FDA Extends Review of Multiple Sclerosis Pill

The Food and Drug Administration has extended Merck's priority review of the drug cladribine, a sphingosine 1-phosphate receptor modulator, by three months to examine additional information on the product.  The FDA's decision puts Merck further behind in the race to provide MS patients in the United States with a first-line oral treatment for relapsing forms of multiple sclerosis.

In MS, the immune system damages the covering that protects nerve fibers in the central nervous system (CNS), which includes the brain and spinal cord. Sphingosine 1-phosphate receptor (S1PR) modulators  reduce the immune system's attack on the CNS by retaining certain white blood cells (lymphocytes) in the lymph nodes. This prevents the white blood cells from reaching the CNS, where they could potentially attack the protective covering around the nerve fibers, resulting in less inflammatory damage to the nerve cells. The white blood cell retention is reversible if treatment is stopped.


European regulators rejected cladribine in September, saying the drug's benefits didn't outweigh the risks.  U.S. regulators didn't request more clinical trials, and  Merck representatives declined to elaborate on what additional information the FDA is reviewing.   The FDA had originally granted cladribine a priority review in July, shortening the standard 10 month review period to six months.  Based on this request for additional information, the FDA review is expected to now end on February 28, 2011.

Health insurers will soon be required to spend a specific amount of premium dollars on health care

Insurance has traditionally been regulated at the state level. When health insurers sell policies, they charge premiums. The share of premiums NOT paid out on health care claims goes towards administrative expenses, marketing costs and profits. The share of premiums paid out is termed "medical loss ratio." 

State imposed medical loss ratios vary widely. North Dakota currently requires a 55% medical loss ratio, New Jersey requires an 80% ratio. Medicare maintains a loss ratio of 97-98%.

Beginning in 2011, the Affordable Care Act will require health insurance companies to spend a minimum percentage of the premiums they collect on services and quality improvement activities for the people they insure and the Act creates a federal minimum medical loss ratio for all insurers.

Health insurers predict this new mandate will drive insurers out of business.  The argue overly stringent ratios will stifle innovation and eliminate quality measures.  Proponents believe the legislation will improve quality of care & keep premiums low by limiting administrative spending and improving transparency.

Beginning in 2011, insurers will have to report their 2010 ratio & adjust internal practices accordingly. By 2012, if a medical loss ratio exceeds the federal standard, insurers will be required to rebate policyholders.  If an insurer fails to meet the ratio for three consecutive years, they could be banned from signing up new customers. If the problem continues for 5 years, HHS could terminate the contract for the health plan in question.

HHS Secretary Sebelius recognizes the potential for "unintended consequences" arising from the new rules but assures both sides that her office will work to ensure a smooth transition to 2014, when state exchanges will guarantee insurance coverage.