of samples and enhancing

patient-assistance programs.

On the part of the stakeholders, our

member organizations are committed to working with

the agency and the manufacturers to develop an

educational strategy for communicating the

availability of free and discounted albuterol. We

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can work with our member organizations and our

network to deploy these messages in advance of

transition to patients, to specialty, general

physicians and the rest of the healthcare

community.

As for FDA, we think that there also might

be mechanisms that the agency can consider to

protect, again, these potentially at-risk

populations. One thing we have discussed within

stakeholder meetings is for FDA to monitor the

patient compliance or access to HFA albuterol and

reserve the right to allow a certain number of CFC

MDIs to be sold in the case of a real emergency so,

if you will, a phase-down process that allows the

potential\--and that is the potential in both CFC

supply and manufacturing capacity to not be gone

before we are out of transition, so a phase-down

period that protects that at-risk population.

I think that if FDA acts in a relevant

timeframe, there would still be enough stockpile to

be able to incorporate such a mechanism.

Last, I would like to turn to the timing

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of transition. There has been a lot of talk about

when the right time is. Now, it is no secret that

the stakeholders have long supported December 31,

2005 as the effective date for removing CFC

albuterol from sale in the U.S. As early as 1996,

in fact, before we had ever heard the word \"TEFA\"

or \"WEERT,\" we embraced the idea of a target date.

We embraced the eventuality that these

chemicals as slated for elimination. We understood

that it was useful to have a target date so that

manufacturing capacity could be put into place.

That idea of an aim, a target, a goal, has proven

successful as is evidenced by the fact that the

rest of the world or the rest of the developed

countries also adopted that date and or on pace to

meet it.

We saw transition as an opportunity to

educate physicians and patients about the learning

that has been done, especially in the last decade,

regarding asthma treatment and management.

But, in 1996, we saw December 2005 as a

goal, not an imperative. Eight years later, we now

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know that WEERT will close. We know there are

additional uncertainties regarding the Baton Rouge

facility. We know that there are two alternatives

ready to go and a third on the way. Given that,

December 31, 2005 makes a lot of sense.

Again, I just want to go back to

mechanisms for actually proceeding through

transition. Ending at December 31 is sensible and

it is achievable and, most importantly, it is

near-term enough that any problems with HFA

production, any problems with patient access, any

problems with affordability, compliance, any

unforeseen consequences, can be discovered and

addressed before CFCs are unavailable and before

the capacity to produce additional CFC products is

gone.

Thanks very much.

DR. CHINCHILLI: Thank you very much.

We will move on now to our second speaker.

DR. JONES: Good morning. My name is

Elaine Jones and I am Vice President of U.S.

Regulatory Affairs at GlaxoSmithKline. On behalf

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of GlaxoSmithKline, I would like to thank the

advisory committee and the agency for opportunity

to present our commitment to the transition from

albuterol CFC-free metered-dose inhalers, or MDIs,

which are ozone-depleting to albuterol HFA MDIs,

which are non-ozone-depleting.

Principally, during this presentation, I

will address the two questions that have been posed

to us by the agency that relate to the FDA\'s

criteria for transition.

The first question concerns our

manufacturing capacity for Ventolin HFA and the

second, what GSK programs are, or will be put in

place to help ensure that patients are adequately

served during the transition from albuterol CFC to

albuterol HFA and thereafter.

To set the stage for discussion of the two

principle questions, I would like to review the

timing of Ventolin HFA development in relation to

implementation of the Montreal Protocol.

Development of Ventolin HFA started before the

Montreal Protocol was ratified and resulted in

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submission of a new drug application in 1998.

Filing of this NDA was the result of over ten years

of research and development including a technically

challenging reformulation effort under

comprehensive clinical program.

After gaining FDA approval, GSK launched

Ventolin HFA in 2002 and stopped the sale of

Ventolin CFC. Currently, GSK sells Ventolin HFA in

165 countries around the world which has resulted

in over 20 million patient years of experience.

Also, in 2002, FDA published its final rule

outlining the criteria for transition from CFC

MDIs, which was the culmination of a lengthy

process that took five years to complete.

Quoted on this slide is one of the

criteria for transition from the 2002 Final Rule.

FDA has asked us, as one of the manufacturers of

the replacement products for albuterol CFC MDIs to

address this criterion which relates to the issue

of adequate supply and production capacity.

Specifically, the question is, can GSK, in

conjunction with other manufacturers of the

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replacement albuterol product, manufacture

sufficient quantities to satisfy patient demand

after the CFC products are no longer available.

To help answer this question, here is a

graphical representation of GSK\'s manufacturing

capacity over time in relation to the overall

albuterol market. Other manufacturers can be

expected to contribute to the supply as well. At

present, patient need for albuterol MDIs is about

50 million per year, as shown by the yellow shading

in this graph. This demand has remained fairly

constant over the past five years and is expected

to remain constant into the future.

The blue shaded portions of the graph

represent two distinct components of GSK\'s ability

GSK\'s ability to contribute to meeting this demand

with CFC-free MDIs. The darker shaded blue area

reflects currently installed capacity and the

lighter shaded blue area reflects expansion

capacity. The sum total of both components is

about 30 million MDIs per year, or about 60 percent

of the expected market.

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Now, I would like to discuss in detail our

current capacity. GSK manufacturers Ventolin HFA

at a facility in Zebulon, North Carolina, which has

a long history of manufacturing MDIs including the

now discontinued Ventolin CFC. At this facility,

we already have installed the capacity to

manufacture 15 million Ventolin HFA MDIs. At

present, since transition has yet to take place, we

are utilizing only 2 percent of our installed

capacity.

Production of up to 5 million MDIs could

be achieved immediately and this could be

progressively increased to the full 15 million MDIs

within six to twelve months. To achieve this

capacity is a relatively straightforward process.

We would need to hire additional staff and

reconfigure existing space.

As illustrated on the graph I presented

earlier, GSK is prepared to increase production

capacity by an additional 15 to 18 million MDIs.

This would entail significant capital investigation

on the part of GSK, would take approximately twelve

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to eighteen months to complete and would require

the installation of additional manufacturing

equipment and securing of MDI components.

This could be undertaken simultaneously

with a previous increase in production. This

expansion, in addition to our current capacity,

would deliver a total of approximately 30 million

MDIs.

I would now like to address the second

question posed to us by the agency which concerns

another one of the criteria in the 2002 Final Rule

on Essential Use Determinations and is reflected on

this slide. The issue is whether a high-priced,

non-ODS, product is effectively unavailable to a

portion of the patient population because they

cannot afford to buy the product.

Payers, and the healthcare system overall,

may experience higher costs as the market

transitions to CFC-free albuterol. But the

relevant question under FDA\'s 2002 Final Rule is

how individual patients will be impacted by this

transition, specifically whether they will have

110

adequate access to CFC-free formulations of

albuterol.

The larger policy questions regarding a

balancing of societal cost against environmental

benefits have already been resolved by the Montreal

Protocol.

In order to assess the economic impacts of

an albuterol transition, GSK commissioned a study

by the National Economic Research Associates. The

analysis proceeded on the basis of data collected

from a variety of sources as shown on this slide.

Although the economic report examined impacts on

payers as well as patients, our focus today is on

the impact a transition will have on the access to

albuterol HFA MDIs for individual patients.

To understand the impact on patients, one

must appreciate that albuterol is dispensed to

patients in different settings including retail

pharmacies, hospital pharmacies, clinics and

federal healthcare facilities. As represented by

the large green slices of pie chart, 84 percent of

dispensing takes place at retail pharmacies. The

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remaining 16 percent takes place in other settings;

for example, a Veterans Administration Hospital

where financial impacts on patients, of changes in

drug prices, are likely to be quite limited.

The pie chart on the right reflects a

further breakdown of the retail-pharmacy segment.

Within the retail portion, 72 percent of MDIs are

covered by private drug insurance and 15 percent

are covered by Medicaid. About 13 percent of

albuterol MDIs dispensed by retail pharmacies go to

patients who pay cash. GSK recognizes that it is

within this group of patients that the greatest

concern exists regarding access to albuterol MDIs

after a transition.

As we consider the patients who pay cash

for their prescriptions, it is important for us to

emphasize our long-standing dedication to helping

those in need obtain access to our medicines. For

over two decades, GSK and its Heritage Companies

have been committed to helping patients without

public or private drug insurance to get the

medicines that they need. To this end, we have had

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in place various patient assistant programs.

I will now describe Bridges to Access, the

GSK program which is directed at patients of all

ages who require financial assistance. For those

who qualify, GSK offers its medicines, including

Ventolin HFA, at no cost or at a minimal

retail-pharmacy dispensing fee.

Individuals with annual incomes up to

\$25,000 or families at or below 250 percent of the

federal poverty level are eligible for Bridges to

Access. Patients who enroll can receive their

medication the same day that it is prescribed.

This program also includes a spend-down option that

allows patients to deduct medical bills from their

income for purposes of determining eligibility

requirements.

Patients are not required to be U.S.

citizens to qualify for Bridges to Access.

Patients who apply also receive assistance in

finding additional healthcare programs for which

they qualify such as Medicaid, AIDS drug-assistance

programs, state children\'s health insurance and

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state elderly drug-assistance programs.

In this visual illustration, we use the

federal poverty level as a baseline to compare the

income eligibility levels for Medicaid and Bridges

to Access. The yellow line represents the federal

poverty level income for households of different

sizes ranging from one to four members. The blue

lines represent the average income eligibility

ceiling for Medicaid which is 135 percent of the

federal poverty level.

Each orange bar represents the maximum

qualifying income under Bridges to Access for a

household of that size. This maximum qualifying

income level is \$25,000 for households with one

individual or 250 percent of the federal poverty

level for households with more than one individual.

I might add that certain patients who do

not meet Medicaid\'s eligibility requirements

despite meeting the income requirements could

potentially qualify for Bridges to Access. For

lower-income patients who do not have public or

private drug insurance, for whatever reason,

114

Bridges to Access is, thus, a valuable resource.

GSK\'s experience with Bridges to Access

for Ventolin HFA from June 2003 to May 2004

illustrates the program benefits for patients. We

have distributed nearly \$3 million worth of product

representing approximately 100,000 inhalers to

nearly 14,000 patients. During this period of

time, the total amount of Ventolin HFA distributed

was approximately 400,000 MDIs which means that one

out of four Ventolin HFA MDIs went to a Bridges to

Access patient.

GSK has generated awareness of this

program through various avenues including half a

million letters sent to advocates at the launch of

the program, training for healthcare providers and

partnerships with public agencies and professional

associations. In addition, we maintain a public

website with extensive information about our

program including application forms.

These activities represent some of the

significant efforts GSK has made to raise awareness

of the program and we look forward to continuing

115

our outreach efforts. We are committed to provide

Ventolin HFA to all eligible patients in the event

of an increased need at the time of transition. In

order to show more clearly the estimated financial

impact of a transition to CFC-free albuterol on

individuals, I would like to now illustrate how a

lower-income patient might fare in a transition

both with and without the benefit of Bridges to

Access.

Our hypothetical patient is an individual

who makes less than \$25,000 a year and, thus,

qualifies for Bridges to Access and who also uses

four albuterol inhalers. To make this calculation,

we compared the current average wholesale price of

Ventolin HFA to the mean of the average wholesale

prices for the three top selling generic albuterol

inhalers.

Average wholesale price, or AWP, is

commonly used as a pricing reference point for

distributors and payers in the healthcare system

and is calculated and reported by commercial data

vendors. GSK does not set an AWP for its products

116

or sell its products according to AWP and we

recognize published AWPs are different from actual

prices paid in the marketplace.

Based on the AWP comparison, the current

difference in price between Ventolin HFA and

generic albuterol is \$9.49. Therefore, in our

example, if the patient did not enroll in Bridges

to Access, the extra cost per month would be \$3.16

or \$37.96 a year.

With assistance from Bridges to Access,

the cost of Ventolin HFA would be limited to a

one-time charge of \$10.00 for the patient\'s first

60-day retail pharmacy fill. The patient would

then experience no added cost for further

prescription. In fact, the medicine would be

entirely free from that time forward.

Keep in mind that this hypothetical

patient, if not enrolled in Bridges to Access prior

to the transition, would previously have been

paying out of pocket for that generic albuterol.

For seniors or disabled persons, in

addition to Bridges to Access, GSK offers the

117

saving programs, Orange Card and Together Rx to

help make GSK medicines more affordable. The GSK

Orange Card was the first of its kind. It is

available for Medicare beneficiaries without any

prescription-drug insurance and incomes of up to

\$30,000 for an individual and up to \$40,000 for a

married couple.

Orange Card offers savings on GSK products

including Ventolin HFA to eligible Medicare

beneficiaries of up to 40 percent depending on a

pharmacy\'s usual and customary price for the

medicine. The program, Together Rx, is a

multi-company savings program and, as such,

provides access to a larger number of medicines.

This program was modeled after the GSK Orange Card

and has similar eligibility criteria.

Although the arrival of a Medicare drug

benefit in January 2006 should substantially lessen

the need for assistance of this kind, GSK\'s

commitment to helping patients access our medicines

will remain.

In addition, GSK has committed to provide

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at least 2 million professional samples of Ventolin

HFA each year beginning a transition. Although

samples are distributed to physicians with no

conditions attached, we understand, anecdotally,

that many physicians do take medication-access

considerations into account in allocating samples

among their patients. Furthermore, GSK has

committed to freeze the price of Ventolin HFA from

November 5, 2003 until December 31, 2007.

In summary, GSK is committed to and has

global experience in transition to ozone-friendly

formulations. GSK has currently installed

production capacity to produce 15 million Ventolin

HFA MDIs per year. We are prepared to expand the

total capacity to approximately 30 million MDIs per

year.

GSK has demonstrated an abiding commitment

to helping patients gain access to our medicines

and, towards this end, has patient-assistance

programs in place to help ensure access to Ventolin

HFA at transition. Finally, GSK has committed to

provide professional samples and freeze the price

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of Ventolin HFA.

We expect that the criteria for

transition, as outlined in the 2002 Final Rule,

will be met with the support of all currently

approved albuterol HFA suppliers. Therefore, GSK

supports a transition date of December 31, 2005

which would allow for a smooth and orderly

transition for patients.

I would like to conclude by, once again,

thanking the advisory committee and the agency for

allowing GlaxoSmithKline the opportunity to present

today.

Thank you.

DR. CHINCHILLI: Thank you, Dr. Jones.

Let\'s have our third speaker for this

morning.

DR. GARUTTI: Members of the committee,

Food and Drug Administration, invited guests,

ladies and gentlemen, good morning. My name is Dr.

Ron Garutti. I am a pediatrician and I am Group

Vice President of Global Regulatory Affairs at

Schering-Plough Research Institute.

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On behalf of Schering-Plough Corporation,

I want to thank the FDA for the opportunity to

address the advisory committee today.

Let me say, at the outset, that our

company firmly supports the principles of the

January 29, 2003 petition of the U.S. Stakeholders,

which you have heard about, which requests an end

to the exemption for albuterol CFC-based in

inhalers. As pointed out, this exemption, after

all, was never intended to be permanent.

Now, I will not devote any of my

discussion today to the rationale for removing CFCs

from albuterol inhalers as I believe that that

rationale is well understood and accepted by most

interested parties as the right and necessary thing

to do.

In so removing CFCs, the United States

would be accomplishing the transition to a non-CFC

environment that has already successfully been

implemented by most of the European Union, Canada,

Australia, Japan and other countries.

So the important question, then, today,

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for the committee is not if the transition should

be done but when. It can be done as soon as FDA,

in conjunction with the healthcare community and

the industry, is prepared to initiate the

transition.

It has been pointed out that in July,

2002, the FDA issued a final rule which set forth

the conditions that would have to be met before an

essential-use designation for albuterol inhalers

could be removed. Both Drs. Meyer and Sullivan

have noted them. Schering believes that all of the

necessary elements to remove the essential-use

designation can be met as early as December 31,

2005\.

We acknowledge the proposed rule

distributed today and we are pleased to learn that

FDA plans to publish this on June 16. We are

hopeful that today\'s discussion will lead to the

establishment of a firm date.

As a company with more than twenty years

of respiratory experience and the first with our

partner 3M to introduce an HFA inhaler to the

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United States, Schering understands that we, in

conjunction with all of you and other members of

the professional asthma community, will be asking

millions of patients to change their behavior.

We recognize the significance of this

transition to patients and providers alike and we

are sensitive to the fact that ongoing

communication efforts will be essential elements to

ensuring that the transition is smooth and

successful.

To accomplish this effectively, however,

it is critical that FDA establish a clear timeline

to end the exemption because we believe that only

in doing so will there be the necessary stimulus to

drive the kind of provider and patient-behavior

change that will be required. Schering\'s

contribution, as well as that of others, to

effecting a successful transition hinges on

implementing the various elements of the transition

at the right time in relation to the effective

date.

In the absence of such a date, it will be

123

difficult to manage these various aspects

efficiently. For example, patients may not be

receptive to targeted communication efforts until a

fixed date has been established. It has been

pointed out, in addition, that significant planning

decisions and resource commitments required to

increase current production capacity need to be

made and, for us, we need about eighteen months in

advance of a known effective date.

That being said, Schering is poised to

play a part in a planned orderly transition and we

could be ready for an HFA-only environment as early

as the end of next year. We believe that for the

FDA to remove the exemption, certain assurances are

required. These are that safe and effective

alternatives are available, that patients and

providers are knowledgeable about and comfortable

with the use of the inhalers and that industry can

adequately meet the demand.

In the next few minutes, I will point out

that we do have safe and effective alternatives

right now and Schering will have educational

124

programs ready so that patients and providers will

be knowledgeable about and comfortable with their

HFA alternatives and that we can have an adequate

supply and production capacity of Proventil HFA

available again as early as December 31, 2005 or

within eighteen months of an established transition

date.

Now, regarding the safe and effective

alternatives, following the issuance of the

Montreal Protocol in 1987 and after years of

research and development, Schering was the first

company to market, in collaboration with our

partner 3M, a non-CFC inhaler in the United States

in 1997.

Industry researchers had created HFAs that

were more environmentally friendly than CFCs.

These HFAs were then extensively tested to ensure

that they possessed the desired characteristics of

an MDI propellent. A wide range of toxicology

studies, comparable in scope to that for a new

molecular entity and consisting of acute, chronic

reproductive genetic and carcinogenicity

125

evaluations, established that certain HFA molecules

were, in fact, suitable candidates to replace CFCs

in inhaled delivery systems.

The new technology was then applied to

Proventil and, after a comprehensive clinical

program established that Proventil HFA was both

safe and effective, the FDA approved the product

for marketing clearance in 1996. In addition to

the clinical studies that were included in the NDA,

3M also conducted a robust observational

postmarketing program which studied more than 6,000

patients.

In the nearly eight years of postmarketing

patient experience to date, more than 17 million

prescriptions for Proventil HFA have been written.

Spontaneously reported adverse events, as you have

heard, have been consistent with the product\'s

labeling and similar in nature to that of its CFC

counterpart.

Taken together, available data clearly

support the established safety profile of Proventil

HFA and so, yes, we do have safe and effective

126

non-CFC alternatives available right now and, in

fact, with Glaxo\'s HFA product, there are, as said,

two such products available.

Let\'s turn now to another assurance

required before removing the exemption, that

relating to education and communication. Schering

is committed to playing its part in communicating

important information around the transition to both

patients and providers. Including in that

important information is reiteration of the message

that HFA inhalers are as safe and effective as the

CFC inhalers to which most patients are accustomed.

The HFA inhalers are also similar in size and shape

and as convenient to use.

Now, we all recognize, especially those

who treat asthma patients, that there can be a

significant psychological and emotional component

to asthma and its treatment. Asthma patients come

to rely on their inhalers and expect a certain type

of experience in using them. They tend to

associate activity of the drug and subsequent

relief with the forceful sensation of the spray

127

from a CFC inhaler has on the back of the throat.

I would point out that, with an HFA

inhaler, however, there is a softer spray and less

sensation although, of course, the active drug is

still effectively delivered to the lung. This fact

must this communicated to patients to ensure the

appropriate use of the product. Patients will also

need to be comfortable with the fact the drug from

an HFA inhaler may taste and smell slightly

different than that from a CFC inhaler.

Schering has always had educational

programs in support of our respiratory-care

business and messages such as those I have just

noted will be included in our developing multipoint

communication and awareness programs intended to

facilitate a safe and orderly transition.

Educational information will be accessible

via many channels including informational websites,

written materials available in physician\'s offices

and through our professional sales representatives.

Schering has traditionally had strong collaborative

working relationships with relevant national

128

medical associations including both the American

Academy and the American College of Allergy, Asthma

and Immunology, the Academy of Family of

Physicians. We will continue to work with these

associations and others to develop appropriate

educational materials for patients and providers.

We especially appreciate the efforts of

organizations such as the allergy and asthma

network Mothers of Asthmatics in their own

commitments to educating and supporting the needs

of asthma patients.

Schering is also one of the founding

sponsors of the National Patient Safety Foundation

and has held a seat on its board of directors since

1997\. This group is dedicated to improving patient

safety through educational programs and initiatives

and Schering will continue to provide input and

leadership on issues related to safe medication

use.

As I stated in my introduction, the impact

of an expanded successful patient and provider

education campaign will be highly dependent on

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implementing the various elements at the right time

in relation to a proposed effective date. These

programs, to be maximally effective, will need to

be timed in coordination with the transition date

established by FDA so that the asthma community can

be optimally prepared.

On other point related to the transition,

it is, unfortunately, a fact and well known that

many asthma patients do not regularly visit their

healthcare provider. Schering believes, in

agreement with the U.S. Stakeholders, that the

transition will offer a good opportunity for

physicians and patients to increase their general

dialogue about asthma management.

A visit to the healthcare provider,

prompted by the switch to an HFA inhaler, will

allow for a reassessment of the patient\'s condition

and adjustment of treatment if deemed appropriate.

It will be especially useful for those patients who

may not have seen a physician for some time.

A third assurance required before removing

the exemption is that an adequate supply and

130

production capacity of the HFA alternative will

exist. FDA has stated, and you have heard several

times today, that over 50 million albuterol

canisters are sold or distributed in the U.S. each

year. Schering currently supplies approximately

30 million units annually.

Our manufacturing partner, 3M, stands

ready to expand production in its facilities to

manufacture this amount of Proventil HFA and

Schering and 3M both have confidence that the

necessary capacity can be in place to meet our

share of the expected demand.

While much of the preparatory work to

expand capacity is well underway, advanced planning

activities and significant resource commitments

necessary to formally initiate this process require

some assurance of the timing of the transition.

The overall lead time to execute these steps,

including scale-up to current market demand, is

approximately eighteen months, again, thus, making

a fixed transition date established by FDA critical

for us and our partner.

131

In conclusion, the time to set a

transition date is now. Schering is confident that

we can meet our share of the demand and ensure that

asthma patients who need Proventil HFA are

adequately served. The focus throughout the

transition from CFC to HFA inhalers must be on

education and communication efforts towards

patients and providers. Schering is committed to

playing its part in effecting a successful

transition and supports the removal of the CFC

exemption.

The first step requires that a proposed

final rule be published and a clear date

communicated so that all asthma stakeholders can

act together. Finally, Schering believes the U.S.

can join the group of countries who have already

undergone a successful removal of the exemption

because we do have safe and effective FDA

alternatives now. We will be educating patients

and providers and ensure their comfort level with

the transition and industry can adequately meet the

supply and demand.

132

Thank you.

DR. CHINCHILLI: Thank you, Dr. Garutti.

Do the committee members have any questions of our

three open presenters this morning? Dr. Schatz?

DR. SCHATZ: I guess a question for the

stakeholders. The presentation talked, actually,

about two aspects of concern. One was CFC

availability, itself, and then, obviously, the

detrimental aspects. But I was trying to get some

sense as to what the relative concerns were and if,

in fact, if CFC availability were assured, would

that change the thinking in terms of a time line?

MS. WEXLER: If CFC availability was\--

DR. SCHATZ: A fair amount has been

emphasized about the concern as to whether CFCs

will continue to be available in terms of the

production as a rationale for the December 2005

date. My question was to what extent that one

factor is important and if CFC availability were

assured, if the production were not an issue, would

that affect your thinking in terms of a transition

date?

133

MS. WEXLER: No. I think that they work

together to signal that these chemicals are being

eliminated. There is a reason that Honeywell has

been asked to shut the manufacturing plant in the

Netherlands and that is because the Dutch

government does not want CFCs produced on its soil.

It is a political statement about getting out of

these chemicals.

To answer your question specifically, if

Baton Rouge were able to produce, it is not clear

that the international community would continue to

authorize those quantities and that would put the

stakeholders in the position of suggesting that we

don\'t care about international commitments.

The U.S., the government, has made a

commitment to comply with the Montreal Protocol and

so producing in Baton Rouge is only part of the

equation. It is that gets us the potential to use

them. But the right to use them legally needs to

be granted by the parties to the protocol. So they

have to work together in order for us to be able to

go forward.

134

I think what, in some ways, you are asking

is would we support renouncing the protocol?

DR. SCHATZ: No. It is a matter of would

the date, would your date, change. I was trying to

get the sensitivity of your position to CFC

availability versus other considerations relative

to the date you suggest.

MS. WEXLER: Again, I think that they work

together. Given what we know about the timeline,

the U.S.\--forgive me; I want to make sure it is

clear. We ask to use CFCs, wherever we get them

from. Regardless of where they are produced, each

country must ask the international process sort of

at the beginning of the year. We just put in our

request and those requests are two years in

advance.

So the request that the U.S. recently

submitted was for 2006 quantities. That request

was not welcomed completely. It was suggested that

the U.S. might want to reconsider that nomination

in light of this rulemaking or the rule that is go

forward.

135

So even if supply weren\'t necessarily an

issue, I think that it would be foolish for us to

believe that the international community is going

to continue to provide authorization to use those

CFCs indefinitely. So we are talking about a

2005-2006 timeframe for getting out of this and not

worrying about either of those conditions, of CFC

supply or the international community not granting

authorizations.

I think that, as we have heard, the

process of transitioning, making sure that the

HFA-installed capacity is there, making sure we

don\'t do anything precipitous and have a problem

and then have no CFC production capability and the

stockpiles of the CFCs that are available sort of

suggest that we want to kind of look towards the

sooner rather than later so that we buy ourselves

some time.

In other words, I don\'t think the protocol

parties will look kindly at a nomination for 2007

or 2008 regardless of whether Baton Rouge actually

ends up coming on line in a legal way.

136

DR. CHINCHILLI: Thank you. Dr.

Atkinson?

DR. ATKINSON: I sort of get the

impression that one of the big concerns among the

committee members and the FDA also is the

possibility that a small percentage of asthma

patients might be unable to purchase the HFA units

that they need. GSK has a program, or described a

program, that was going to assist with that. I

wanted to ask Dr. Garutti if Schering had any such

program and if they were considering creating one

if they don\'t have one now.

DR. GARUTTI: Let me say this is a patient

group and a provider group that we care very deeply

about. We are committed to the respiratory

business. We have been in it a long time and we

are going to do whatever is necessary to serve our

patient population.

First and foremost there is to make sure

that there is Proventil HFA available when we do

transition to the HFA-only environment. Currently,

as I have pointed out, that will entail a

137

significant ramp-up and a significant expenditure

of cost to get there. And we are confident we will

get there.

In fact, Schering-Plough does have a

patient assistance program. It is called SP Cares.

We have had it since, I believe, the mid-1990s. It

has similar eligibility requirements to those of

Glaxo\'s program, not entirely the same but similar.

Last year along we provided free drug of our

primary-care products including Proventil HFA to

some 75,000 low-income uninsured patients.

Periodically, we review the elements of

this program and criteria and we are committed to

continuing this program.

DR. CHINCHILLI: Thank you. Dr. Moss; you

had a question?

DR. MOSS: I was going to ask something

along the same lines. Maybe the people from GSK

and Schering can talk about how they are going to

market those programs for the uninsured, if they

have any plans for how to make physicians aware of

these programs.

138

MS. WEXLER: I wanted to point out that,

in anticipation of this move, the stakeholders, on

our website which is at inhalertransition.org, has

listed all of the patient-assistance programs and

has link to them so that our member organizations

can now start to disseminate that information. So

we also will work with the companies to promote

these.

DR. JONES: Yes. Bridges to Access,

actually, at the moment, has 435,000 patients in

its program. We have done a lot and will endeavor

to meet and strive towards this end. We have put a

lot of programs in place in order to be able to

reach as many people as possible and we will

continue to have these outreach efforts in place to

allow physicians and their associates to actually

be aware of these programs.

But, as I say, we have 435,000 at the

moment in the Bridges to Access program.

DR. CHINCHILLI: Thank you. Dr. Garutti?

DR. GARUTTI: I am not sure there is much

more we can add. As we have indicated, we are

139

developing many aspects of our communication

program. This is one element of them, the

awareness of the SP Cares program and we are going

to be working with various organizations that we

mentioned to make sure that it is more widely

communicated now as we transfer to an HFA-only

environment.

DR. CHINCHILLI: Any other questions from

committee members? If not, we are going to break

for lunch. I\'m sorry; Dr. Meyer. I didn\'t see

you.

DR. MEYER: Sorry; not to delay lunch. I

did want to make a clarification on an issue that

was left open from Ms. Wexler\'s talk earlier about

how the CFC sources is handled by the FDA because I

think she left that as kind of an open question.

Without getting into the details of the

Baton Rouge situation, what I would say is that the

FDA does not approve a CFC source, per se. What we

have done is we set standards for the purity that

is acceptable for CFCs when used in metered-dose

inhalers. It is the expectation that the sponsor

140

of a product that uses those CFCs will provide us

evidence, both from the manufacturer as well as

their own testing, that the CFCs meet those

specifications and, if they do, then, in fact, they

can be used in that product.

DR. CHINCHILLI: Thank you for the

clarification. Let me make sure nobody else has

anything. Okay. We will break for lunch. We plan

to start promptly at 12:30 so please return to your

seats a few minutes before 12:30 so that we can

start at that time.

Thank you.

(Whereupon, at 11:22 a.m., the proceedings

were recessed to be resumed at 12:30 p.m.)

141

A F T E R N O O N P R O C E E D I N G S

(12:30 p.m.)

DR. CHINCHILLI: We are ready to resume

our afternoon session.

Open Public Hearing (Session 2)

We have a number of speakers for our open

public hearing this afternoon. But, before we get

started, I want to read the announcement again that

I read this morning for our speakers.

Both the Food and Drug Administration and

the public believe in a transparent process for

information gathering and decision making. To

ensure such transparency at the open public hearing

session of the advisory committee meeting, the FDA

believes that it is important to understand the

context of an individual\'s presentation.

For this reason, the FDA encourages you,

the open public hearing speaker, at the beginning

of your written or oral statement, to advise the

committee of any financial relationship that you

may have with any company or any group that is

likely to be impacted by the topic of this meeting.

142

For example, the financial information may

include a company\'s or a group\'s payment of your

travel, lodging or other expenses in connection

with your attendance at the meeting. Likewise, the

FDA encourages you, at the beginning of your

statement, to advise the committee if you do not

have any such financial relationships.

If you choose not to address this issue of

financial relationships at the beginning of your

statement, it will not preclude you from speaking.

Now, in addition to that, unlike this

morning, we are going to time the presentations

because we have a number of presentations and a

short amount of time. Ms. Jain is going to be

running a timer and, when the green light comes on,

that means you can start with your presentation.

The yellow light means that you have one minute

remaining and the red light means you are finished.

Now, we don\'t have a hookup here to pull

you, so we would appreciate if you comply with

this. Please try to finish when you see the red

light.

143

So we are ready for Speaker No. 4 for this

afternoon.

MR. JAMIESON: Good afternoon. My name is

Jim Jamieson and I am here today on behalf of IPAC,

the International Pharmaceutical Aerosol

Consortium. IPAC is an association of leading

manufacturers of MDIs for the treatment of asthma

and COPD. My remarks today are made on behalf of

AstraZeneca, Aventis, Boehringer-Ingelheim, Chiesi

Farmaceutici, GlaxoSmithKline and IVAX.

IPAC was created in response to the

mandates of the Montreal Protocol. Since its

inception over fifteen years ago, IPAC has sought a

smooth and efficient transition from CFC MDIs that

balances public health and environmental

protection. IPAC is firmly committed to the

transition from CFC MDIs as evidenced by the

extraordinary investments and efforts that its

members have undertaken over more than a decade.

I have been personally involved in this

process for twelve years and have served as IPAC\'s

principal point of contact with the FDA, EPA, the

144

State Department and other U.S. Government agencies

on issues related to the MDI transition. I

appeared before this committee five years ago

during consideration of the FDA\'s rule establishing

the criteria for determining an MDI to be

nonessential.

IPAC\'s position on the FDA\'s albuterol

rulemaking may be summarized as follows. First,

IPAC fully supports FDA\'s Final Rule on the MDI

transition issued on July 24, 2002. This rule

adopts a moiety by moiety approach to the

transition and establishes the four criteria for

determining the nonessentiality of CFC MDIs. Once

these criteria are met, FDA must undertake the

requisite rulemaking process to promptly remove

nonessential MDIs from the marketplace.

Second, IPAC fully supports the

Stakeholders\' petition and has urged FDA to issue a

final rule declaring these products nonessential by

March, 2005 with an effective date no later than

December, 2005.

Let me explain why IPAC embraces these

145

positions. First, and most important and as you

have now heard, there are two safe and effective

CFC-free albuterol products on the U.S. market and

the criteria set forth in the July, 2002 Final Rule

either have been or can be met by December 2005.

This position has also been advanced, as you have

heard, by the Stakeholders Group.

Second, numerous other developed

countries\--Canada, Japan, Australia and at least

twelve European nations\--have already successfully

transitioned patients to CFC-free albuterol

products. There is no reason to believe that the

United States cannot do the same. While we are

focused today on a domestic rulemaking process, it

is critical to understand the overarching

international context. The United States\' ability

to secure CFC supply for MDIs is based upon

essential-use authorizations allocated by the

parties to the Montreal Protocol.

The international community has recognized

that the completion of the albuterol MDI transition

is crucial since these products represent at least

146

half of the CFC MDI market in the United States and

around the world. In light of the progress by many

other developed countries and the wide availability

of CFC-free albuterol products around the world, it

is unclear how much longer the international

community will be willing to approve CFC volumes

for use in single moiety albuterol products. This

uncertainty has significant implications for

patient care.

In response to the clear directive from

the United States and international community to

reformulate MDIs and to do it as soon as possible,

as soon as feasible, IPAC member companies and

other MDI companies began the difficult work of

developing CFC-free alternatives.

This effort was not simply a matter of

switching from one available aerosol propellent to

another. It was a lengthy, challenging process

requiring full R&D programs including extensive

clinical trials. This effort required substantial

investment from reformulating MDI companies well in

excess of \$1 billion and the work continues.

147

Almost fifteen years ago, MDI companies

and the United States government embarked on an

extraordinary and unprecedented partnership. The

goal of this partnership was and is to balance the

critical environmental interest of ozone protection

with the equally vital objective of ensuring

patient care, something that could not be achieved

absent a strong and durable collaboration.

Industry\'s core responsibility in this

partnership is to diligently research and develop

safe, effective CFC-free alternatives. For its

part, the United States undertook a parallel

responsibility to secure essential-use CFCs during

the development process and to ensure prompt

removal of nonessential CFC MDIs as soon as new and

reformulated products became available.

The pharmaceutical industry has acted in

good faith and made extraordinary investments to

develop ozone-friendly MDIs. It is now appropriate

for the United State to honor its commitments

toward the phase-out of ozone-depleting substances

by declaring CFC single-moiety albuterol MDIs

148

nonessential.

Finally, IPAC concurs with the

Stakeholders that, rather than presenting a

possible risk to patients, the phase-out of CFC

albuterol MDIs will actually bring benefits to

patients in terms of improved treatment regimens.

IPAC further believes that available

patient-assistance programs will promote access to

adequate treatment for potential vulnerable patient

subpopulations.

IPAC is pleased that the FDA has issued

the Notice of Proposed Rulemaking. Based on the

considerations that I have mentioned above, IPAC

urges FDA to grant the Stakeholders\' request and

issue a final rule removing nonessential

single-moiety albuterol CFC MDIs effective December

31, 2005.

In closing, IPAC is grateful for the

opportunity to present its views today. We stand

ready to serve as a resource throughout this

rulemaking process and future ones to progress the

transition to a timely and smooth conclusion

149

consistent with patient health.

Thank you.

DR. CHINCHILLI: Thank you, Dr. Jamieson.

Speaker No. 5?

MR. FLANZRAICH: Good afternoon. My name

is Neil Flanzraich and I am here today on behalf of

IVAX Corporation. I would like to thank the FDA

and the Pulmonary-Allergy Drugs Advisory Committee

for giving us the opportunity to comment on the

regulatory issues before the committee and to

register our support for the timely removal of

single-moiety albuterol MDIs from the list of

essential uses of ozone-depleting substances.

IVAX is a multinational company engaged in

the research, development, manufacture and

marketing of generic and branded pharmaceuticals

and veterinary products in the U.S. and

internationally. We are perhaps best known as one

of the world\'s leading generic companies. We were

the company that brought the first generic and

first inhaled generic, albuterol aerosol, and the

first extended-release generic, verapamil HCL ER

150

tablet, products to the U.S. market as well as many

other important generic products; for example,

paclitaxel injection.

IVAX also has a formidable commitment to

proprietary medicine with an extensive proprietary

pipeline that addresses important therapeutic

categories including oncology, central nervous

system, urological and endocrinologic disorders.

We also have a strong focus on developing

proprietary products for respiratory conditions.

Our position, as both a generic and

propriety company, gives us a clear and sympathetic

understanding of both sides of this issue. Indeed,

our experience with the issues facing this

committee goes much deeper. IVAX received a final

approval from the FDA for a CFC albuterol and

metered-dose inhaler, the generic equivalent of

Glaxo-Wellcome\'s CFC Ventolin, and was the first

company in the U.S. to market a generic albuterol

aerosol product.

Prior to the approval of this generic,

IVAX worked with the FDA for five years to

151

establish a sensitive pharmacodynamic

bioequivalence study which paved the way for the

approval of other generic albuterol inhalation

aerosol products in the U.S. market. This resulted

in significant extended use of albuterol inhalers.

IVAX\' entry into the market, as well as

the other companies that followed, significantly

decreased the cost of albuterol to U.S. consumers.

Importantly, this significant reduction in

albuterol\'s price was a result of competition in a

free-market economy. We sell, we continue to sell,

this generic CFC albuterol product in both the U.S.

and abroad and it has been and continues to be a

contributor to our companies revenues and profits.

From the time seventeen years ago that the

FDA and the EPA first encouraged U.S. companies to

develop CFC-free aerosol products, IVAX has been a

leader in developing and introducing

environmentally friendly CFC-free respiratory

products. In 1997, in France and Ireland, we

became the first company in the world to win

approval for, and to market, CFC-free

152

beclomethasone in a metered-dose inhaler.

Our CFC-free beclomethasone, QVAR, was the

first HFA corticosteroid for asthma on the U.S.

market. We have also developed another CFC-free

product, our patented dry-powder inhaler, Airmax,

which has recently been approved in several

countries in Europe and which is presently being

studied in a clinical trial in the U.S. with one of

our innovative proprietary compounds for the

treatment of asthma.

IVAX as also become a major supplier in

the U.S. and around the world of inhalation

solution products for nebulization which are also

CFC-free products. Most pertinent to the matters

concerning this committee, in January of 2003, we

submitted a new drug application for an HFA

formulation of albuterol in a metered-dose inhaler

and it received an approvable letter from the FDA

on this application on November 28, 2003.

In August, 2003, we submitted another new

drug application for an HFA formulation of

albuterol in our patented breath-activated

153

Easi-Breathe inhaler.

IVAX has, therefore, not only been a

participant but a pioneer and leader in both the

generic CFC albuterol and CFC-free branded

albuterol markets. Our company is committed to

supplying safe, affordable and environmentally

responsible products and we don\'t believe that

these goals are in conflict with each other.

As has been stated by the U.S.

Stakeholders Group on MDI transition in its

citizens petition, the impact of CFC emissions in

accelerating depletion of ozone in the earth\'s

stratosphere and, thus, increasing our exposure to

ultraviolet radiation is scientifically well

established.

Presently, CFC emissions from metered-dose

inhalers are the dominant dose of CFC emissions

produced by the United States. While the

significant impact of these emissions are better

addressed by the scientists and environmentalists

appearing before this committee, given the current

status of the weakened stratospheric ozone layer,

154

these CFC emissions remain a public-health concern.

We believe their continued use remains a breach of

faith with the international accords to which the

U.S. is a party and to the international community

that views these emissions as serious hazards.

Additionally, removing the albuterol CFC

products from the U.S. market will also strengthen

the hand of the governments and agencies seeking to

encourage other countries to discontinue activities

that release even greater volumes of CFCs into the

atmosphere.

In response to the U.S. laws and

international agreements calling for the phase-out

of ozone-depleting substances, the leadership of

other nations on this issue and the FDA\'s

instructing the pharmaceutical industry that the

Montreal Protocol and the Clean Air Act mandate an

eventual complete ban on the production of

ozone-depleting substances.

IVAX has invested many millions of dollars

over the past seventeen years to bring CFC-free

products to the U.S. and European markets. We

155

fully concur with GlaxoSmithKline\'s argument that,

having urged the MDI industry for over a decade to

reformulate their products to CFC-free

formulations, it would be manifestly inconsistent

for the U.S. government to punish the companies

that have invested so much and to reward other

companies which have made no effort to phaseout CFC

use by proposing an inappropriate delay in

albuterol nonessentiality.

As previously mentioned, we currently sell

QVAR, the only CFC-free aerosol corticosteroid for

asthma on U.S. market and have filed new drug

applications for an HFA formulation of albuterol in

a metered-dose inhaler in our patented

breath-activated Easi-Breathe inhaler.

The FDA is well aware of the status of

these NDAs and, hopefully, the products covered by

them will join GlaxoSmithKline\'s Ventolin HFA and

Schering-Plough\'s Proventil HFA on the market in

the near future. Both of our HFA albuterol

products will meet the FDA\'s final rule in regard

to same active moiety, same route of

156

administration, same indications, approximately the

same level of convenience of use as the CFC

albuterol products presently on the market.

IVAX would be willing to supply to FDA

with at least one-year postmarketing surveillance

data for our HFA formulation of albuterol that we

sell in Europe which is the equivalent to the HFA

formulation of albuterol that we have filed NDAs on

in the U.S.

Our HFA formulation in an MDI and in our

Easi-Breathe inhaler will be manufactured in our

FDA-approved plant in Waterford, Ireland. We

expect our capacity for HFA products to be 50 to 60

million units a year in the near term. Given what

we have heard this morning about GlaxoSmithKline\'s

and Schering-Plough\'s capacities for manufacturing

CFC-free albuterol units, the combined

manufacturing capability of these three companies

will be more than enough to satisfy the needs of

the U.S. market.

For IVAX, there is also an issue of

availability of CFC propellants. Whatever the

157

availability will be for U.S. manufacturers, it may

be even more problematic for IVAX. Since we

manufacture our products in Ireland, European

Community approval is needed to obtain supplies.

Since CFC availability is decreasing rapidly in

Europe, such approval may not be forthcoming.

The effect of an interruption of IVAX\'s

supply would be to decrease competition in the U.S.

and increase prices of the CFC products still on

the market. This is particularly likely since IVAX

is the major supplier of true generic CFC albuterol

MDIs in the U.S.

We believe that IVAX is well credentialed

to discuss the issue of pricing. We are one of the

world\'s leading generic companies and have

demonstrated during our entire seventeen-year

existence a commitment to provide affordable

medicine to the public.

We have also demonstrated this commitment

with our two main branded respiratory products in

the United States, both QVAR, our CFC-free

corticosteroid for asthma, and Nasarel, our

158

intranasal steroid for rhinitis, are the

lowest-cost medicines in their categories. QVAR,

our branded asthma medicine costs approximately 50

percent less and Nasarel approximately 20 percent

less than the average price of the other products

in its category.

We appreciate that there is a concern that

the prices of these new branded CFC-free albuterol

products will exceed those of the four CFC generic

albuterol products currently on the market one of

which is an IVAX product. We believe that the best

way to control the costs of these new branded

CFC-free albuterol products is the traditional

American way, through the dynamics of competition

in a free-market economy.

Presently, there are two competitors on

the market, Schering-Plough\'s Proventil HFA and

GlaxoSmithKline\'s Ventolin HFA. We expect that

IVAX will be joining them in the near future with

our two HFA albuterol products. These products are

not presently approved and we have not yet set our

pricing, but we reiterate that IVAX has an

159

historical commitment to providing the public with

affordable medicine.

We are also committed to pursuing a

substantial free sampling program as well as a

patient-assistance program. In due course, we will

provide the agency with additional information

concerning these proposed programs. The agency\'s

proposed rulemaking, which we have just received,

sees the future entry of generics as the way to

lower the current pricing of HFA albuterol. We

respectively suggest that the entry of generics is

still a long way off and that the agency has not

properly taken into account in this regard the

entry of IVAX\'s new HFA albuterol products that are

currently pending at the agency.

It was IVAX\'s entry as the third

competitor into the CFC albuterol market years ago

that dramatically impacted these prices. It is our

understanding that Sepracor may also have a

CFC-free short-acting beta-agonist molecule closely

related to albuterol on the market a well. The

competition from these products will create

160

downward pricing pressure and there could certainly

be additional CFC-free albuterol products, brand

and generic, entering the market in the future.

It has been alleged by an opponent of the

removal of CFC albuterol from the essential-use

list that the FDA\'s removal of CFC albuterol

products from the list would be inconsistent with

the stated priority of carrying out its mandate

under the Hatch-Waxman Amendments to promote

affordability of prescription drugs by increasing

the availability of generic drugs.

As a company deeply involved with the

Hatch-Waxman Act selling over 8 billion generic

tablets and capsules in the U.S. a year with a

clear understanding of both the letter and the

spirit of those amendments, we see no mandate to

sell affordable drugs that put the environment and

the public\'s health at risk.

There is no inconsistency in recognizing

and abiding by what has always been true, that in

the pyramid of healthcare values, \"Do no harm,\" has

always come first. The primacy of this principle

161

is universally accepted and, at present, twelve

European countries, as well as Canada, Australia

and Japan, have eliminated the use of CFCs in

albuterol MDIs.

Because we believe that the removal of CFC

albuterol products is important, because we believe

that the FDA\'s conditions and criteria for removing

CFC albuterol products from the essential-use list

have been met, because we believe that the enormous

investment we and other pharmaceutical companies

have made to reformulate our MDI products in

reliance on the urgings of the FDA was correct and

responsible corporate behavior that should not be

ignored nor published, because we believe that the

United States has pledged its support for removal

of these products to the citizens of the United

States and the international community through the

Clean Air Act and Montreal Protocol, and because we

believe that leading the CFC albuterol products on

the U.S. market for an extended period will have a

considerable, if difficult to calculate, cost on

the environment, on public health, on the U.S.

162

government\'s relationship with the international

community and on its future success with volunteer

collaborative pharmaceutical-industry action and

because we believe that the cost of HFA albuterol

products can be effectively dealt with by various

mechanisms including, among others, free sampling

and patient assistance programs and, of course,

IVAX\'s entry into this market, we respectfully

request that the FDA promptly issue a final rule

removing the albuterol MDI products from its list

of essential uses no later than December 31, 2005.

Thank you.

DR. CHINCHILLI: Thank you, Mr.

Franzraich.

Speaker No. 6.

DR. ROZEK: Good afternoon. I appreciate

the opportunity to appear before this committee

today. My name is Richard Rozek. I am an

economist and a Senior Vice President of National

Economic Research Associates, a firm that has been

providing research on business and public policy

issues for a variety of industries since 1961.

163

Personally, I have been involved in the

pharmaceutical industry for over twenty-five years

in various academic, government\--federal

government, I should say\--and private-sector

positions.

In 2003, GlaxoSmithKline, or GSK, asked

NERA to assess whether patients will be adequately

served if the FDA designates albuterol CFC MDIs

nonessential products. To address this issue, my

colleague, Emily Bishko, and I performed an

economic analysis of the cost impact on patients

and third-party payers in the first year after the

FDA would implement this policy change.

Our initial results, which were submitted

to the docket in response to the Citizens Petition,

as well as my comments today, represent the results

of our own independent research on these issues

related to the current and projected market

environments for selling albuterol.

Now, as we have heard this morning, the

FDA established criteria that it was considering

designation albuterol a nonessential. Given these

164

criteria, which I have summarized on this slide,

they really fall into two categories; the product

issues and then the patient issues, I think. We

focused on the economic factors surrounding whether

patients would be adequately served. Specifically,

our concern was whether patients will have access

to albuterol MDIs after the FDA policy change.

To begin our analysis, we examined public

data on the pharmaceutical industry generally and

albuterol specifically. My experience in the

pharmaceutical industry suggests that looking at

general industry trends does not constitute a

sufficient basis to analyze the effects of an FDA

policy change as that proposed here.

Detailed information on the specific uses

of albuterol in the U.S. is required. But two

important characteristics emerged from our review

of the data on the pharmaceutical industry in

general and on albuterol.

First, there is a complex vertical

structure in the pharmaceutical industry by which

products flow, generally, from manufacturers, both

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brand and generic, to patients. This is a

schematic to look at that structure and we have

noted the data in percentages is albuterol-specific

data. As we saw this morning, approximately 84

percent of the albuterol MDIs\--these are units as

opposed to dollars\--flows through the retail sector

to patients. The remaining 16 percent flows

through either clinics, universities or HMOs as a

group, non-federal hospitals or federal facilities.

The retail sector, obviously, is very important in

this regard.

Our second result has to do with the usage

of albuterol over time. We examined data from IMS

covering the period 1992 to 2002, which was the

last year for which we had data, although,

subsequent to our submitting our report, 2003 data

are available.

We noticed stability of the demand for

albuterol over time. Albuterol demand stayed

constant at approximately 50 million MDIs per year

and that was even in the face of increasing

population which is the red line at the top of the

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chart, and also in the face of generic entry which

occurred in approximately 1996. The first generic

sales for albuterol appeared in the data that we

looked at in January, 1996. So stable demand was

an important factor in our subsequent analysis of

these issues.

To facilitate our analysis, we made

several simplifying assumptions, as economists like

to do, in order to make the analysis tractable. We

assumed that there is a minimal, if any, market

response to the FDA policy change. What this meant

for our analysis is that we assumed no additional

samples, no manufacturer rebates to government

programs above those legally mandated, no market

entry beyond the two existing HFA MDI products and

no discounts to other payers above current levels

for the HFA MDI products. That is really a

manifestation of the last point which is that there

was no additional price competition for the HFD MDI

products than what had existed before or what

exists currently.

Under these assumptions, we looked at

167

several different perspectives. But I think, since

our concern was the patient, we will focus on that

first. Under these assumptions, we calculate the

increase in cost to patient per MDI for each of the

six channels of distribution that we noted on the

vertical flow chart earlier.

Specifically, patients obtaining albuterol

through the retail cash and the retail

private-insurance channels would experience an

increase, in our analysis, of \$8.61 per MDI in the

first year after the policy change and those people

going through the retail private-insurance channel

would pay an increase of \$10.57 per MDI,

respectively.

In the private-insurance channel, the

effect was due to the increase in copayment that a

patient would have to incur for a branded product

versus a generic products. We had data on average

copayments. Generic product through the

private-insurance channel has a copayment of \$10.00

and a branded product has an average copayment of

\$22.00. Shifting to only branded HFA products

168

available, we assume the patient would shift to the

higher copayment amount, hence the increase in that

channel.

Now, going a step above to a broader

perspective, looking at patients and third-party

payers, assuming, again, that the volume stays

constant at 50 million units, we estimate that the

first-year increase in the price of albuterol MDIs

for all payers, whether it be the patient or a

third-party payer, and in all forms of the product

prior to the policy change, there is HFA, CFC,

brand and generic, so that is included in our

pre-policy-change analysis.

The price would increase, in our

calculation, from \$18.38 prior to the policy change

per MDI to \$28.25 after the policy change. That is

the top line in this chart. That is a cost

increase, overall, of \$9.87 per MDI. The patient

incurs \$7.33 of that increase of \$9.87 and the

third-party payer incurs an increase of \$2.54.

That is not uniform across all third-party

payers but that is the average for all third-party

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payers here. If you remember the first charge,

that includes federal facilities, hospitals\--excuse

me; it includes the federal government as well as

private insurance and other programs.

Looking at these data as a daily increase

in cost, we see that it was a half a cent per

capita or 4.4 cents per asthma and COPD patient,

per diagnosed asthma and COPD patient. Looking at

it in the first-year impact collectively, this

translates to \$1.69 per capita or \$16.02 per

diagnosed asthma and COPD patient.

Based on the historical stable market

demand for this product, the use of albuterol as a

rescue medication and the relatively low market

price for a prescription of albuterol relative to

the average prescription product, in my view, the

cost increases to patients and payers that we

calculated are unlikely to have a material effect

on the future use of albuterol MDIs.

By comparison, even with branded product

only, we are talking about a prescription price of

about \$30.00. The average prescription price for a

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branded price in 2003 was over \$80.00, to put this

in perspective.

Now, that was our quantitative analysis.

We subsequently looked at other market factors.

These other market factors, both current and

expected, further ensure that no patient will have

to forego albuterol MDIs. These other market

factors we have heard about already,

patient-assistance programs, those are both public

and private. D.C. Healthcare Alliance is a public

patient-assistance program. Bridges to Access is a

private patient-assistance program.

There are patient discount programs such

as GSK Orange Card and Together Rx. There is

better information about these programs. We heard

about the Stakeholders website, the PhRMA, the

trade association for the research-based

pharmaceutical industry has a website. GSK has

promised 2 million additional samples in the first

year alone.

We have heard about additional competition

from IVAX, from Sepracor, from other 3M licensees.

171

3M is willing to license the HFA technology and

albuterol, itself, is not patent-protected. We now

have also heard today about Medicare drug coverage

beginning in 2006 to further benefit the elderly

patient.

Another factor that is very important in

the pharmaceutical industry is buyer power; that is

the ability of certain buyers to move market share

and to create competition among sellers. If you

recall the period between the mid-\'80s and the

mid-\'90s, Glaxo and Schering competed with only

branded albuterol in CFC form. These companies

competed vigorously against each other. Now, it is

up to the buyers to create that competition again

if it is only Schering and Glaxo competing.

So, for a variety of reasons, these

factors, together with our quantitative analysis,

lead me to conclude that patients will continue to

have access to albuterol after the FDA designates

albuterol CFC MDIs nonessential.

Thank you very much.

DR. CHINCHILLI: Thank you, Mr. Rozek.

172

It is time for Speaker No. 7.

MR. DONIGER: Thank you very much for the

opportunity to talk to this panel. I am David

Doniger. I represent the Natural Resources Defense

Council. We have more than a half a million

members across the country dedicated to protecting

public health and the earth\'s critical natural

systems.

I, personally, worked on protecting the

ozone layer, phasing out the ozone-depleting

chemicals and constructing and implementing the

Montreal Protocol and the Clean Air Act Provisions

for more than twenty years.

The Montreal Protocol is the most

successful international environmental agreement

ever. Developed countries are way along the way to

completing the phase-out of CFCs. Basically the

use in inhalers is the last significant use of CFCs

in this country. Developing countries are

beginning on their scheduled phase-out of

ozone-depleting chemicals, too. Many of them

actually have completed the phase-out as well.

173

We are here because some uses have been

deemed temporarily essential by the protocol

parties and have not yet been eliminated. But the

ozone layer continues to suffer from the remaining

emissions of these substances. In 2003, the hole

in the Antarctic ozone layer grew to near record

size so this program is not finished yet.

For close to a decade, the protocol

parties have been working to eliminate the

remaining uses as they become nonessential

including CFCs in albuterol MDIs. As you have

heard, other developed countries with economies and

patients similar to our own, including Australia,

Canada, Japan and many members of the European

Union have already completed the phase-out of these

products.

The United States has the single greatest

use of ozone-destroying CFCs still allowed. It is

our view that they are no longer truly essential,

unnecessarily harmful to the ozone layer and it is

now of the utmost importance to complete the MDI

CFC albuterol phaseout as quickly as possible.

174

Now, viewed individually, the amount of

CFCs in these products may not appear to be

significant compared to the general phase-out of

CFCs, but the emissions of ozone-depleting

substances from all sources, no matter how small,

must be viewed in a cumulative manner. The

emissions are cumulative and long lasting. The CFC

11 and 12 used in these products have atmospheric

lifetimes of 50 and 100 years respectively.

Emissions of ozone-depleting chemicals

anywhere in the world contribute to depletion of

the ozone layer above the United States. Thus, the

impact of FDA\'s decisions regarding the phase-out

of CFC albuterol MDIs will go far beyond just the

products used in the U.S. It will have a

significant impact both here and abroad in

protecting the ozone layer.

There is a ripple effect here. By

adhering to the letter and spirit of its

commitments under the protocol and eliminating

these CFC uses as soon as they become nonessential,

the United States sets an example for other

175

nations\--actually, I was going to say to follow,

but other nations are ahead of us in following.

But the opposite is also true. Where the

U.S. drags its feet on the removal of nonessential

CFC uses, it makes it easier for other countries to

delay their phase-outs of other chemicals, of other

uses, and we really do risk the possibility that

the repair of the ozone layer will not occur on

schedule if others, including our country, drag

their feet.

The health effects of ozone depletion are

serious. There are serious increases in

skin-cancer rates, cataracts, suppression of immune

systems and premature skin aging. The 2002

scientific association for ozone depletion

estimated that, absent the controls implemented

under the protocol, there would be nearly a half

billion excess cases of skin cancer by 2040,

worldwide. But we have to keep at this and

complete the phase-out if we are going to eliminate

the excess risk from depletion.

Somewhat ironically, ozone depletion, by

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CFC emissions from the MDIs may even contribute to

the very problem the MDIs are intended to treat.

Higher levels of U.V. radiation result from

depletion and those exacerbate there chemical

reactions that produce ground-level ozone smog.

Smog is one of the things which compounds the

problem of asthma and COPD impacting the very

patients who rely on the MDIs.

There is also a potential indirect effect

of an FDA delay to consider and that is that there

may not be new CFC production available after 2005

for this product. We know that the U.S.\'s primary

source of drug quality CFCs in the Netherlands will

be closed down under that government\'s regulations

at the end of 2005.

In response to this shutdown, Honeywell,

the producer in the Netherlands, has proposed

shifting CFC production to its plant in Baton

Rouge, Louisiana. However, producing CFCs that are

not currently produced at the Baton Rouge plant,

including CFC 11 required for CFC albuterol MDIs,

would violate U.S. law and the Montreal Protocol.

177

It should also be expected that the

protocol parties will not continue to grant the

U.S. essential use authorizations for CFC albuterol

MDIs, certainly not in the kinds of volume which

have been granted in the past. For the first time

since the inception of the essential-use exemption

more than a decade ago, the protocol\'s expert panel

that reviews essential-use nominations has

recommended only a conditional approval of the U.S.

nomination for 2006, in large part due to the fact

that 70 percent of the U.S. nomination was for CFC

albuterol MDIs that other countries have been able

to phase-out.

The way the Clean Air Act works, if the

parties to the protocol do not authorize the

production and consumption of CFCs for an essential

use, then EPA may not authorize such production or

consumption, and that includes import, for this use

domestically.

Honeywell has stated that it believes

that, by the end of 2005, the volume of

pharmaceutical-grade CFCs available from the

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Netherlands plan coupled with existing CFC

inventories may be enough to satisfy the U.S.

market until 2008, raising the question of why

anything would need to be produced after 2005 with

the closing of that plant anyway. We are pursuing

that point with EPA.

But it is true that this stock is a

limited, finite amount and, in our view, it is

better directed, if used at all, at other kinds of

MDIs, not albuterol MDIs, where the reformulation

may be proceeding more slowly. In other words,

every kilogram that is used in a nonessential

albuterol MDI is one less kilogram that could be

used in higher-value products for which the

substitutes are coming more slowly.

So, due to the impending closure of the

plant in the Netherlands and the likelihood that

the protocol parties will not continue to grant

these exemptions, there is a very real possibility

that CFCs will not be available for albuterol

inhalers as long as FDA appears to be assuming. I

think this is a key point. A policy based on a

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false assumption of continued CFC supply is

actually the one most dangerous for patients

because the false assumption is slowing the

transition to CFC-free products and, if CFCs become

unavailable sooner than FDA is supposing, patients

may be caught short.

The solution is to proceed swiftly with

the transition to CFC products declaring CFC MDIs

nonessential now, CFC albuterol MDIs nonessential

now, and relying on the safe and effective CFC-free

products to cover the needs of patients. This can

be done as early as 2006.

So, to conclude, completing the phase-out

of the CFC albuterol MDIs will have a significant

positive impact on the environment, on public

health generally, on the well-being of asthma and

COPD patients specifically and delay will have the

opposite effect.

For these reasons, the committee should

support a finding that the CFC albuterol MDIs are

no longer essential and should be removed from the

market, we think, as soon as January 1 of next

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year.

Now, one final note. In nearly a quarter

century that I have been engaged on working on this

issue, protecting the ozone layer, I have heard

over and over again from industries and certain

government agencies that it is infeasible to

phase-out various uses of ozone-depleting

substances and that taking timely action to protect

the ozone layer would destroy businesses, cause

economies to collapse and even cause elderly people

to die due to the lack of air conditioners.

Invariably, these dire predictions have

proved unfounded and dozens of uses of

ozone-depleting substances have been phased out

successfully. Based on this historic perspective,

and not intending to minimize at all the very real

health considerations for the patients at issue

here ,I am confident that the phase-out of CFC

albuterol MDIs can be completed this year or next

without adverse consequences.

Thank you for the opportunity to present

to you.

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DR. CHINCHILLI: Thank you, Mr. Doniger.

Speaker No. 8.

DR. RAU: Thank you for the opportunity to

provide comments to the committee. My name is

Joseph Rau. I am Chair of Cardiopulmonary Care

Sciences at Georgia State University in Atlanta and

I am speaking on behalf of the American Association

for Respiratory Care, the AARC. I want to say at

the outside I have no financial interest or

conflicts of interest with any of the products that

are being deliberated upon today.

The AARC is the national professional

association representing over 34,000 respiratory

therapists who provide care to patients with

asthma, emphysema and other chronic obstructive

pulmonary diseases. I have submitted a written

statement which offers more detail on the brief

comments that I would like to offer today.

The AARC support phasing out of the use of

chlorofluorocarbon or CFC propellants for

aerosolized inhaled medications and, in particular,

the removal of the essential-use designation for

182

CFC albuterol metered-dose inhalers.

In addition, the AARC, however, wants to

recommend monitoring the consequences of such a

change on cost and patient compliance. There is no

generic HFA albuterol and we have seen, with data

presented today, that there is some price

difference between the HFA formulations compared to

the currently available generic CFC formulations.

The AARC, in general, recommends an

approval process for new HFA formulation new drug

applications that is as efficient and expeditious

as possible to promote availability and competitive

pricing of replacement drugs for bronchodilators as

well as other drug classes. There is uncertainty

over pharmaceutical manufacturers production of

non-CFC MDI bronchodilators and other classes of

inhaled drugs.

The AARC believes that this uncertainty

can be reduced or, perhaps, even eliminated, if the

phase-out and replacement of CFC MDIs is driven by

a planned transparent timeframe agreed to by the

FDA and pharmaceutical manufacturers rather than

183

dictated by the unavailability of CFCs. In

particular, the AARC does support the proposed

December, 2005 timeframe for the phase-out of CFC

albuterol MDIs.

Thank you.

DR. CHINCHILLI: Thank you, Dr. Rau.

Speaker No. 9.

MS. FINDER: Hello. My name is Jodi

Finder. I am here as special counsel to the Asthma

Therapy Coalition. First, I would like to thank

the agency and this committee for the opportunity

to present ATC\'s views this afternoon.

What we are not debating here is that FDA

is an agency that is charged with protecting

America\'s health. FDA is, therefore, unequivocally

obligated to make decisions about a drug\'s

marketing status that are based on facts and

economic realities.

If this transition is inevitable and CFC

albuterol MDIs must lose their essential-use

designation, then this transition away from access

to affordable albuterol rescue inhalers cannot

184

ignore the dire medical needs of the population

that relies on them the most.

Asthma is on the rise in this country, one

of the most chronic and fastest-growing diseases in

America. There were 20 million asthmatics in 2002.

In that same year, there were more than 1.9 million

ER visits that were attributable to this chronic

condition. What is also not at issue here, in

addition to FDA\'s role, is that bronchodilators are

an integral part of asthma management.

There has been a disproportionate increase

of asthma prevalence in the poorest and most

cost-sensitive segments of society. I think we

know who we are talking about here; the uninsured,

the underinsured, the Medicaid recipients, the

urban population\--for example, inner-city

children\--the elderly patients who are on fixed

incomes, and minorities.

Another population that we don\'t talk

about very often that hasn\'t really been discussed

in this debate thus far is the rural population.

The West Virginia Education and Prevention Program

185

has done a study on this population that has shown

that the prevalence rate in rural West Virginia is

greater than the national rate and this number is

growing.

For your reference, I have included to the

committee an executive summary of that study.

A recent Journal of the American Medical

Association study that looked at chronic conditions

including asthma reveals that increasing copayments

can decrease prescription drug use up to 32 percent

and even more in some conditions. To give you a

sense of what the study included, it look at

diabetes, arthritis, asthma, depression and a few

other chronic conditions.

The medical and financial cost of a

premature ban on CFC albuterol metered-dose

inhalers would far exceed the environmental

benefit. We all know that generic CFC albuterol

MDIs retail for more than \$20 less than brand

alternatives. The agency and the committee don\'t

seem to be questioning this discrepancy.

The near-term removal of generic

186

alternatives would raise treatment costs, according

to conservative estimates, by \$500 million annually

totalling approximately upward to \$5 billion or

more until the time that HFA inhalers come

off-patent and generic alternatives may enter the

market.

In fact, FDA, though, has actually said,

in the rule that was issued, the proposed rule that

was issued yesterday, that this number really is a

conservative estimate. FDA is now saying that this

number of \$1 billion annually. Let me repeat that.

\$1 billion we are looking at as the increased cost

of taking these products off the market

prematurely.

In contrast to the cost here, the

near-term environmental impacts are negligible. It

will take fifty years for stratospheric chlorine

loading to reach adequate levels to improve the

environment. Even if all CFC albuterol MDIs were

eliminated this year, the environmental benefit

would be insignificant.

Let me explain this in a little greater

187

detail. This graph shows the cumulative ODS

production. What you see here is actually over

approximately a 50-year period. But if you look

over approximately a 70-year period, you will see

that ODS production totalled 23 million ODP tons

worldwide.

If you look towards 2002, you see an

extreme downward trend from the peak year in 1988.

The sum of all CFCs reported in 2002 equalled a

mere 3 percent of the total peak year from 1988, so

what you are seeing, that small bar at the end, is

3 percent of that large bar you are seeing that

represents the peak year of 1988.

Less than 1 percent of the 2002

ozone-depleting-substance production is

attributable to U.S. CFC albuterol inhaler

production. What that means is, you look at that

little bar, less than 1 percent of that small

bar\--this would be an imperceptible line on this

chart\--is attributable to CFC albuterol MDI

production in this country.

What this means is, if we look at having a

188

reasonable transition here, if a transition is

inevitable, and we are looking into the next

decade, that approximately eight to ten more years

of CFC albuterol MDI production in this market

would amount to less than 0.01 million ODP tons in

contrast to that 23 million you see represented on

this bar chart.

What does this mean? A moment ago, I said

that it would take 50 years for the environment to

reach a full recovery after taking ODS products off

the market. So, what we are talking about in

allowing this reasonable transition and in allowing

these cost-effective products to stay on the market

until generic alternatives can enter the market,

bring competition and keep prices down, we are

going to delay that 50 years that it already going

to take the environment to recover by a matter of

days, if that much. We are talking about days, 50

year plus days.

What is not in question here is that FDA

cannot undermine the Hatch-Waxman Amendments. The

Hatch-Waxman, we all know, has revolutionized the

189

normal life cycle of pharmaceuticals. The

pharmaceutical market has come to progress from

brand exclusivity, high dollars, towards generic

competition, meaning affordable drugs, not the

other way around.

Barring entry prematurely of generic

alternatives for nearly a decade would represent a

clear abrogation of FDA\'s clear mandate to promote

affordability by promoting competition.

So what the Asthma Therapy Coalition is

here to do today is ask the agency and the

committee to consider some very important questions

as it makes an ultimate decision here. First,

given the price sensitivity to prescription drug

use, what will be the ripple effect throughout the

healthcare system and is this acceptable?

We are looking at increased

hospitalizations, increased emergency-room visits,

increased morbidity, increased mortality rates.

Another question; which groups will be most likely

affected and how can we prevent this adverse

impact? How successful, really, will the current

190

proposed government and/or private-sector programs

be? What direct environmental and patient benefits

are gained by eliminating CFC albuterol MDIs before

generic alternatives may enter the market?

Shouldn\'t the billions of dollars we are talking

about here, that FDA is already talking about, be

spent in more impactful areas such as research and

development and prevention.

Again, thank you to the agency and to the

Pulmonary-Allergy Advisory Committee for this

opportunity to participate in the rulemaking

process today. The Asthma Therapy Coalition would

be happy to serve as a resource throughout this

rulemaking process.

DR. CHINCHILLI: Thank you very much.

Speaker No. 10.

DR. BERNHARDT: I am pleased to have the

opportunity today to address this meeting and offer

considerations for planning the U.S. program for

CFC propellants used in metered-dose inhalers, or

MDIs.

I am Dr. Steven Bernhardt, Global Director

191

of Regulatory Affairs for Honeywell Chemicals.

Honeywell is a \$23 billion diversified technology

and manufacturing leader. We employ over 100,000

people and serve customers worldwide with

components, engines and related products and

services for commercial airlines, business and

regional aircraft and spacecraft, automation and

control technologies for homes, buildings, industry

sites and airports, turbochargers for

transportation systems and chemicals, films,

advanced fibers and custom intermediates.

We are leading global producer and

marketer of fluorine-based products including both

CFCs and HFCs and, as such, are vitally interested

in the proceedings and recommendations of the FDA

regarding MDI propellants.

Honeywell is a supplier of propellants for

MDIs manufacturers. We are committed to meet the

needs of our customers and patients in this

critical life-saving application. We support to

orderly transition from the use of CFC propellants

to non-ozone-depleting propellants such as HFCs.

192

Honeywell has manufactured CFCs for MDI

propellent applications in the U.S. and in Europe.

In recognition of the expected gradual decrease in

demand for CFCs as propellent for products such as

albuterol, we are planning to rationalize our

global manufacturer to a single site located in

Louisiana.

Our plan is to continue manufacturer of

CFCs to meet patient demand for this choice of

product until such time as a transition to HFCs has

proceeded to the point that continued operation can

no longer be justified. Supply to meet market

needs can be from just-in-time CFC manufacturer as

well as judicious use of inventory of propellent as

preferred by our customers.

Our business plans call for us to be a

supplier of CFCs, HFCs or both. It is vital that

FDA and the Aerosol Technical Options Committee for

UNEP is aware that supply of both options will be

available and shortage of supply ought not to be a

consideration for your recommended national

transition plan.

193

We welcome working closely with both

organizations to provide you with the necessary

assurance that we will continue to be a partner who

you can rely on for the years to come to support

this elected phase-out schedule.

I, again, thank you for this opportunity

to communicate Honeywell\'s position on the supply

situation.

DR. CHINCHILLI: Thank you very much, Dr.

Bernhardt.

Speaker No. 11.

MS. SANDER: Good afternoon. I am Nancy

Sander. I am President and Founder of the Allergy

and Asthma Network Mothers of Asthmatics, a

nonprofit patient and family-education and advocacy

organization based right in the neighborhood,

actually, just a few miles away so all expenses

associated with this trip are donated by me.

On behalf of the AANMA Board of Directors

and more than 17 million Americans diagnosed with

asthma, I want to thank you for the opportunity to

be here and represent patient perspectives.

194

AANMA takes the position that the use of

chlorofluorocarbons as propellants in albuterol

metered-dose inhalers no longer meets the

requirements for essential use under the criteria

set for in the Code of Federal Regulations.

This is a poster that I see some of you

have picked up already but it is newly published by

our organization in cooperation with the American

College of Allergy Asthma and Immunology with the

MARC emergency-care physicians as well. This

poster was developed to help patients identify the

medications that they were on when they go to an

emergency room and they don\'t remember the names of

what they are taking.

But it also helps me with a presentation

today where, if you will notice that in your top

left-hand corner, you will see, across the top row

and then the two in the middle row, that we have

albuterol bronchodilators. Prior to the

introduction of generic albuterol in 1996,

albuterol sulfate was only sold as Ventolin and

Proventil. Today, patients use albuterol sulfate

195

sold in generic, Ventolin HFA and Proventil HFA

formulations.

So, with the phase-out, and I do mean

phase-out, of CFC-propelled albuterol MDIs,

albuterol does not disappear. So we are very

confident about its availability. Will this

represent a threat to patients who no longer have

access to generic or less-expensive MDI

bronchodilators? We think, actually, not,

especially after hearing the presentation by IVAX

and by GlaxoSmithKline and by Schering earlier

today. Because, also, the transition takes place

over time. Inhalers don\'t go away one day as a

result of a calendar-day change. So, because it

takes place over time, manufacturers, health

insurers, patients and their physicians have time

to plan accordingly.

As an organization, we have been helping

patients make this planning transition for a number

of years and also make them aware of various

patient-assistance programs that various companies

have.

196

Of the remaining short-acting inhaled

bronchodilators up here, that would be Alupent,

Maxair, Autohaler, Atrovent and Combivent. All of

them contain CFC propellent. According to everyone

today, they eventually go away as well. I think we

can learn a lot about how transitions happen by

paying close attention to what happens with

albuterol.

The new drug application submitted by

Sepracor for Xopenex and the discussions from IVAX

earlier today are encouraging as well because they

both utilize HFA propellants.

This brings me to one of my favorite

subjects and that is, while the pressurized

metered-dose inhaler is an absolutely elegant

economic and portable device. It is also very

complex and user-dependent. Even experienced users

even have difficulty using the MDIs even though

they have been taught numerous times.

The MDI is the only FDA-approved

medication delivery system where a patient cannot

reliably tell if they have medication left as they

197

continue to use it. There is no window. There is

no mark on the side that says, \"After this level,

you have no medication.\" There is no dose counter

or indicator. So there is no way to know when a

patient has reached 200 doses, if that is the fill

capacity. So it is not obvious at all when a

patient is running low or needs to get a

prescription refill.

The FDA and manufacturers say that shake,

float and spray-testing techniques commonly

employed by patients and their physicians when

trying to determine or guess the amount of

medication remaining inside of their MDI are

unreliable. Float testing, where the MDI is dunked

in water, may actually damage the device.

There was research that showed that

clearly 82 percent of patients use empty MDIs. So

when parents send children with asthma to school

each day, is the MDI full or empty and no one can

say for sure. That is why the organization

continues to encourage manufacturers to adopt FDA

guidance to industry and why we view that MDI

198

transition presents the best opportunity to

incorporate dose counting and dose-indicator

technology and into new devices and HFA devices.

Cost, access and education issues will

never go away but they can be improved,

particularly in the underserved population. We do

not support an essential-use exemption for CFC

albuterol. We do, however, support a united front

with the FDA and with manufacturers and health

insurers and other interested parties in making

sure that patients make very smooth transition

together.

Thank you very much.

DR. CHINCHILLI: Thank you, Ms. Sander.

Speaker No. 12.

DR. MARINELLI: Good afternoon. My name

is Dr. Anthony Marinelli. I am a member of the

American Thoracic Society Clinical Practice

Committee and I am here to present the views of the

American Thoracic Society, an organization of

15,000 pulmonary-physician and other

health-professional members. I have no financial

199

relationships to disclose.

It is the position of the American

Thoracic Society that the FDA should move forward

quickly to delist CFC albuterol from the

essential-use category and prepare the U.S.

marketplace for the elimination of CFC albuterol.

There are four key reasons why the ATS

supports delisting CFC albuterol from the

essential-use category. First, I think it is

important to keep in mind what is driving this

process, the hole in the ozone layer. The fact

that there is a hole in the ozone layer and that

the hole is caused by human activity\--namely, the

release of ozone-depleting substances\--is clearly

established.

The good news is that the steps taken so

far to reduce global use of ozone-depleting gases

has helped reduce the size of the hole in the ozone

layer. So, what the global community has been

doing so far is working. The bad news is that the

hole is still there and it will not fully repair

itself until further reductions in ozone-depleting

200

emissions are made. Delisting CFC albuterol is an

essential step for the U.S. to take in contributing

to the global effort to preserve the ozone layer.

Second, the market is ready for a

transition. There are two drug manufacturers who

have FDA approval to sell HFA albuterol in the

United States and there is a third manufacturer, as

we have heard today, expected to enter the market

in 2005. With three companies in the marketplace,

there is appropriate competition to keep drug

prices in check and appropriate manufacturing

capacity to ensure that the U.S. market will be

fully supplied with HFA albuterol. Delisting CFC

albuterol should cause no albuterol supply

disruption in the United States.

Third, the transition provides clinicians

a teachable moment to review and improve

asthma-care plans with their patients. I use the

National Asthma Education and Prevention Program

Guidelines for managing my patients with asthma and

I encourage patients to know and avoid their asthma

triggers, to use appropriate maintenance

201

medications to control asthma and to have

immediately available rescue medications for acute

exacerbations.

Despite my best efforts, I know many of my

patients rely too much on rescue medications,

underutilize their maintenance medications and

don\'t take the simple steps to reduce exposure to

their asthma triggers. The switch from CFC to HFA

albuterol gives me an opportunity to, again, teach

patients to know and avoid asthma triggers and to

review the proper role of the many medications

needed to manage their asthma.

I think our goal in the transition process

is use the switch as a teachable moment to review

and hopefully improve the care of patients with

asthma. Delisting CFC albuterol will provide

clinicians and patients alike an opportunity to

review and improve their asthma-care plan.

Fourth, clinicians have experience helping

patients get their medications. Several observers

have suggested that the United States should not

delist CFC albuterol from the essential-use

202

category because of the cost impact it will have on

patients who use generic CFC albuterol.

It is true the price of HFA albuterol will

be more than the generic CFC albuterol. So, if the

FDA does delist CFC albuterol, the prices for

albuterol will go up. Despite the cost proposed

and the increases that are inevitable in

medications and in virtually all aspects of

healthcare, I am still able to provide, and my

patients are still able to access, high-quality

care.

The cost increase of albuterol in

isolation from the rest of the healthcare sector

cannot be used as justification for slowing efforts

to reduce ozone-depleting gas emissions. The U.S.

healthcare system will adjust. Clinicians have

experience in assisting patients get the care that

they need. Physicians and their office staff walk

patients through the process of public and private

assistance programs.

We use drug samples. We come up with

alternative drug sources. We work with or around

203

insurers to ensure patients get the care they need.

For example, if I write a prescription for a 90-day

supply of medicine instead of a 30-day supply of

medicine, the yearly co-pay to that patient will go

down.

While there will be cost implications, the

delisting of CFC albuterol will not increase access

barriers to therapy for patients with asthma or

other lung-related diseases.

On behalf of the American Thoracic

Society, I appreciate the opportunity to present

our views. Thank you.

DR. CHINCHILLI: Thank you, Dr. Marinelli.

Speaker No. 13. I want to committee to

realize this is the last speaker.

DR. FINEGOLD: That is a great

introduction. Thank you.

DR. CHINCHILLI: I didn\'t want to detract.

I just wanted to get their attention.

DR. FINEGOLD: Well, thank you again for

allowing me to participate in this meeting. I am

Dr. Ira Finegold. I am an allergist and I practice

204

in New York City. I am also Chief of Allergy at

St. Luke\'s Roosevelt Hospital in New York. I run

the Allergy Clinic there and I am Director of the

R.A. Cook Institute of Allergy.

I take care of asthmatic patients who are

insured, pay out of pocket, and those who are

covered by assistance programs. I am also a Past

President of the American College of Allergy,

Asthma and Immunology. This is a professional

association of 4,000 allergists and immunologists

dedicated to improving the quality of patient care

through a research, advocacy and professional and

public education.

I am also the College\'s representative for

the last ten years to the U.S. Stakeholders Group

who you are all very familiar with. I have no

financial disclosures of significance.

We believe\--and that is the College\'s

position\--that eliminating CFC-containing MDIs are

important for the ozone-layer recovery, which you

have heard so much about, improving patient

outcomes. By that, we echo the previous speaker

205

regarding this as an opportunity to talk to

patients about asthma and decrease, actually, the

use of albuterol-containing rescue medication and

increase appropriate therapies such as inhaled

corticosteroids and, for allergic patients with

asthma, allergy immunotherapy and, for some

patients, anti-IgE therapy.

Also, we think outcomes do improve because

some of the newer HFA products are actually

superior devices and have less of the shortcomings

of some of the earlier CFC-containing metered-dose

inhalers. Also, we feel it is important to protect

our patients to ensure a supply of rescue

medication for them.

That leads to the whole question about the

CFC supply and, as I come away from what I knew

before and what I hear today, one thing I am

certain is that I am uncertain about the supply.

This becomes important to patients so that suddenly

CFC-containing medication doesn\'t disappear without

an orderly transition or that some of these other

products that so far are not making the transition

206

to an HFA product still relying on CFCs are still

available for patients such as Alupent, Maxair, and

these drugs.

We think that the phase-out date of

December 31, 2005 seems reasonable. From what we

hear today and what we knew before, we believe the

manufacturers can meet the demand and that, with

the two products already on the market, that this

is an acceptable alternative with the uncertainty

of the CFC supply that is another imperative with

it and, given the fact that sooner or later, CFCs

will disappear, we think we might as well keep

moving this process forward.

However, even though we are in agreement

with this process and have been since its

inception, we thoroughly recognize the cost of the

transition cannot be ignored and, to some extent,

it would seem that costs can be addressed by the

competitive market by a certainty that this will

occur with a given date so people will move things

forward, and communication, informing our patients

that rescue medication is not the whole treatment

207

for asthma and that we need to use controlling

medication.

In effect, what we want to see is patients

who use one or two canisters per year as opposed to

the patients who use one canister of a metered-dose

inhaler of a fast-acting agent once a month.

Thank you so much for allowing me to make

these comments.

DR. CHINCHILLI: Thank you, Dr. Finegold.

And thank you to all the speakers during the open

public hearing session.

Committee members, I would ask that you

indulge me a little bit. I would like to deviate

from the agenda as we have it here. We are

scheduled for a break at 2:30. I would suggest

that we see if there are any questions of the

speakers, if the committee members have any

questions because I think we will need some

uninterrupted time to have our discussion.

Before we do that, though, Ms. Jain has a

statement that she needs to read.

MS. JAIN: I have a statement from the

208

Joint Council of Allergy, Asthma and Immunology.

They submitted a written statement. However, they

were unable to send a representative. So I am

going to read that to you. Each of you have a copy

in your folders as well.

\"On behalf of the Joint Council of

Allergy, Asthma and Immunology, JCAAI, whose

mission is to act on behalf of the specialty of

allergy-immunology and the patients it serves, we

are writing to express our views on the pending

issue regarding the possible removal of the

essential-use designation of albuterol.

\"While we support the removal of CFC

products from the U.S. market, we are very

concerned about the adverse impact that removal of

CFC-propellent albuterol products from the current

market would have on some of our patients due to

cost issues.

\"Currently, CFC-propellent albuterol

products cost much less than the non-CFC albuterol

products. By our analysis, the CFC-containing

albuterol products cost, on average, about \$22

209

while, at the same time, the non-CFC albuterol

costs almost double at about \$44 per inhaler.

\"Removal of the CFC albuterol will double

the costs of treatment for our patients. The

consequences of such action will more than likely

mean that some patients will forego their

prescribed drug-treatment plan that will eventually

lead to increased overall health costs through

increased asthma attacks, increased emergency-room

visits and, perhaps, death.

\"According to a new study by the Agency

for Healthcare Research Quality, AHRQ, May 18,

2004, increases in copayments for prescription

drugs can lead to much costlier medical programs as

asthma patients and others forego drugs and see

their conditions worsen. This study found doubling

the out-of-pocket copayments patients are required

to pay resulted in a decline in the use of key

drugs used to control asthma.

\"We hope that these factors will be

considered as the committee deliberates over this

important issue.

210

\"Sincerely, Spenser Atwater, M.D.,

President, JCAAI.\"

Thank you.

DR. CHINCHILLI: So, committee members, do

any of you have questions of our speakers that we

have had, the ten speakers we have seen this

afternoon? Dr. Schatz?

DR. SCHATZ: I had a question for Mr.

Rozek. There has definitely been the concern

raised about cost but your analysis actually tried

to present some data on that. I wanted to make

sure I understand what you were saying that, given

your simplifying assumptions and assuming no

mitigating factors, you estimated 50 million

canisters would increase in cost by \$10 a

canister\--that is, the total cost to the healthcare

system, approximately, leading to an increased cost

during that first year of \$500 million.

I wanted to clarify if that is, in fact,

what your findings showed.

DR. ROZEK: Yes. We actually presented,

in our comments to the docket, that total number.

211

I think it was \$493 million, exactly. But that is

to the entire healthcare system and that was the

first-year impact.

DR. CHINCHILLI: Thank you. Committee

members, any other questions? Okay; I have that it

is 1:55. Let\'s take a fifteen-minute break.

Please be back at your seats by 2:10 and then we

will have our discussion for the committee members.

(Break.)

Committee Discussion

DR. CHINCHILLI: Committee members, you

have been asked to sit through lots of

presentations. You have absorbed lots of

information. Now it going to be your opportunity

to talk and discuss.

I would ask that you turn to the last page

that is attached to your agenda because that is

going to help us focus our discussion. So I will

give everybody a minute until they are with me.

MS. JAIN: It is attached to your agendas,

if you look on the last page of your agenda, after

the rosters.

212

DR. CHINCHILLI: The FDA has listed three

issues for discussion. We will take them in order.

The first one, and I will read it for everyone\'s

benefit, \"Please discuss the extent to which you

believe the criteria established in 21 CFR 2.125

for removal of a drug substance from the list of

essential uses for CFCs have been met for

albuterol.\"

There are the four bullets with the four

criteria, so let us discuss them. We will take

them one at a time. The first criterion is as

follows: \"At least two non-ozone-depleting

substances, non-ODS, that contain the same active

moiety are being marketed with the same route of

delivery for the same indication and with

approximately the same level of convenience of use

as the ozone-depleting products.\"

So, is there any discussion. Do any

committee members have any questions, comments,

points of discussion, that they want to make about

this particular criterion?

Dr. Moss.

213

DR. MOSS: I had a question for anybody

here from the open public hearing part of it. It

says at least two, but it was raised today that

there might be more than that. I think that would

be an important issue in terms of cost. So I was

wondering if anybody from the IVAX people or some

of the other companies here that can talk about

where the other new drugs, not the SmithKline or

Schering, are in terms of things and when they

expect them to come to market? Or not?

DR. CHINCHILLI: Please identify yourself

and your affiliation.

MR. FLANZRAICH: Hello. Once again, my

name is Neil Flanzraich. I am the Vice Chairman

and President of IVAX. Just to repeat, in terms

of, in addition to the two present products on the

market, IVAX has two NDAs currently pending at the

FDA. One is for an HFA formulation of albuterol in

a standard inhaler. The other is for an HFA

formulation of albuterol in our patented

breath-activated Easi-Breathe inhaler.

With respect to the standard inhaler,

214

which we filed in January of \'03, in November of

\'03, we had an approvable letter from the FDA and

we have responded to it. So it is in the hands of

the agency. We filed our application, our NDA, for

Easi-Breathe in August of \'03 and that is also

pending at the FDA.

So we hope, within some reasonable

timeframe, both those applications can be approved

and we will have two HFA albuterol products on the

market. We are also informed, just having heard

what was said publicly by another opportunity,

Sepracor, that they are also developing an HFA

formulation of a closely related molecule to

albuterol, another short-acting beta-agonist.

So, presumably, that product\--I think it

is called Xopenex\--in an MDI with an HFA

formulation will, at some point, be approaching the

market. I did make the point in my presentation

that one can wait for an indefinite period of time

for a generic to come. IVAX is one of the leading

generic companies in the world. We chose to

address this market and we thought it would

215

actually be a quicker route to the marketplace with

an NDA, a new drug application. But that does not

mean that we will not be responsive to the costs

and the issues in this marketplace.

We said, for example, that the current

asthma product that we have on the U.S. market, it

is an HFA formulation of a corticosteroid. It is a

maintenance medicine called QVAR. It is the only

CFC-free corticosteroid, aerosol corticosteroid, on

the U.S. market. We sell it at 50 percent of the

average prices of the other products on the market

in that category.

We certainly would expect to sell this at

a competitive price and something that would

benefit the marketplace. Really, IVAX has had a

long history. I think we have a proven record of

being committed to making medicine affordable. We

were the first generic of the very product we are

talking about removing from the market now, the CFC

albuterols. In that case, and in many others which

I could list, we like to think we have contributed

to reducing billions of dollars from the costs that

216

American consumers have to pay for medicine.

We will certainly bring that same

tradition and commitment to the HFA albuterol

marketplace

DR. CHINCHILLI: Thank you.

MR. McVICKER: Hi. My name is William

McVicker and I am from Sepracor. I just wanted to

confirm that our company has, indeed, submitted an

NDA for Leave Albuterol, an HFD MDI, within the

recent pass. The availability of that on the

market will obviously depend on the review to go

forward from here.

DR. CHINCHILLI: Thank you very much.

Committee members, before we start talking

more about the marketplace, that is actually going

to be related to one of the other bullet points.

Any further discussion or questions or comments

about the first criterion, that at least two

non-ozone-depleting substances, et cetera, have are

available. Comments? Questions? Yes; Dr. Schatz.

DR. SCHATZ: I think I would just make the

comment that no comments are probably interpreted

217

to mean that we believe that those criteria are

fulfilled. But I think maybe we better clarify

that.

DR. CHINCHILLI: Okay.

DR. SCHATZ: That we be my interpretation

of the \"no comments.\"

DR. CHINCHILLI: Since our committee

members are so shy, are there any committee members

who disagree with that statement? It doesn\'t

appear so. Now, we are not really voting; okay?

We are really just discussing and making

recommendations to the FDA. So, unlike other

advisory-committee meetings, we really are not

taking person-by-person votes today.

So it looks like we can move on from that

particular criterion. The second criterion was

that supplies and production capacity for the

non-ODS products exists or will exist at levels

sufficient to meet patient need. We heard this

morning and some this afternoon from different

pharmaceutical representatives that they can

ratchet up their production and think that they can

218

meet the need for non-ODS MDIs in the United

States.

Any comments, discussion, questions from

the committee members about this issue? Dr. Moss?

DR. MOSS: I will just reiterate what I

said before. It seems to me that it has been

well-explained that the companies could, within an

18-month period of time, increase their production

to fulfill the marketplace.

DR. CHINCHILLI: Dr. Atkinson, you had a

question?

DR. ATKINSON: Yes. I was just going to

add that if the FDA acts expeditiously to set a

deadline for judging CFC-containing albuterol MDIs

as nonessential, then that will presumably set in

motion the events that these companies need to ramp

up their production. So it is really kind of

dependent on what happens in the next several weeks

or months.

DR. CHINCHILLI: Dr. Schatz?

DR. SCHATZ: I think that does bring up

the question that I probably would like to hear

219

from the companies involved. In terms of the

timing of this, before we were led to believe that,

from the final rule, essentially, until

implementation, companies would need 12 to 18

months. I wonder whether that is still the concept

and is it closer to 18? I just sort of wanted to

be sure, I guess, I understood that timeframe.

DR. CHINCHILLI: Any comments from one of

the company representatives?

DR. GARUTTI: Ron Garutti,

Schering-Plough. We did say that if the date were

somehow magically to be announced tomorrow, we

could be ready as early as December 31, 2005. And

we believe that. For any date further out,

however, we think about an 18-month timeframe is

the appropriate lead time.

Now, the industry and Schering-Plough and

3M were kind of energized around this issue right

now to do it. The longer this goes on, other

decisions may have to be made. Other commitments

may fall into place. So we are saying eighteen

months now but who knows what the environment will

220

be if the date is not announced for another two,

three years?

DR. CHINCHILLI: Thank you. Comments from

any other company representatives?

MS. FLANZRAICH: Neil Flanzraich from

IVAX. I just wanted to say that IVAX will be ready

on December 31 of 2005 to supply\--as we said, we

have a capacity that will be 50 to 60 million units

and we will be ready at that time. So, whether you

tell us now or you tell us a year before or six

months before, we will be ready then.

DR. SCHATZ: Based on an approval of your

medication.

MR. FLANZRAICH: Currently, the products

are not approved but we would have the capacity if

the products are approved.

DR. JONES: Elaine Jones, Vice President

of Glaxo. It would take us six to twelve months to

ramp up to manufacture 15 billion MDIs. It would

take us approximately twelve to eighteen months to

ramp up to the total of 30 million MDIs. So,

within eighteen months, starting from now, we could

221

manufacture 30 million MDIs of the HFA formulation.

DR. MARTINEZ: May I add another question?

That would also be true if, at any time in the next

year, the decision is made. There is no other

alternative decision that the company needs to make

that could change that?

DR. JONES: That\'s correct. We only would

make the decision point\--it would take us, say, six

to twelve for the 15 and twelve to eighteen for the

30 million depending on, actually, when that

decision point was made.

DR. CHINCHILLI: Thank you. Yes; Dr.

Mitchell.

MR. MITCHELL: We have announced in the

Unified Agenda, which is a publicly available

document published in the Federal Register, that

currently we are planning to publish the final rule

sometime in March of next year. That takes into

account the 60-day comment period, the complexity

and sensitivity of the issue and the need to

consult with our sister agencies on these very

important issues.

222

DR. CHINCHILLI: Thank you. Any other

comments on this particular criterion? Are the

committee members satisfied with this? Okay.

Let\'s move on to the third criterion\--oh;

sorry.

DR. SCHATZ: I\'m sorry. I guess the only

thing I would say in response to that last comment

is that if, in fact, the final rule is published in

March and it calls for December of 2005, which is a

nine-month lead, then I am a little concerned from

what I have heard because that won\'t be the twelve

to eighteen months.

Now, I realize maybe something could start

now, but I guess I would question whether that\--is

that correct, that a final rule\--do the companies

think, or do other people believe, from what you

are hearing, that if a final rule is published in

March of 2005, that a December 2005 date is too

early to have adequate supply?

DR. CHINCHILLI: Does the FDA want to

respond to that?

DR. MEYER: I think that is something that

223

we would like to hear a discussion on. We have

heard the statements from the industry as to what

their lead time needs to be. As Mr. Mitchell had

pointed out, we are talking today about a situation

where we have just published a proposed rule. We

will not be to the final rule until next spring,

early-summer, range.

So December would be only then, perhaps,

six, seven, eight, nine months at most. We are

hearing from the companies that that may be faster

than they could fully ramp up to produce. I think

it is a difficulty at this point in time to know

where in the mix the IVAX product may or may not be

so that, obviously, the input from their company is

a legitimate observation, perhaps, but, as of

today, is speculation.

But I think it would be important,

perhaps, if the committee shares your concern to

hear a little bit of discussion about that issue.

DR. CHINCHILLI: Dr. Martinez?

DR. MARTINEZ: I think that, together with

that, an additional issue needs to be taken into

224

account which is that, if there is a rule and it

says that, say, December 2005, the rule will start

to take effect, producers of CFC products will tend

to decrease the amount of their product with time

and there could be even a period which is not the

period between twelve or eighteen but earlier

during which there will be less CFC products and

not enough HFA products.

I am concerned that, because of the issues

of the market, the FDA needs to take into account

issues like the one I have said so that patients

with asthma are not going to be left with this

product which is essential and life-saving.

DR. CHINCHILLI: Dr. Swenson.

DR. SWENSON: Just to the point of the

timing of this transition. It is not written in

stone that it has to be December, 2005. I think if

it were pushed back one year, that wouldn\'t, in any

large way, go against the spirit of this transition

simply to make for practical applications and the

ability to make the transition more smoothly. Am I

correct?

225

DR. MEYER: I guess with the one caveat

that we cannot necessarily predict what the

response of the parties to the Montreal Protocol

would be to, say, a December 31, 2006 timeframe.

Otherwise I would agree with your statement.

With regard to what Dr. Martinez just

said, I would state that the U.S. nomination for

2005, which included a substantial allotment of

CFCs for the production of albuterol, has been

approved by the parties. So we don\'t have any

expectation at this point that there will be a

shortage of CFCs for the production of albuterol

through 2005.

So I can\'t definitively say that there

wouldn\'t be some dropout in the market at this

point but we at least expect that, as long as it is

legal to sell these products, that the

manufacturers would do so.

DR. CHINCHILLI: Dr. Reiss?

DR. REISS: I would just like to know what

the factors are that lead to the March date why

that date is March and not at an earlier possible

226

timeframe given the concerns that Fernando raised.

MR. MITCHELL: This is obviously a very

sensitive issue. So it is something we would need

time to consider. We are looking at a 60-day

comment period. We need time to evaluate those

comments. In response to the Advance Notice of

Proposed Rulemaking which we published some years

ago to set up, start the regulatory process, to

allow us to use essential uses.

We received over 10,000 comments. We

don\'t expect anything on that order of magnitude,

but that is the thing that keeps me awake at night.

Then, in addition to that, to the inherent

sensitivity, this is an issue which we, under the

Clean Air Act, we have to consult with EPA because

it implements the Montreal Protocol. We consult

with the State Department. There is the Council in

Environmental Quality so it is a very complicated

rulemaking procedure and it does take time.

DR. MEYER: On the other hand, I did want

to point out that, under the Montreal Protocol, we

do have to\--they have called for us to have a final

227

rule by the Open-Ended Working Group in the summer

of 2005. That date has not been set yet but it is

generally in June or July, mid-July.

DR. CHINCHILLI: Dr. Atkinson?

DR. ATKINSON: If I recall correctly, the

Shareholders Group proposed a possible additional

amount of CFC-containing product to be sold during

2006, I suppose, as a supplement. If there was a

shortage, if there was a shortfall, how would

that\--if limited supplies in sort of quota fashion

could be available. Would that be possible from

the FDA\'s standpoint, I guess?

MR. MITCHELL: I mean, there are

difficulties with that. If this final rule goes

into place on the effective date, it will be

illegal to sell, for any manufacturer to sell, any

wholesaler to sell, any retailer to dispense, these

drugs.

There is always the possibility of

enforcement discretion by EPA but that is something

I really can\'t comment on and, also, one wonders

how many CFC MDIs would be produced when those

228

manufacturers are looking at an effective date. So

I am not sure how viable that sort of option is.

DR. CHINCHILLI: Yes; Dr. Martinez?

DR. MARTINEZ: I expressed my concern in

the face of these uncertainties that we are hearing

about. I am not an economist, but I am sure that

companies that are producing CFC products, in the

same way that they need time to ramp up, they need

time to ramp down.

I am not so sure that they can very

precisely calculate until December 31. Again, I

would need the help of an economist. How many of

these products are going to be sold and, if they

work for profit as they should, they are going to

be on the safe side than producing excessively that

they have to throw away if it is going to be

considered later a poison that cannot be used.

So, at this point, my concern is that

because needs to be done in a way that the

transition occurs so that nobody is left without

these products, which are life-saving, it would be

very important to have guarantees that the products

229

are going to be available and that that transition

is going to be dealt with in a way that the

patients are going to be covered.

DR. CHINCHILLI: Dr. Moss?

DR. MOSS: Can we have some of the

companies maybe talk about those issues. I know

GSK doesn\'t make the CFC ones but maybe Schering

can talk about how they were going to deal with the

transition phase to make sure that patients are not

without medications on December 25, Christmas Day.

DR. GARUTTI: Thank you. Ron Garutti,

Schering-Plough. So we are the largest supplier of

CFC albuterol inhalers. We are not going to walk

away from this patient population. As long as the

essential-use exemption remains in place, we will

supply this product to the patients and providers

who need them along with our HFA product. So you

can be assured about that.

DR. CHINCHILLI: Dr. Meyer, did you have a

comment?

DR. MEYER: I was just going to point out

that I very much appreciate Dr. Martinez\'s

230

concerns. I think we certainly share those. But,

to some degree, your concern is irrespective of the

actual date that we are talking about. Whether it

is tomorrow, whether it is ten years from now, that

concern remains. I think it will entail the FDA

working with the industry as well as the advocacy

groups to assure that there is good communication

and that the supply does remain adequate.

DR. MARTINEZ: Your point is very precise

and very good.

DR. CHINCHILLI: Dr. Schatz?

DR. SCHATZ: Dr. Meyer, you raised the

question as to whether, even if we or you decide

that 2006 would be the better date, the Montreal

Protocol decision makers may feel differently. It

talks about criteria laid out by the parties for

essential uses. Are those substantially different

than these four, because it would seem, if they are

not and we believe that the supplies won\'t be

adequate, then the fact that would come to a

different conclusion seems less likely. But maybe

if you could explain what differences there might

231

be.

DR. MEYER: Let me answer that to the best

degree I can. Up until the very recent past, and

I, perhaps, didn\'t spend enough time on this in my

slides, the Montreal Protocol very much deferred to

the individual party to make the determinations

within their own border, within their own use, what

was essential and what was not.

Unless it seemed on its fact to be

nonsensical or against the Montreal Protocol, those

were approved. Obviously, over time, there has

been a ratcheting up in terms of decisions, in

terms of how closely the individual uses are looked

at by the Protocol.

A lot of it now gets back to the decision

IV/25 that we showed a few times where it basically

says that if there are technically and economically

feasible alternatives available, then the use is no

longer essential. I think how that is interpreted

perhaps has changed a little bit with as well.

So I think, depending on how rigorous you

were in looking at what is a technically and

232

economically feasible alternative, you could say

that these are sufficiently stringent or not

sufficiently stringent. I think that it is just

hard to predict at this point because it has been a

little bit of a changing reality as far as how the

Montreal Protocol has regarded the nominations.

DR. CHINCHILLI: So, Dr. Meyer, if the

date were, say\--went beyond December 31 of 2005,

would the Montreal Protocol and the other

participating countries have no real say in what

happens in the United States but there could be

some political fallout from delaying it much beyond

December 31 of 2005.

DR. MEYER: Let me just be very clear.

The reason I sort of raised this caveat before

about the parties was just to make clear that we

are not in control of all the variables here, but

not to suggest, necessarily, that the parties would

definitely find it unacceptable to go beyond

December 31, 2005. I don\'t know, but I just wanted

to say that that is really something we can\'t

determine as an agency.

233

In terms of what you just asked, though,

if we were to get to a point where we considered a

use essential and pressed on, despite the Montreal

Protocol telling us that they no longer considered

that an essential use, then that might set up a

scenario where we would be producing CFCs that they

had not authorized us to produce. If that

happened, we would be out of compliance with the

Montreal Protocol, which I don\'t believe we want to

do.

At least in principle, this is a very\--as

folks have said, this is a very successful treat.

The United States has played an important role in

the treaty and is committed to the Montreal

Protocol. So, certainly, the best path forward

would be one that meets our commitments to patient

safety and access to important medicines but, also,

meets our obligations under the Montreal Protocol.

DR. CHINCHILLI: Dr. Lutter, did you have

a comment?

DR. LUTTER: No comment.

DR. CHINCHILLI: Dr. Martinez?

234

DR. MARTINEZ: Dr. Meyer, the decision,

and looking here at your Slide No. 12, just as a

point of clarification; Decision IV-25 that you

showed to is that a plan could be presented in

order to be in compliance with the Montreal

Protocol and submitted by the Summer of 2005 for

the continued use of CFCs.

So it could be that, if we all

consider\--and I am not saying that I am proposing

that, but simply saying that if we would consider

that since we cannot have the final rule before

March that we could propose that this date is not

December 31 but September, 2006. That could be

presented as part of Decision IV-25 to the Montreal

Protocol and be within the stipulations of the

protocol.

Am I right.

DR. MEYER: I think that is a correct

observation. Under that kind of scenario, I think

it would be quite reasonable for us to point out

issues of ramping up production in meeting the

critical need of patients. So I think that would

235

still meet the spirit of what was asked for.

What is asked for in Decision IV-25 is for

us to name a date-certain at which time we will no

longer consider albuterol to be essential. It

doesn\'t state to us what that date should be.

DR. MARTINEZ: I think the spirit of the

committee, if I may say, is that sufficient time

needs to be dedicated for us to be able to assure

patients that this product will be there. Thus, I

would say that a period of at least eighteen months

from the moment in which a final rule comes out

would need to be present for this to be fulfilled.

DR. CHINCHILLI: Mr. Mitchell?

MR. MITCHELL: In looking at dates, I

think there are no finite legal limits to the dates

the committee can look at or FDA can look at.

Obviously, the longer in the future that we are,

the more problems we might have with the Montreal

Protocol. But, in the Notice of Proposed

Rulemaking, our focus is basically we talked about

dates between twelve months after publication of

the final rule up to the end of this decade.

236

So that is sort of range we are focusing

on. Obviously, people are free to comment, suggest

any dates\--in the next century, but I mean, how

much consideration they will be given is another

question.

DR. CHINCHILLI: Dr. Reiss?

DR. REISS: Just the comment that you just

made, then, suggests that the end of 2005 data is

really not possible at this point given the

12-month timeframe that you were just alluding to.

MR. MITCHELL: No; quite the contrary.

Based on preliminary discussions we have had

internally in FDA and externally, that is the range

of dates we think are probably most likely. But if

we are presented with data during the comment

period, including the data that we have heard

today, then there is nothing to stop us from

finalizing a date that is any possible date. I

mean, that was just suggested to try to help guide

discussion or guide comments.

DR. CHINCHILLI: Dr. Jones, did you have a

comment?

237

DR. JONES: Elaine Jones, GlaxoSmithKline.

I just wanted to make one additional comment. We

know that the data of the final rule is obviously

something that would be that decision point but, in

addition to that, I just wanted to say that some

indication from the agency about what date they

were considering, even without the publication of

the final rule, would be sufficient for us to

consider to ramp-up our manufacturing processes.

MR. MITCHELL: That is very difficult for

us. The only way we can speak on this issue is

through notice and comment rulemaking in the final

rule. I could give you a date this moment, but it

wouldn\'t be worth the paper it is not written on.

So that is the way the Administrative Procedure

Acts works and our hands are pretty much tied.

DR. CHINCHILLI: Yes; Dr. Reiss?

DR. REISS: Along the same lines, I would

actually like to hear from my colleagues. If a

date is published in March of next year and then

the date that is published is the end of 2005, sort

of given what you have said today, or given what

238

has been discussed about a year or eighteen months,

how would everybody sort of deal with that issue

right now? Would we start ramping up now or would

you wait until March?

DR. JONES: Elaine Jones, GlaxoSmithKline.

If the rule was published in March and it was

December \'05 timeline, as I say, we have committed

to be able to produce 15 million MDIs within six to

twelve months. It is not an impossibility to

produce 30 and it would require considerable

investment on behalf of GSK, and considerable time.

So it is something that we had not discussed

previously and so can\'t give a definitive answer.

But, obviously, if that is what the agency

would like us to do, then it is certainly something

that we would consider.

DR. GARUTTI: Ron Garutti,

Schering-Plough. I have a proposal for you. The

proposed rule, the rule that has been distributed

outside today, is not yet published, as I

understand it. It is theoretically possible. You

will tell me why it is not practical. You could

239

withhold that for a day or two or three. There is

a lot of information. You have already a lot of

information from the major stakeholders that could

lead one towards December 31, \'05, as being a

proposed date now subject to comment.

DR. CHINCHILLI: What is your reaction to

that?

MR. MITCHELL: Complete and utter dismay.

I, personally, started drafting this thing in

August of last year. It will publish next week.

There is absolutely no realistic possibility of us

being able to make significant revisions to that

document, clearing it through our sister agencies,

clearing it through OMB and getting it published in

any sort of meaningful timeframe that would allow

us to get a final rule published in time for the

Open-Ended Working Group that meets next summer.

DR. CHINCHILLI: I think we expected that

response. Dr. Kercsmar?

DR. KERCSMAR: I think what we are hearing

is that, in the absence of having a firm date,

nothing will happen as far as increasing production

240

from the current manufacturers of HFA albuterol

right now. So I guess I just need somebody to tell

me that what I am hearing is that this date is not

realistic, because I think what I am hearing, the

corollary is that nothing will happen without a

date and a date that is realistic.

MR. FLANZRAICH: Neil Flanzraich, again,

from IVAX. Again, with the very important

understanding that, of course, our products are not

approved yet, I think I heard Glaxo say that it

wasn\'t definitive that they would try to

accommodate even a shorter warning period. We

certainly, with the hope and expectation that our

products will come to the market, are ready to

supply a very substantial part of the U.S. market.

I am sure that Schering, even though they

made a very good proposal just now, would also try.

So I don\'t think you can assume that the answer is

that there is no way that that date could be met.

DR. MARTINEZ: But, with all due respect,

patients are not saved by trying. They are saved

with the medicine available. While you try, they

241

may die.

MR. FLANZRAICH: But I think what you will

get more definitive answers\--people are saying they

can\'t speak today, but you will hear, between now

and the final proposal of the rule from the

manufacturers, and they may be able to accommodate

a shorter period of time. And then there will be

the kind of clarity that you need for the patients.

So we should not rule out the possibility of having

this come into effect by the December 31, \'05.

DR. CHINCHILLI: Dr. Moss?

DR. MOSS: I think it is important to

reiterate what Dr. Martinez said. I mean, if we

run out of these medications for patients, they

will end up in the emergency room. There will be

increased morbidity and potentially mortality. So

I think, in this situation\--I think everyone is

sort of saying the same thing, but we should make

sure we are playing it safe, that there is clearly

going to be the supply of medications for these

patients so that we don\'t run into that problem.

That would not be a good thing.

242

DR. MEYER: Dr. Moss, can I just

paraphrase what I think I heard you say just so I

am clear for the record.

DR. MOSS: Absolutely.

DR. MEYER: To the degree that there is

uncertainty in setting a date when the time comes

for us to do so, what you are saying is that when

we face those uncertainties, we should take a more

conservative approach in setting the date that errs

on the side of patient safety over sort of an

aggressive timetable in terms of the environmental

considerations.

DR. MOSS: What I would say is that the

company said twelve to eighteen months. You know,

if you thought twelve to eighteen months from July

1, it fits perfectly for the 18-month thing to

think that now, all of a sudden, we are going to

rush things and speed things up and hope it all

works. I think there is a safety issue there. So

I just wanted to note that.

DR. CHINCHILLI: Dr. Schatz?

DR. SCHATZ: Again, to be as specific as

243

possible, it sounds to me like the most

conservative and, I think, acceptable approach

would be to plan no sooner than eighteen months

from the final rule because we have a lot of

assurances that everybody can get ready by then.

Anything else sounds like it could be just trying.

DR. CHINCHILLI: Dr. Meyer, I think you

have heard the committee\'s feelings on this.

Any other final comment on this criterion?

Okay. Thank you. Let\'s move on to the next one.

\"Adequate U.S. postmarketing-use data is available

for the non-ODS products.\" So, were the committee

members satisfied with what they heard today in

terms of postmarketing data for non-ODS products?

Any comments, questions? Is it related to their

previous criterion? You are satisfied we have

resolved this one?

Dr. Swenson?

DR. SWENSON: Just for the agency, we

really didn\'t see any data regarding the safety and

the track record. Can you give us a brief

synopsis? I suspect, because they have been out as

244

long as they have, they are probably safe. But can

you tell us so from your data monitoring?

DR. MEYER: I think for the purposes of

the proposed rule, we really didn\'t contest that

this was not the case. In other words, these

products have substantial worldwide experience. We

have some postmarketing, formal postmarketing data,

available, particularly for the EM product as well

as some analyses for the GSK product.

At this point, the postmarketing

experience that we have seen, both from more formal

data and from the informal safety reporting, is

that these products do not appear to be

substantially different from the CFC products in

terms of how they perform. So we have not

expressed any concern in that regard.

DR. CHINCHILLI: Dr. Martinez?

DR. MARTINEZ: Does the agency have

information that will allow us to believe that

puff-for-puff the two products are equally

effective in producing bronchodilation?

DR. MEYER: The approval for these were

245

both based on comparisons to CFC products as well

as\--they stood on their own as far as safety and

efficacy, showing of safety and efficacy, but they

included programs where they were directly compared

head-to-head with the CFC products.

Both in terms of the pharmacodynamic

effect in FEV1 with one, two, four puffs, that type

of consideration in sort of a short-term study as

well in longer-term treatment studies, we didn\'t

see any substantial differences. As was stated

earlier by one of the manufacturers, and I forget

which one\--I think it was Schering-Plough\--the

mouth feel of these can be somewhat different. I

am sure individual patients may feel some

allegiance to one over the other.

But, in looking at those kinds of reports,

we have a lot of reservations because I remember

days when I worked for the V.A. and, depending

on\--back before there were generics available, the

Ventolin source would shift from seemingly quarter

to quarter. I know that those products were very,

very similar at that time, the Proventil and the

246

Ventolin.

Veterans would come in saying, \"You know,

this one doesn\'t work as well as the one you gave

me last month. I just doesn\'t.\" Unfortunately,

both asthma and COPD are diseases where patients

get better and worse irrespective of the specific

medicine. But they want to tie it into something

so, if their medicine happened to be changed at the

time they were feeling somewhat worse, they blame

it on the medicine.

So we do get those kinds of reports. But

all the data in the NDAs at this point really

showed very comparable results both in terms of the

pharmacodynamics as well as how they looked in a

12-week study, treatment study.

DR. CHINCHILLI: Thank you. Mr. Mitchell?

MR. MITCHELL: There is a study we cite in

the proposed rule. It was evaluating the vehicle

Evohaler, which is the HFA inhaler marketed in the

U.K., which is very similar to, but not quite

identical, to the Ventolin HFA product. That

study, even given the differences in the product,

247

does give us some assurance that we are not looking

at any serious problems.

DR. CHINCHILLI: Any other comments on

this particular criterion? If not, we will move on

to the fourth one because I do believe we will

spend some time on this. \"Patients who medically

require the ODS product are adequately served by

the non-ODS products containing the active moiety

and other available products.\"

Remember, the FDA is interpreting

\"adequately served\" to include the economic issue.

So who would like to start with this one? Dr.

Schatz?

DR. SCHATZ: I think Dr. Garutti pointed

out what I think we all believe, that this isn\'t a

question of if, it is a question of when. But that

\"when,\" as in the proposed rule, has a lot to say

in terms of the total cost of the healthcare

system.

We have heard a lot of good reasons to

make this transition as soon as possible, but the

only thorn, as you could probably tell from my

248

questioning, is the extra cost, which it sounds to

me is at least \$500 million a year. Yes; there are

some things that could raise it and some things

that could lower it, but I think that that is as

good an estimate as we could come to.

In a system that doesn\'t have unlimited

resources, that is an important consideration. So

that is going to be a problem, no matter what to

some extent, but I just have to raise the concern.

I would certainly like to spend that \$500 million

on something other than albuterol.

But I think the only real lesson is to

make sure that however this transition occurs, we

do it in a way that tries to mitigate, as much as

possible. There are clearly some things that could

do that, that extra cost. But that is a very

disturbing number to me.

DR. CHINCHILLI: Dr. Swenson?

DR. SWENSON: I had some questions to Mr.

Rozek about the NERA study, if he is here. I think

he is coming to the microphone. I will go ahead

and start my question. On your slide that was

249

entitled \"Overall Impact on Patients and

Third-Party Payers in the First Year,\" the final

figure you give in the first year, increase in cost

per asthma or COPD patient is \$16.00 which doesn\'t

sound that high.

But what I want to ask you is that that is

a global average figure and the group that we are

most concerned about is the cost-sensitive\--those

people that probably fall into the underserved

category.

As I do my math here, I think that if

there are 50 million MDIs prescribed in the United

States per year and we say, for purposes of just

simplicity, we have 20 million patients using those

50 million, that comes out to about two-and-a-half

canisters per year. Am I right on that?

DR. ROZEK: Yes. In our calculation for

the \$16.00, we used 20 million asthma patients and

10 million COPD patients. So we added those

together and got about 30, or slightly over 30,

million, total.

DR. SWENSON: So that figure of \$16.00,

250

then, is calculated in that fashion. But I am

worried that those patients that may be most

sensitive to transition here may be using probably

one or maybe even more canisters per month so that

the cost impact to them comes down quite heavily at

maybe something around \$100 per year.

Did you go into a breakdown on those

costs?

DR. ROZEK: We looked at\--to calculate

that particular number, we used the total

recalculated as a cost to the healthcare system and

then the number of diagnosed asthma and COPD

patients. We, then, pointed out, though, that

there were other programs available to ensure

access to people who might have difficulty

affording one, two, three or four canisters a year

such as the patient-assistance programs, Together

Rx, GSK Orange Card, the public-assistance programs

such as the D.C. Healthy Families, D.C. Healthcare

Alliance. The additional samples would be

available to people who would need additional

canisters of the product as well.

251

So we felt that there were\--certainly what

we presented were average results and that there

may be variation within that, some people using one

canister, some people may be using three or four.

For the people that couldn\'t afford three or four,

there would be these patient-assistance programs.

DR. SWENSON: Do you, or possibly the

companies, have any idea of the effectiveness of

these assistance programs? Are they 80 percent

effective to the target groups?

DR. ROZEK: I think we heard today from

Glaxo in terms of the total number of people that

have been helped with albuterol-specific programs.

Glaxo has a relatively small share of the total

albuterol being used today. I believe it is about

3 percent, and they were spending significant

resources, or valuing the albuterol that went

through their patient-assistance problem quite

significantly for that 3 percent marketshare that

they currently have.

Schering indicate they had a similar

program. I would assume that Glaxo would expand

252

its program as its marketshare expanded and that

there would be more people who would be aware of

the Glaxo program as a result of information

available about the Glaxo product.

DR. SWENSON: While I have you up here,

just one more question, slightly different, and

that is you made what appears to be a very

conservative, maybe almost worst-case, scenario

here because you simplified and didn\'t assume any

changes in the outreach of the companies and other

changes that they might do and the way prices may

fluctuate.

Given that we might have maybe two more

and possibly other players in this market, what

number of companies competing really make a

difference in price. There might be examples

within the pharmaceutical industry on this issue or

maybe more broadly in the business world. What

number of competitors really begins to make a

difference on price? When does competition really

come into play?

DR. ROZEK: That is an interesting

253

question that economists debate all the time. Many

of the answers that relate to specific

industries\--when I worked at the Federal Trade

Commission, for example, there was a study that one

of my colleagues there put out that we used to use

in deciding when to bring merger investigations.

It had to do with the strong third-firm effect.

When you have a strong third firm in the

marketplace, that was effective at alleviating any

market power that the first two firms might have.

So if you were looking at a merger of two firms

that would create a strong third firm, that was

considered to be a beneficial effect on market

competition.

But, again, this is an industry-specific

issue. Interestingly enough, I did a study on

competition in the pharmaceutical industry from the

following perspective. I looked at all of the

products that were identical chemicals. Ventolin

and Proventil appeared in that list, if you looked

at data from the late \'80s and early \'90s.

Erythropoietin would be another example of that

254

kind of competition where they were identical

chemicals\--no generics\--identical chemicals

marketed by the branded company.

You can see, when you have only two, in

that particular case, you get a lot of competition

for marketshare, for getting onto formularies, for

disseminating information about the product and

distinguishing the product one from the other even

though they are the exact, same chemical in terms

of what kinds of patient-assistance programs are

available, what kinds of benefits you can provide

to patients other than the drug, itself, in terms

of registries for use of the product and reminders

and that sort of thing.

So, in the pharmaceutical industry, I did

do a study of competition between two players when

it was the exact identical product and there was no

threat of generic competition. You can see there

that marketshares move quickly back and forth and

that prices do respond in a downward direction when

the two are there, assuming that you have enough

big buyers who can move marketshare and can extract

255

that kind of gain.

Now, that is not to say that the gain

flows to everybody from that type of competition

because it does help to have a very aggressive

buyer side of the market to gain that. But I would

say generally a strong third firm is very helpful.

If you look at the Department of Justice-Federal

Trade Committee Merger Guidelines, they like to see

about five equally sized firms in a market. But

sometimes they will approve mergers with four.

I think we are approaching, in the case of

albuterol with Sepracor and with IVAX and with the

availability of licensing opportunities from 3M,

for example, to anyone who has an albuterol product

they want to package in the HFA technology, that

threat of competition, as well, adds to the overall

competitive structure in the marketplace.

So two could be enough for competition in

a pharmaceutical product, three for sure and, if

you are going to four or five, you wouldn\'t have

even any problem with the Federal Trade Commission

or the Department of Justice, in my view, saying

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anything was amiss in that kind of a market

structure.

DR. CHINCHILLI: Thank you, Dr. Rozek, for

answering those questions. Further comments,

statements from the committee? Yes; Dr. Lutter?

DR. LUTTER: If I could offer one piece of

data in response to one of the questions just

asked, we looked, as I described, at the MEPS data,

the Medical Expenditure Panel Survey. Among the

people surveyed, which is the noninstitutionalized,

under 65, population, if you look further at those

who have family incomes less than 400 percent of

the poverty line and who are either uninsured or

who have non-group insurance, they had 3.8

prescription per year for albuterol MDIs.

DR. CHINCHILLI: Dr. Martinez, did you

have a comment?

DR. MARTINEZ: No.

DR. CHINCHILLI: Dr. Moss?

DR. MOSS: I have a question for some of

the companies. This is not the first country where

we talk about transitioning so this has happened in

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other countries. Realizing the healthcare systems

work differently, but what happened in the prices

of the Proventil and Ventolin HFA in other

countries where this has been approved? Did their

prices go down? If so, why?

DR. CHINCHILLI: Anybody respond to that?

DR. JONES: Elaine Jones, GlaxoSmithKline.

As you said, actually, the pricing system in the

European countries where we have done this and also

in Australia and Canada are totally different. So

the scenario can\'t be applied.

DR. MOSS: Good. Now that I have you up

here, what is the price compared\--if you convert to

American dollars, how do these products compare in

other countries compared to the United States.

That is really what I wanted to get you to say.

DR. JONES: Actually, I don\'t know the

price. I don\'t know whether any of our commercial

colleagues here know the price of Ventolin HFA

across Europe. I don\'t think we have that

information here, but we could\--sorry; I don\'t have

that information.

258

DR. CHINCHILLI: Any other questions,

comments, from the committee? Dr. Martinez.

DR. MARTINEZ: I think this is the issue.

For any practicing physician, this is the issue

because, particularly for the pediatrician, the

main group of patients that we see with severe

asthma coming to our emergency rooms are minority

patients who are either in poverty or are

disenfranchised or don\'t speak good English or have

many of the other difficulties that make them

particularly susceptible to severe disease.

Thus, considering this very attentively is

a need because our main objective is to provide the

public with the best possible medicines that we can

have at prices that are affordable and that will

allow them, in this case, to survive because this

could be a life-threatening disease.

The main concern I have is the conflict in

which, in this case, is not a conflict of interest

of but a conflict of care. We all care about the

earth and about the environment and we all would

love for it to become better and better.

259

Certainly, there are many other ways, by the way,

in which we could make it better, but I know that

we are not discussing this here. We are discussing

this issue very specifically.

What we are asking the public, and that is

the first point I wanted to make, is to spend,

according to the proposed document that Dr.

Mitchell has so clearly written, that, in the best

possible scenario if the rule comes in 2006, the

public will transfer to the pharmaceutical industry

\$6.9 billion between 2006 and 2015.

That will happen because, as a society, we

have decided that we will take care of the

environment. If that were the society as a whole,

the issue would be clear and simple. But my

opinion is that it is not. The reason why I say

that is that, although we have been given means of

distributions of cost by patient, any practicing

physician knows that these distributions are so

tremendously skewed that, in this case, the mean

has no meaning.

Most of the patients who really spend most

260

of the money are a small group, perhaps 10 percent

of all patients with asthma, who spend probably 80

percent of the cost. That is not only for

hospitalizations. It happens that those patients

are primarily poor, disenfranchised, and not

participating in the system, not knowing about the

system, no knowing about their rights.

I was telling about an anecdote. Two or

three weeks ago, I was on call. A young girl who I

had followed for two years and not seen for two

years came to the emergency room dying of asthma.

When I asked the parents why is it that the girl

was there, they said, well, we didn\'t have money to

buy the inhalers and we didn\'t even have money to

buy the albuterol. But you have the right. They

didn\'t know that they had the right.

Now, this is not going to change from one

day to the next. So the difficulty when we take a

measure like this and when we do something like

this is that we affect, or may affect,

significantly the lives of a lot of people. That

needs to be considered because it is part of our

261

everyday life in our practice.

I do understand, and I commend them for

that, that industry has made significant efforts to

palliate this by providing for free these products

to individuals and patients who will not have

access to these products. The difficulty is that,

in the same way that those patients don\'t know of

the existence of these rights that they may have in

many states, even if they don\'t have insurance for

their children to have insurance, they also don\'t

know about these systems and, thus, cannot use

them, don\'t have the opportunity to use them.

The greatest difficulty, then, is that I

think this ruling, or this rule, inevitably, by the

way in which our system is built, will

significantly affect the poor and the

disenfranchised and that, unless an effort is made,

and I haven\'t heard of any systematic effort to

ensure that this will be palliated in the best

possible way, like it has been done with other

measures that, as a society, we have taken.

For example, for persons with disabilities

262

now, we have a lot of things that are going well

for them, certainly, they are not enough. But

society, as a whole, is paying a price for that

because, for example, at least in our state,

businesses that put up ramps for people who need

them and that are disabled can get a tax cut, or

something of that sort.

I don\'t see any of those measures being

thought about here and I am completely convinced,

given my experience in my practice, that this will

significantly affect the disenfranchised and the

poor.

So, in the end, what we are really doing

is, for the sake of the atmosphere which will be

good for all of us, we are, once again, charging

the disenfranchised and the poor. I don\'t know if

there is a solution for that because of the way in

which our system is made, but, for a practicing

physician, this is something that cannot be denied.

It is true, as a representative of the

American Thoracic Society said, and I completely

agree with him, that many other costs are

263

increasing and that, in the end, we cannot, every

time we make a decision, think about who and whom

is going to be affected. But I think it is very

important for us to take all these issues into

consideration.

DR. CHINCHILLI: Dr. Moss.

DR. MOSS: That is why I asked the

question about the marketing for these programs

because I agree with you. I don\'t see them\--you

know, the companies talk about hundreds of

thousands of people but I don\'t know about them and

I don\'t think a lot of people know about them.

I think there are other trickle-down

effects which is what I talked about before where

only 6 percent of the medications are prescribed in

the hospital. Everyone is worried about the retail

side of it, but there are indigent-care hospitals

around the United States where they are on the

means of falling apart. I mean, all these

hospitals\--and there are huge financial strains.

Maybe private practitioners outside of Chicago can

deal with stuff, but those of us that care for the

264

indigent-care patients, it is about to fall apart.

It is cracking and crumbling.

States are not giving the money back. The

pharmaceutical budgets are going up. Activated

protein series Agras is a good example of that.

They were afraid that that one compound might

destroy the entire Grady Hospital system. It is a

\$7,000 drug and it is very expensive. Different

situation here. Not as expensive, but a much more

common disease.

So I agree. I think that is the bottom

line is the cost issue here and the companies need

to address that. That is why I asked the question

in a round about way, how much do these medications

cost in other countries. If they are less, why are

they less and how are the companies going to deal

with this issue. I think everyone agrees that this

needs to be done, but the cost issue will impact

patient care.

DR. CHINCHILLI: Any response from the

companies? We heard about some of your programs

this morning. Okay. So committee members? Do you

265

have any specific recommendations to the FDA in

proceeding forward with this, in terms of the

economic issue, in terms of the problems that the

poor and the indigent will encounter with their

asthma because of this? Dr. Schatz?

DR. SCHATZ: The one thought that comes to

my mind is that the longer the transition period,

presumably the more certain things might happen in

terms of additional competitors, additional

experience with what is going to happen. I mean,

again, I think the concept of thinking of some more

specific ideas and things that various people,

including the companies, could do to mitigate it is

important, too, but it does seem like that the

longer the timeframe involve, the less this impact

would be, not only because it becomes a year or two

or three closer to generic, but other market

factors as well.

So I guess that would be my most immediate

thought.

DR. CHINCHILLI: Dr. Moss?

DR. MOSS: Not to sound too wishy-washy

266

here, but, on the flip side, I think it is very

important that companies have made the effort to

come up with environmentally friendly medications

and should be commended for that and receive some

compensation for that. So I think that would be a

bad precedent to say that this stuff is not

important to go through.

So, as I just said, the price is an issue

but I think this has to be looked at a little as an

issue longer term, that the message should not be

given to pharmaceutical companies that having

environmentally friendly strategies are not felt to

be important.

DR. CHINCHILLI: Any other comments,

recommendations by the committee? Dr. Jones?

DR. JONES: Elaine Jones. We talked a lot

about Bridges to Access as well as the other

GlaxoSmithKline programs. We have endeavored to

reach everyone and we have done considerable things

in order to be able to reach everyone. We try.

Obviously, we haven\'t reached everyone. You

haven\'t heard of some of the programs that we have

267

done, but we are committed to actually getting our

message to everyone and are willing to work with

the agency in means to achieve this.

We have, currently, 435,000 patients

registered in the Bridges to Access program which

actually gives free medicine to the population that

you are speaking about. There is no ceiling to

that. Any patient who is eligible will receive

medicine and they won\'t just receive one medicine.

They will receive Ventolin or any preventative

medicine as well if they are prescribed.

As I say, we will continue to strive to

get the messages about GSK\'s programs to everyone

and, as I said, we will work with the agency, if

they have any ideas about how we can expand and get

these messages across. We believe it is a very

valuable program.

DR. CHINCHILLI: Thank you. Dr. Schatz?

DR. SCHATZ: Again, I don\'t want anything

to think that I also don\'t appreciate the efforts

of the pharmaceutical-company industry in trying to

respond to this, but, again, the cost issue\--but I

268

wanted to raise that there has been an emphasis on

the people who would be eligible for the Bridges to

Access and similar programs and that is

appropriate. This is clearly an impacted group.

But I take care of the working patients in

an HMO and I can tell you that these patients, who

would absolutely not be eligible for this, are also

impacted when their co-pay goes from \$10 for a

generic to \$25 for a brand. We have had some

changes recently that we are hearing from a lot of

patients. These change make a difference also.

So, while I absolutely agree that the

typically impacted may be more impacted, this is

something that is going to affect, as the whole

healthcare crisis is more and more, a much bigger

segment of society, and I don\'t think we can forget

that either.

DR. CHINCHILLI: That is a good point.

Dr. Reiss?

DR. REISS: I just wanted to point out

that, while everyone is raising really good issues,

we are really not here to debate the healthcare

269

system and how the healthcare system works. We are

here to debate the merits of making this transition

and its impact. A lot of the things that have been

raised really have to do with the form and

structure of the healthcare system and not

necessarily whether this is an appropriate or

inappropriate thing to do.

DR. MARTINEZ: I respectfully disagree

because, if I read correctly, it says, \"Patients

who medically require the ODS product are

adequately served by non-ODS products

containing\--,\" and one of the issues that we have

been told that needs to be considered is cost. We

are not discussing the healthcare system here. We

are just reading very precisely what it says here.

Here it says, very precisely, \"If they are going to

be adequately served by non-ODS products containing

the active moiety.\"

Well, if they can\'t buy them, they are not

being adequately served. So it is not an issue of

the healthcare system. My opinion is that a

significant number of patients are not going to be

270

adequately served. I am not saying that what we

have to recommend or our opinion should be that

this is not done. It is just very important for

those who make the decision to understand that.

DR. CHINCHILLI: Dr. Schatz?

DR. SCHATZ: Again, I would just add that

what we are talking about is a change in our

healthcare system, so we have to bring up our

healthcare system. I don\'t think anyone that I

have heard has done it to discuss the healthcare

system. It is how this change makes an impact in

our healthcare system.

DR. JONES: Elaine Jones, GlaxoSmithKline.

I just wanted to make one additional comment to the

previous comment. The current marketplace has no

samples in it, professional samples, or very few

for albuterol CFC. GlaxoSmithKline has committed

to giving at least 2 million professional samples

each year during the transition periods.

DR. CHINCHILLI: Dr. Meyer, and Dr.

Sullivan, you have heard some of the discussion by

the committee members. Do you have any reactions,

271

any comments? This is a dilemma, this particular

issue, and we knew this would be the thorniest

issue to deal with.

DR. MEYER: I would just say that I very

much appreciate the thoughts that we have heard

expressed and I actually would also like to

express, again, thanks to the people who are making

public statements including the regulated industry.

I think you understand our dilemma in

proposing the rule and I think we will get to

questions\--or, not questions, but points,

subsequent here whether there is anything else that

you think we could ask for or other things that you

would suggest that we do to help us get to a final

rule.

So we very much appreciate the comments

and look forward to any suggestion you might have

as to ways to sort of help get through this

dilemma. This is a very important issue.

DR. CHINCHILLI: Why don\'t we use that as

a segue, then, into Items, Issues, 2 and 3.

Committee members, please suggest any additional

272

data or information you believe would be important

to consider in making a determination regarding the

essential-use status of albuterol. Also, please

comment on any additional issues you believe would

be important to consider in making a determination

regarding the essential-use status of albuterol.

Is there anything we can recommend to the

FDA, to the agency, about any additional data or

information that might help them proceed with this

decision? Dr. Moss?

DR. MOSS: I don\'t know if it is

possible\--it sounds like a lot of this economic

stuff is based on a lot of assumptions, but it

might be helpful to see how the economic impact

would change if there is a third or fourth drug

since, if that is not going to happen right away,

that might happen down the road, and it might lower

the burden of the economic impact which would

address the issues that everyone has raised here.

So I don\'t know how feasible that is, or

how good the data is, but that might help give

better information upon the effect of cost. If the

273

cost goes down, then there would be more access to

patients and the negative effects of not having

access to medications would be alleviated to some

extent.

DR. CHINCHILLI: Dr. Swenson?

DR. SWENSON: If I could ask the agency

members here, and, again, this may be beyond your

powers and your charge, but, in going before the

Montreal Protocol for these medical exemptions,

have the issues, not so much of the availability of

other products that are satisfactory and equal but,

in fact, the issues of the cost implication to

patients, been discussed? Do they turn a deaf ear

to these discussions?

I get the sense that we are being pushed

to come to full compliance here and we have such a

unique situation in the United States that, in this

case, has the case been made to attempt some, at

least prolongation of this transition to allow for

the peculiar and unique nature of our healthcare

system?

DR. MEYER: I certainly don\'t want to

274

characterize the Montreal Protocol, the response of

either the body as a whole or individual parties to

these kinds of considerations but, yes, the issue

of the unique circumstances of the United States

healthcare system and the impacts that are more

significant in the United States, we don\'t have

numbers to talk about here, but I can assure you

that the differential we are talking about here is

greater in the United States and the overall cost

of these medications is greater in the United

States than the other countries that have been

referred to where the phase-out has occurred for

albuterol.

Those issues have been presented and

argued to the meeting of the Montreal Protocol.

DR. CHINCHILLI: Dr. Lutter?

DR. LUTTER: Let me offer another insight

in response to that same question. I was in

Nairobi last October, November, where this most

recent decision by the Montreal Protocol parties

was taken. At that time, the decision on the table

was what would be the date by which each party

275

would have to set a date-certain to delist.

But also on the table was a proposal to

set a date-certain. We offered two explanations to

other parties in the Montreal Protocol. One is

that we have an Administrative Procedures Act. We

have a very different form of government than a

parliamentary system that exists in other

countries. That lays forth a different process for

delisting that, necessarily, is more time consuming

but also, of course, the economic one.

I think the sympathies were mixed. Some

countries were much more attuned to the idea that

the U.S. system is unusual if not unique and others

view this is a problem that we would have to solve.

So I am not sure I have clarified the

understanding very much, but it was brought up, it

was debated, and we had sort of a mixed reaction.

DR. CHINCHILLI: Committee members, I

don\'t know if we are running out of steam or we

just have nothing else to offer. This is complex.

Any other comments, recommendations, questions?

DR. MARTINEZ: May I ask a question?

276

DR. CHINCHILLI: Sure. I am begging for

questions.

DR. MARTINEZ: Members of Congress and

state legislatures and so forth are considering the

possibility of opening the U.S. market to

importations of medicines from other countries with

the idea that this could decrease costs of these

medicines. In which way such a process would, or

will, affect\--I am asking the agency\--issues

regarding this particular medicine. This is from a

person who lives 60 miles from the border and knows

how much these medicines cost in Nogales, Arizona.

MR. MITCHELL: By the terms of our

regulations, we are really focussing on products

that are approved in the United States. We cannot

really consider prices or supplies of drugs in

Canada, Mexico or any off-shore sources. The

answer is no, we are not really looking at those

sorts of issues in this process.

DR. CHINCHILLI: Dr. Schatz?

DR. SCHATZ: I mean, again, the only other

perspective or question\--there are a lot of things

277

we have heard about that theoretically could

mitigate what we are all concerned about but that

is nothing that can be written into a rule, I would

guess. We could all hope it happens.

So I think we do need to focus on what

sorts of things this rule could do to mitigate

this. That is where I said that the only thing I

can think of is delaying it some. Again, I don\'t

like the idea that that doesn\'t reward companies

that we should feel positive toward who have taken

these steps towards something we all eventually

want.

But I can\'t think of any other way to

write this rule in a way that makes a certainty

less of a financial impact. I would open that up

to other people because everything else, while I

hope it happens and it could happen, it is actually

nothing that I can think of that the rule can do

anything about.

DR. CHINCHILLI: When we discussed the

issue of patient safety with one of the previous

criteria, it is related to that, that waiting, not

278

shooting for December 31, 2005 when the

announcement may not appear until March of 2005,

there is an issue of concern about patient safety

and enough inhalers being available. So I think,

yes; the two are tied together.

Yes; Ms. Schell?

MS. SCHELL: I guess I need a point of

clarification probably from the companies. But if

this is inevitable that this will be going to

happen but the date is unclear and it may be

delayed, why can\'t you start production eighteen

months anytime and still be ready for whenever the

date appears?

DR. MEYER: I was going to answer on their

behalf, but I will let them answer.

DR. GARUTTI: Ron Garutti,

Schering-Plough. It is not in anybody\'s interest

for the industry to produce a great deal of HFA

product that is not going to essentially really be

used until the kind of behavior change that we

alluded to, provider- and patient-wise, has the

impact of, this is here, this is now, this is

279

happening and everyone is focused on it.

It would not be to any of our interests

for a product to be produced and run past its

expiration and have to be destroyed.

MR. MITCHELL: Also, to reiterate a point

that was made earlier, the companies would be

expending large amounts of capital in order to get

this capacity on line. To ask them to spend that

capital and then not generate any revenue with it

seems, just as a personal point, to be somewhat

impractical.

DR. CHINCHILLI: Committee members, last

change. Final comments, questions, issues? Dr.

Reiss?

DR. REISS: Just one other point to follow

up on the questions about the economic analyses

that we were talking about before. It might also

be helpful to do a more detailed economic analysis

where we are talking about mean values, and one

might be hidden within those mean values and what

not, to be able to really sort of understand who is

the real population at risk that might be affected,

280

might shed and provide some additional light on the

topic as a follow up.

DR. CHINCHILLI: Thank you. Dr. Meyer, it

looks like the committee has exhausted itself.

DR. MEYER: I am not sure whether there

were any other observations. We asked about data

and so on, but I guess the other thing is you have

perhaps, or hopefully, had a chance to read through

the proposed rule. You have certainly heard a lot

of presentations and discussion today. Is there

anything else you think we are missing in this? Is

there some other element that we need to consider

that we, perhaps, haven\'t considered?

It is perfectly acceptable if you don\'t

have any, but I just wanted to be clear on that,

whether there is anything else we have missed.

DR. CHINCHILLI: I guess not.

DR. MEYER: If not, then I would like to

certainly thank you all for your careful

deliberations today and for your attendance, your

thoughts. This, obviously, has been quite an

undertaking to get to this point and I think we

281

will take very careful thought on our part moving

forward. We appreciate your adding to the

considerations that we need to take as we do move

forward.

I would state that, apart from this effort

with the albuterol, the transition to non-CFC

products is actually, I think, by and large, going

to be easier and more natural with some of the

other products. We have already seen, as I have

pointed out in one of my slides, a fair amount of

transition occurs already.

Albuterol is the only MDI for which

generics are available. To date, it appears that

the HFA alternatives are priced quite comparably to

the branded products that they replace. I guess in

the case of QVAR, it might even be somewhat lower

than the branded products.

So, where there is not generic

competition, where there is sort of one-on-one

replacement by the same companies and so on, a lot

of these issues go away. There will still be

occasions where we will come back to this committee

282

for products that are not being reformulated, as

mentioned this morning, and I suspect epinephrine

will be a particularly interesting discussion in

the not-too-distant future.

But, for the purposes of today, I thank

you. I thank Dr. Chinchilli for serving as our

Acting Chair today and look forward to future

discussions with the committee. Thank you.

MS. JAIN: Before the meeting is adjourned

and the committee members leave, if anyone would

like to have their background information mailed to

them, please just leave them at your seats with

your name tag. We are happy to do that for you.

Thanks again to all of the open public

hearing participants and the time that they took to

do their detailed research, present and submit

written and Powerpoint presentations. Thank you.

DR. CHINCHILLI: Thank you, everyone. We

are adjourned.

(Whereupon, at 3:38 p.m., the meeting was

adjourned.)

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