- The Food and Drug Administration is scaling back domestic inspections to try to protect agency and industry staff as the coronavirus outbreak reaches a tipping point in the U.S.
- All routine surveillance inspections — generally done every few years — will be postponed. For-cause inspections will be evaluated and only proceed if they are mission-critical, FDA Commissioner Stephen Hahn said in an Mar. 18 statement.
- The FDA also is considering alternative ways of monitoring facilities, including evaluating records instead of conducting an in-person inspection, Hahn said. The agency had already moved to postpone almost all overseas inspections.
The announcement sparked questions among Wall Street analysts about possible delays in the drug-approval process, in which inspections play a critical role. Hahn didn't specifically address that issue in the FDA statement, but did voice confidence that the industry generally abides by the rules.
"FDA-regulated firms understand and appreciate their shared responsibility to ensure the integrity of the supply chain and we will continue to communicate with them during this time to underscore this partnership," Hahn said.
Possible delays in product approvals are particularly drawing the attention of investors who hold a contingent value right, or CVR, that emerged from the Bristol Myers Squibb purchase of Celgene in 2019. Celgene investors at the time got tradeable CVRs that could yield a payment of $9/share if three Celgene drugs win FDA approval by certain dates.
Under the CVR terms, the multiple sclerosis medicine ozanimod and lymphoma therapy liso-cel must win approval by Dec. 31, while the multiple myeloma treatment ide-cel must gain clearance by March 31, 2021.
Several analysts in recent days express confidence the CVR remains on track.
The target decision date for ozanimod is Mar. 25, which likely means the agency has already done most of the work — including inspections some time ago — on the application, Mizuho Securities analyst Salim Syed wrote in a Mar. 16 note to investors.
Analysts at Cowen & Co. also said there is low risk for delay to ozanimod. But "modest risk" has now emerged for the delays to the other two drugs, though liso-cel has some cushion with an Aug. 17 target action date, they wrote in a Mar. 17 note to investors. And because ide-cel probably won't have the bulk of its review until the second half of this year, it "may go unaffected," they said.
Of broader concern, however, is Americans' confidence in a drug supply chain that has been under scrutiny amid safety-related recalls of widely used generic blood pressure and heartburn drugs. The coronavirus pandemic has brought even greater attention to the industry's reliance on China for drug ingredients.