A Food and Drug Administration advisory panel voted Tuesday to recommend approval of a new drug-coated stent, dubbed Cypher, made by Johnson & Johnson ( JNJ). Stents -- which resemble wire-mesh tubes -- are used to keep arteries open after angioplasty. Cypher is an innovation to this technology that adds a drug coating to the stent, which is designed to halt cell growth and prevent restenosis, or reclogging of the arteries. As many as 30% of patients who have ordinary stents installed must undergo further surgery within a year to clear reclogged arteries. Wall Street analysts believe that FDA approval of drug-coated stents could double sales for the devices to $5 billion in the next few years. Johnson & Johnson took its first big step toward getting Cypher approved Wednesday night when the FDA's Circulatory Systems Devices Panel gave the drug-coated stent a thumbs-up after a day's worth of discussion and review. The positive recommendation will now be forwarded to the full FDA, which is expected to render a decision late this year or early next year. The full FDA usually -- although not always -- follows the panel recommendation. While positive, Wednesday's panel meeting was not without some bumps. In a surprising disclosure, the FDA issued a deficiency letter to Johnson & Johnson, regarding Cypher, on Sept 18. Details of the letter were not disclosed, although company officials said issues were resolved earlier this week. It's not clear what impact these apparent FDA concerns will have on their decision to approve the Cypher stents. Johnson & Johnson shares closed Tuesday down 2% to $59.82.
Efforts by insurers to negotiate higher discounts or rebates on specialty pharmaceutical products isn't keeping pace with the price increases pushed through by drug and biotech companies, an analyst says.