FDA Makes Obesity Drug Available to More Americans

VIVUS (NASDAQ: VVUS  ) took a much-needed step toward accelerating sales of its obesity drug Qsymia today when the Food and Drug Administration approved a modification of the company's Risk Evaluation and Mitigation Strategy, or REMS, to allow sales of the drug in retail pharmacies.

REMS are established by the FDA when drugs are potentially harmful, especially if they're used in the wrong way. They can be fairly mild -- including a patient brochure, for instance -- or they can make doctors and patients jump through hoops to get the drug, such as requiring training for doctors or enrolling patients in a registry to track side effects.

In Qsymia's case, the drug has the potential to cause birth defects if taken by pregnant women. In addition to a medication guide, patient brochure, and a voluntary health care provider training to get the word out that women should avoid getting pregnant while on the drug, the FDA told VIVUS that it would only be able to sell Qsymia at mail-order pharmacies.

But by the time Qsymia was approved, the agency had already backed down from its hard-lined stance, telling the company that it was open to the idea of selling the drug through retail pharmacies. VIVUS applied to change the REMS to include certified retail pharmacies capable of following the rest of the REMS program, which the agency approved today.

The expansion is bad news for Arena Pharmaceuticals (NASDAQ: ARNA  ) and Eisai, which will launch their competing obesity drug, Belviq, as soon as the DEA decides on its potential for abuse. It would have been easier for the companies to launch while Qsymia was still only available through mail-order pharmacies. Of course, the companies have a bit more time since VIVUS said it could take up to 90 days before Qsymia would be available in retail pharmacies.

The FDA's lighter stance is good news for Orexigen (NASDAQ: OREX  ) , which is hoping to reapply for approval of its obesity drug Contrave later this year or early 2014. After taking a hard-lined stance, rejecting three obesity drugs over a few months, the agency has continued to signal that it's willing to work with obesity drugmakers, which should smooth Contrave's approval process.

The modified REMS will help boost sales of Qsymia since patients are used to picking up prescriptions at pharmacies rather than ordering through a mail-order pharmacy. The change should also make things simpler for the doctor, which won't have to coordinate with the mail-order pharmacies.

While the change will help, it's not sufficient by itself to get Qsymia sales to blockbuster status. VIVUS still faces an uphill battle to get insurers to pay for the drug. Without coverage, many patients are going to experience sticker shock no matter where they go to get their drug.

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