A Diabetic Compromise

The Food and Drug Administration put Bristol-Myers Squibb (NYSE: BMY  ) and AstraZeneca (NYSE: AZN  ) in a predicament, but it looks like a compromise is going to resolve the issue. It'll cost the companies some money, but at least they'll get their diabetes drug, Onglyza, on the market.

The agency recently came up with new guidelines for diabetes drugs after heart issues were discovered with GlaxoSmithKline's (NYSE: GSK  ) Avandia. That's a reasonable move, except that there were drugmakers that had already completed their trials and submitted the results for approval.

So Bristol-Myers and AstraZeneca analyzed the trial data for Onglyza and couldn't find any sign that the drug was causing heart issues. But the FDA would rather see trials specifically designed to test hypotheses and doesn't really like post-hoc analysis -- ironic, as that's how Avandia's side effect was found. With that conundrum in mind, the agency sought counsel from its advisory panel yesterday.

The panel shrugged off the worries and said that the post-hoc analysis was good enough, voting 10-2 that the Onglyza data was sufficient to rule out unacceptable cardiac risk.

Sort of.

Panel members weren't completely convinced that there are no heart issues -- especially in patients most at risk, like the elderly -- so they unanimously voted to recommend that the FDA require Bristol-Myers and AstraZeneca to run post-marketing studies to specifically look for heart issues.

That's probably about the best the companies -- and Novo Nordisk (NYSE: NVO  ) , which has an advisory panel meeting today -- could have hoped for. Assuming the FDA follows the recommendation of the panel, Bristol-Myers and AstraZeneca can get on the market and start competing against Merck's (NYSE: MRK  ) Januvia.

With the FDA increasing its safety surveillance, I imagine phase 4 trials are going to become more common. Rather than fight them, companies should embrace them and be happy that the FDA is letting their drugs on the market before the studies are complete.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Novo Nordisk is a Global Gains pick. The Fool has a disclosure policy.


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