Drug Industry Experts Wary of State AIDS Remedy Tests

Lawmakers gave thousands of AIDS victims hope by creating a separate state system to supervise testing and licensing of potential remedies for the fatal disease.

By providing an alternative to the federal Food and Drug Administration, backers of the measure--passed unanimously by both houses of the Legislature last month--were seeking a more expeditious means to get possible cures to dying people.

But many drug industry experts are far less optimistic about the chance that an AIDS drug would emerge any faster than it would under the existing federal system.

The political, economic and scientific realities of the pharmaceutical business may keep the big companies with the most promising new drugs from participating in California’s unique program.

The expense of testing may preclude many companies from seeking both state and federal approvals concurrently.

And the number of companies capable of seeking California approval to offer drugs is severely restricted in the first place.

Under the laws governing drug development in the United States, FDA approval for testing or sale is only necessary when interstate commerce is involved.

But if a company can research, test, manufacture and distribute a drug within a state’s borders, only the state’s approval is necessary, according to Richard Jacobs, special assistant to the California attorney general. Under this exception, Nevada has approved an anti-aging drug and Arizona one for scorpion bites.

The new legislation specifically names AIDS drugs to be covered by the law and earmarks $500,000 for the state to hire additional staff and to contract with outside specialists to handle the flow of applications.

That flow may just be a trickle.

“We don’t expect the law to have a significant effect on our development plans,” said Michael Ostrach, senior vice president of Cetus Corp, one of California’s leading biotechnology firms, with annual sales of $60 million. Cetus is the developer of interleukin-2 a drug now in the final stages of human testing as treatment for several cancers. The company is about to begin FDA-approved tests on AIDS patients.

“Companies like us have little incentive” to seek California approval for testing or sale, Ostrach said. “It doesn’t make sense to concentrate on the California market when looking at $50 million to $100 million and five to seven years of work” to develop a drug. And, he said, “it would not be prudent to split our efforts between the FDA and California.”

Syntex, California’s largest pharmaceutical concern, with annual sales of about $1 billion, said its most promising AIDS-related drug, Cytovene, is manufactured at plants in Colorado and Ohio and, therefore, can be tested and sold only with FDA approval. But even if it did qualify for the California program, Syntex is committed to seeking federal approval for its drugs, spokeswoman Michele Moore said. “We are pleased with how quick FDA review has been,” she said.

Genentech, which has a line of drugs that could be of use in fighting AIDS, has taken a more conservative approach. “It is far too early to determine whether (the California procedure) will be utilized by Genentech,” a spokesman said in a prepared statement. The company currently has one potential AIDS-fighting drug, Gamma Interferon, in clinical tests under the FDA. Analysts who cover the company said Genentech has too much invested in its tests with the FDA to change course now.

“I don’t see any advantage,” said Cynthia Robbins-Roth, a consultant to the drug industry and publisher of BioVenture View. The established companies, “don’t want to anger the FDA. If you are a start-up company and you want to succeed, you will also want to build a relationship with the FDA,” she said.

“If you have good data, you’ll want to go with the Feds anyway. If the California standards are any less than the FDA’s then it will all be a joke,” Robbins-Roth said.

Stuart E. Richardson, chief of the Food and Drug branch of the state Department of Health Services, which will oversee the application process, said the state has adopted the FDA’s standards and guidelines. He said his role in overseeing the process is “not to duplicate the FDA and not to compete with it. But to do what we can to assist.”

Richardson recommends that a company seeking approval for a drug that is ready for sale should take it to the FDA. “If the science is there to support approval for California, it will also be there at the federal level,” Richardson said.

“I wonder whether this isn’t just a storm in a teapot,” said John Groom, president of San Carlos-based Athena Neurosciences, one of hundreds of entrepreneurial high-technology firms in California that many believe hold the keys to the future medical breakthroughs. “There are not that many drugs out there showing that much promise,” he said. Companies like Athena, which show great promise, are “still in the embryonic stage” and years away from seeking human testing, Groom said.

Testing of 70 Drugs OKd

So far, the FDA has approved human testing for about 40 AIDS-fighting drugs and 30 more that are designed to battle AIDS-related diseases, such as the infections that AIDS patients typically develop.

The only drug allowed for sale to fight AIDS is AZT. The human trials involving AZT were interrupted after the drug had shown such a dramatic effect in prolonging the lives of AIDS patients.

Like AZT, all AIDS-related drugs are given the FDA’s highest priority rating and the agency claims to give approval or rejection for testing of AIDS drugs now within five days, a spokesman said.

One high-profile drug that has thus far been rejected is ribavirin, a drug developed by Costa Mesa-based ICN Pharmaceuticals.

Often disparagingly called the “drug in search of a disease,” ribavirin has been approved overseas for everything from herpes and the flu to chicken pox and measles. Many AIDS sufferers travel to Mexico, where the drug can be purchased without prescription, and smuggle it back into the U.S.

ICN has been particularly critical of the FDA’s procedures and timetable and has gained the backing of many AIDS support organizations, if not the scientific community.

A Prime Candidate

The company is routinely pointed to as a prime candidate for the California approval process. A company spokesman said ICN plans to file an application for clinical testing.

Dr. Mervyn Silverman, president of the American Foundation for AIDS Research, said, “The FDA has moved much faster on AIDS” than on drugs for other diseases. The Pharmaceutical Manufacturers Assn., an industry trade group, estimates that on average it costs $125 million and takes 10 years to get a new drug from laboratory to market.

One FDA official, who asked that his name not be used, said, “Our record on AIDS drugs has been pretty good . . . the best of any disease in agency history.” This official added: “Plenty of people have a legitimate beef against the agency on other drugs. But on AIDS, it just ain’t so.”

Still, physicians working with AIDS patients say that may not be good enough.

Dr. Marcus Conant, head of the state’s AIDS Task Force, said the unique

Hopes for ‘Partnership’

He said he hopes that the state department of health will work “in a partnership with the private sector” to design experiments that would satisfy the government.

Since the bill was signed into law by Gov. George Deukmejian last week, Conant said, he has been contacted by researchers who have been turned down by the FDA but are encouraged to try again with the state government.

Companies outside the state, Conat said, have contacted him to say they are seeking ways to collaborate with California companies in an effort to qualify for exemption from FDA.

So far, two companies have submitted proposals to the state health department for human testing of drugs, Richardson said. But he would not name them because the information is considered a trade secret.

One of those proposals is believed to come from Dr. Jonas Salk, the father of the oral polio vaccine and an active backer of the new state legislation. Salk, president of San Diego-based Immune Research Corp., could not be reached.

But even if the state does not ultimately approve any drugs for testing or use, the law may serve some function in the fight against AIDS.

“This is a demonstration . . . a signal to the FDA,” said Silverman of the AIDS research foundation. “It may motivate the FDA to move even more quickly.”