It’s Time to Change CDER Funding

I did some crunching of FDA budget numbers for my column earlier this week on the Office of Regulatory Affairs (ORA). A by-product of my efforts was an analysis of how the Center for Drug Evaluation and Research (CDER) is funded.

As most readers know, bio-pharma companies pay user fees, based on activities (such as submitting a New Drug Application) and on the number of their manufacturing facilities. The amounts are set by law. As part of the arrangement, FDA agrees to certain performance goals, which are also specified in law.

We often hear how dependent CDER is on user fees. The actual numbers are startling and deserve to be well-aired.

In FY 09, CDER received $413 million dollars, of which $111 million goes to ORA for inspections and enforcement. The remaining $302 million is the appropriated amount available for CDER to fulfill its responsibilities. User fees add another $357 million.

Of CDER's $660 million, 45% comes from appropriations and 55% comes from user fees. The split is similar for employees. Nearly 1300 employees are paid from appropriated monies; 1500 employees are paid from user fee funds.

I do not believe that user fees are corrupting, as some have alleged. The oft-heard insinuation that user fees put FDA "in the pocket of industry" is nonsense.

Nonetheless, the appearance is terrible. Everyone in the FDA stakeholder community agrees—patient groups, companies, consumer groups and associations. No one favors more drug user fees…and most would like to roll back or eliminate them in favor of all-public funding. Is this possible?

The current drug user fee program (PDUFA IV) was signed into law on September 27, 2007 and covers five fiscal years. Although Congress won't act to renew the program before 2012, the FDA will be starting its public hearing process in the first quarter of 2010. This is the first step in creating FDA's legislative proposal for PDUFA V.

This seems like a perfect opportunity to build momentum for a rollback of user fees, leading to a much smaller PDUFA V. Except that it will never happen that way.

FDA won't recommend, and industry won't agree to, a smaller user fee program….unless they are assured that the same amount of funds will be replaced by appropriations. Additional appropriated funds above that level would be even better, since CDER has a lot of needs.

That brings the potential for a smaller user fee program back to Congress. It won't be simple. The user fee programs are authorized by the House Energy and Commerce Committee and the Senate HELP Committee. They will determine the size and scope of PDUFA V.

However, the House and Senate Appropriations committees control the amounts of user fees to be collected and made available to the FDA. If there is to be a larger, offsetting appropriation to replace some user fees, these committees will have the find the money.

A smaller PDUFA V could only happen if House E&C Chair Henry Waxman and House Appropriations subcommittee Chair Rosa DeLauro agree. Likewise, Senate HELP Chair Tom Harkin would have to reach agreement with Senate Appropriations subcommittee chair Herb Kohl to implement a smaller user fee program. The Senate may be easier, since Senator Harkin is the #2 Democrat on Senator Kohl's subcommittee.

One person can cut through all of this and lead the way to a smaller user fee program. When President Obama submits his FY 2011 budget to Congress next February, he could include additional appropriated funds to reduce CDER's reliance on user fees. A good start would be to get the proportion of user fees below 50% of CDER funding.

I wouldn't bet on this happening…..but I can dream, can't I?

Steven

The Uncrowned Prince of FDA

Which FDA line manager has the most appropriated resources to work with in FY 09? Is it Janet Woodcock, head of the drug center or Stephen Sundlof, head of the food center? The correct answer: neither.

The person with the most resources is Michael Chappell, Acting Associate Commissioner for Regulatory Affairs. In FY 09, he had primary responsibility for about $700 million, 1/3 of the agency's appropriation. He also had management responsibility for 3700 individuals, more than 40% of the agency's appropriated workforce. He is the uncrowned prince of FDA.

Few people know his name or much about the operational entity known as the Office of Regulatory Affairs (ORA). The Office's funding is tucked into each center's appropriation under the unremarkable line item: field. ORA does not even rate a link on the FDA home page. A description of ORA is two levels down:

The FDA's Office of Regulatory Affairs is the lead office for all FDA Field activities as well as providing FDA leadership on imports, inspections, and enforcement policy.  ORA supports the five FDA Product Centers by inspecting regulated products and manufacturers, conducting sample analysis on regulated products, and reviewing imported products offered for entry into the United States.  ORA also develops FDA-wide policy on compliance and enforcement and executes FDA's Import Strategy and Food Protection Plans.  http://www.fda.gov/AboutFDA/CentersOffices/ORA/default.htm

The relative invisibility of ORA appears to be intentional. For example, when the agency issues a press release about an enforcement action, the relevant center director gets the first quote; ORA is always quoted much further down.

Is ORA's continued low profile a good thing? I don't think so.

Congressional and media attention are increasingly focused on FDA's capacity to perform effective inspections and rigorously enforce the law. The agency's good name and public credibility are tied to success in these areas.

Since the Commissioner has so many roles, she needs someone to be the highly-visible, public face of tough enforcement at FDA. Two decades ago, when I worked at HHS, the Inspector General was a former professor who had become the supervisor of the organized crime units in the FBI's Chicago Office. He was a good, smart man and a friend…but you knew immediately that you didn't want to be a target of one of his investigations. FDA needs someone like him.

Well run, conscientious companies have little to fear. If you run a solid plant operation, import ingredients with care, use lots of system controls, and renew your commitment to pedigree and chain of custody, you are unlikely to be affected by a stronger ORA. If you have an inspections or enforcement problem: cooperate with FDA and correct it quickly.

On the other hand, if you are cutting corners, heedless to consumer and patient risk, or stonewalling the agency, you deserve what you get from ORA, strengthened and visible or not.

Commissioner Hamburg intends to make the agency more scientifically knowledgeable, more innovation-oriented and a more reliable partner in its interactions with industry and other stakeholders. A year from now, she will have little leeway to accomplish these goals if she hasn't taken the necessary steps to increase inspections and strengthen enforcement.

In doing so, it makes sense to take ORA out of the FDA shadows and make it a more visible force.

Steven

Post-script: While controlling a surprisingly large amount of the resources, ORA does not operate alone. Each center works with ORA to jointly develop work plans that direct inspection and enforcement priorities for the next fiscal year. My understanding is that this process is a serious endeavor that consumes an appropriately large amount of staff time and effort.

Fall Scorecard for Follow-on Biologics

The creation of a regulatory pathway for follow-on biologics (FOB) has become a favorite topic of FDA Matters. The substance of the legislation is important and the politics are fascinating. It should get even better this fall.

The House Energy and Commerce Committee and the Senate HELP Committee have both put FOB provisions into their health care reform bills. If the two FOB bills were to be considered in a House-Senate conference on health reform, it would not be hard for conferees to agree on a final version. Yet, for reasons given below, FOB legislation may not become law this year and the current House and Senate provisions may be changed before (or during) conference.

House status. House Energy and Commerce Committee Chairman Henry Waxman has proposed generics-friendly legislation (HR 1427). Fellow Democrat and committee member, Representative Anna Eshoo, has proposed a competing, bio-tech friendly bill (HR 1548). The two have been in a stand-off since introducing their bills in March of this year. With help from Representative Barton, the ranking minority member of the full committee, Eshoo's bill has amassed 142 bi-partisan co-sponsors, about 1/3 of the membership of the full House and far more than the Waxman bill.

An Eshoo amendment was successful during the July health reform mark-up, so FOB is now part of the House health reform package. Her amendment was similar to her original bill, with some changes to make it closer to the Senate compromise bill.

Although the Eshoo amendment has the upper hand, Chairman Waxman still has options. It is possible that FOB's will not emerge from the melding of the three different House committee versions of health reform. House leadership may help him keep FOB out of the final legislation when it is considered by the House. Perhaps there will be changes in the Senate bill, allowing more room for compromises in the House-Senate conference committee.

Senate status. On the Senate side, the HELP committee put a two-year old bipartisan FOB compromise into its health reform bill. As noted, it is much closer to the Eshoo position than to Waxman. However, the HELP-passed version of FOB may not be the final word in the Senate.

Senator Schumer has introduced the Waxman bill in the Senate (S 726). His bill (and its seven bi-partisan co-sponsors) assures that the HELP bill will not move forward without visible dissent on FOB. The HELP version is also subject to modification when the Senate Finance and Senate HELP committees merge their two versions of health reform.

The health reform factor. Without enactment of health reform, the Eshoo bill and the Senate compromise bill may be dead for this year and, maybe, for this Congress. Short of an equally-compelling, must-pass health vehicle, Chairman Waxman, as chairman, is unlikely to give Representative Eshoo a second chance to offer her FOB amendment. Without passage of health reform, any future House action on FOB is likely to require Waxman's input.

The Senate situation is likely to be similar. If FOB is not in the final health reform bill, then it will be difficult to sustain the Senate FOB compromise version, especially without Senator Ted Kennedy to advocate for it.

The fate of FOB also becomes uncertain if the health reform bills are substantially narrowed in scope. For example, if the final legislation focuses on insurance reform, then FOB might not be in it.

FOB: the substance is important and the politics are fascinating. Stay tuned!

Steven

Prior columns on follow-on biologics:

Health Reform and Follow-on Biologics September 6th, 2009

The Best Little Chess Game in Town August 3rd, 2009

Follow-on Biologics and the Dance of Legislation July 5th, 2009

The Follow-on Biologics Market June 23rd, 2009

Off-Label Promotion and Whistleblowing

Whistleblowing and off-label promotion of drugs and devices have become hot topics because of the September 2 Pfizer settlement with the federal government. For those who were on vacation: Pfizer is paying $2.3 billion to settle criminal and civil complaints dealing with its marketing and sales practices on four drugs. They have also had to accept a stringent corporate integrity agreement with regard to pre-review and audit of its future marketing and sales activities.

While none of my views are specific to Pfizer, the company's settlement provides an opportunity to comment on off-label promotion….and to encourage bio-pharma and medical device companies to engage in deeper soul-searching.

Marketing departments should be able to do better. Even if the clinical trial data is ambiguous, FDA is usually precise in the indications it approves. That limits the scope of claims that can be made by a company. The FDA's promotion rules are far from perfect, but they are clear on most points. For virtually all medical products, it should not be hard for the sponsor to identify promotional claims and activities that are permitted.

Product marketing is a centralized function that requires employees to work together to develop programs and oversee initiatives. It is not an ad-hoc activity. I assume there are multiple sign-offs before any action is taken. Why are these safeguards failing? When things go wrong--which happens remarkably often--is it because everyone in the marketing department is drinking the same fatal Kool-Aid that sales are more important than laws and profits larger than penalties?

Sales practices are harder to control and will always leave companies vulnerable. I have often observed that there are three types of people: those who are shy, those who get over being shy, and salesmen. Medical products companies train sales staffs rigorously, re-train them often, and make them sign documents that attest to their knowledge of the marketing and sales restrictions on bio-pharmaceuticals and medical devices.

However, tens of thousands of sales reps have millions of interactions with prescribers. No matter how well trained and cautioned they are…there will be days when some reps cannot restrain their "inner salesman." How do you guard against that?

Whistleblowers serve a societal function that might not be served any other way. This is painful for me to admit, since I believe so strongly in working within an organization to make things right. I worry that "running to Uncle Sam" might be perceived as a better option than having a candid and concerned conversation with your boss.

However, in many situations, there may be no other way to document certain types of corporate wrong-doing. For that reason, whistleblowing and the resulting qui tam lawsuits are encouraged as a matter of public policy.

My conclusion: it is difficult for bio-pharma and medical device companies to conduct business in a way that makes whistleblowing unnecessary. Nonetheless, FDA-regulated industry can do better than they are presently. We should expect medical product companies to serve patients, prescribers, and shareholders without breaking the law. For those who think the promotion rules are illogical or counterproductive, the remedy is to work for policy changes, not to ignore FDA rules.

I believe that leaders and staff of medical products companies are well-meaning and committed to improving the health of patients. It is detrimental to see off-label promotional activities that can be interpreted as blatant bad faith.

Am I missing factors that might lead to a different conclusion? I encourage readers to post constructive comments to set me straight.

Steven

Notes on the news:

• My September 6^th comments on President Obama's options leading into tonight's speech to Congress on health care reform and how that might affect FDA: http://www.fdamatters.com/?p=471
  
• Senator Dodd has decided not to take the HELP chairmanship. Here are my August 30^th comments on the other contenders and the trade-offs involved: http://www.fdamatters.com/?p=459
  

Health Reform and Follow-on Biologics

When FDA stakeholders discuss health reform, they usually focus on finance rather than regulation. They have strong interests in Medicaid rebates, formularies, adequate reimbursement to support innovation, and who is for/against the President's plan. None of these finance issues affects FDA, although they will certainly have an impact on FDA-regulated industries.

Less often discussed in this larger debate is that some health reform bills include provisions that would alter or expand FDA's responsibilities. The best known and most far-reaching provision would create a regulatory pathway for follow-on biologics (FOB). The fate of FOB, as well as other FDA provisions in the House Energy and Commerce and Senate HELP bills, will be determined by how health reform unfolds this fall.

This Wednesday night (September 9), the President will address Congress, hoping to create a working majority for a set of initiatives that will add up to health reform.

The President has several options. He can find a way to pull together Democratic ranks by bridging liberal and conservative demands. He can warn Democrats of the potential political consequences if they can't pass health reform. These seem to be his likely direction based on this morning's New York Times.

Alternatively or in addition, he can add in a "game-changer," a new proposal that shifts alliances. Former Senator Bill Bradley suggested one yesterday in a NY Times opinion editorial: medical malpractice and tort reform. Arguably, this would appeal to some Republicans and conservative Democrats and expand and intensify support from within the medical and hospital communities.

Finally, he can narrow the scope of health reform, accepting that some steps toward his goals are better than none. Artfully played, this can be turned into a victory rather than a defeat.

The fate of FOB legislation depends on whether President Obama chooses a successful strategy in his speech to Congress and, ultimately, can guide health care reform into law.

Without enactment of health reform, the biotech industry-backed FOB legislation must be considered dead for this year and, maybe, for this Congress. Short of an equally-compelling, must-pass health vehicle, House Energy and Commerce Committee Chairman Henry Waxman will not give Representative Anna Eshoo a second chance to offer her amendment on follow-on biologics. Any future action on FOB will require Waxman's imprimatur.

The Senate situation is likely to be much the same. If FOB is not in the final health reform bill, the likelihood of reviving the Senate FOB compromise--without Senator Ted Kennedy--must be considered slim.

The fate of FOB becomes uncertain if the President calls for narrowing the scope of health reform. Presumably, a slimmed-down health reform bill will be tailored to be in budgetary balance and to provoke minimal controversy. It might be hard to argue that the reform package requires the quite modest cost savings associated with FOB. Further, with AARP and Congressman Waxman as opponents, FOB will probably not be considered non-controversial.

If a large part of the biotechnology industry is rooting for President Obama on Wednesday night, it should be no surprise.

Steven

Prior columns on follow-on biologics (FOB):

The Best Little Chess Game in Town

August 3rd, 2009

One of the reigning champions of political chess, Representative Henry Waxman, has found himself in an endgame on follow-on biologics (FOB). His three decades of success have been built on extraordinary mastery of Congressional procedure, artful compromise and strategic alliances. His defeat seems unavoidable, but no one should assume that he can't yet win or draw this game. Read the rest of this entry »

Follow-on Biologics and the Dance of Legislation

July 5th, 2009

Political scientists love to watch the dance of legislation. FDA watchers are eager to see how thorny agency issues will be decided by Congress. Both will be fascinated by the latest moves and turns in Congressional consideration of legislation on follow-on biologics (FOB).

I can't recollect an instance in which a House chairman faced such massive bipartisan opposition. But never count House Energy and Commerce (E&C) Committee Chairman Henry Waxman out. He has made a career of not having enough votes… and winning, anyway. Read the rest of this entry »

The Follow-on Biologics Market

June 23rd, 2009

Since the debate began several years ago, the policy and politics of follow-on biologics (FOB) have been driven by assumptions and projections of the anticipated market. In my opinion, there has been a lot of fuzzy thinking about what type of companies will be players and how they will position themselves. The Federal Trade Commission report, released last week, is just the latest illustration. Read the rest of this entry »

In Praise of Predictability

FDA has always found it challenging to make its actions predictable. This problem will worsen for a number of months while Dr. Hamburg redefines the agency's mission, policies, actions and working assumptions. Once this has been accomplished, the agency will become dramatically more predictable to stakeholders, including Congress.

I have written how Drs. Hamburg and Sharfstein's public health backgrounds make them different from their predecessor over the last 35 years--who were mostly researchers, teachers and clinicians from academic health centers. "Public health" as practiced in a big city health department has a gritty immediacy that shapes every activity. In contrast, academic health centers are devoted to providing clinical services to patients and educating students and house staff. Public health is a valuable by-product, but rarely a primary mission.

"Predictability" also means something different in city government than it does at a university. Public health departments are on the frontlines for all public health decisions--from the availability of flu vaccine to monitoring restaurants for sanitary conditions. Leadership must persevere in the chaotic environment of a big city. Every day brings unpredictable events generated by external forces. Success is achieved by having a tight organizational structure and "standard operating procedures" (SOPs) that cover nearly every potential challenge. In most situations, employees, stakeholders, mayors, and councilmen know what to expect. .

Unpredictable external events play a much smaller role in the life of an academic medical center. The combination of a medical school, a teaching hospital, and biomedical research labs is considered one of the most complex systems in our society. Leadership is more inwardly focused, trying to make the different components work together….and work well. Organizational predictability almost always take a backseat to people management, work flow and revenue generation.

My point is that Drs. Hamburg and Sharfstein have been schooled in the value of creating predictability. Generally speaking, their predecessors were not.

Predictability is in short supply at FDA currently--because the new leadership team is identifying the agency's internal and external problems and constructing appropriate solutions. The "new normal" that eventually emerges will be: more focused in the face of a broadening mission; more committed to serious enforcement; and more dedicated to innovation that is consistent with public health and science.

In the process, agency policies and actions will be increasingly based on SOPs, public and industry guidances, and clear articulation of scientific and legal positions. These will be implemented by a larger, tighter organization that will be more consistent in its decisions.

Although some of this evolution will be painful for FDA-regulated industries….they will eventually benefit from greater predictability and less ad hoc decisionmaking at FDA. And all stakeholders benefit from the increased public credibility that FDA will earn when its decisions are easier to understand, better grounded in science and public health and more predictable.

Steven

After Kennedy, Who Will Lead the Senate HELP Committee?

We mourn the passing of Senator Kennedy. He had something others admire, but can rarely duplicate. He was--often simultaneously—a formidable ideologue and the first to create a bipartisan bridge over troubled Senate waters. The health reform debate has suffered greatly from the absence of his commanding personality and his sense of how to make a deal (and make it stick).

Sadly, we are already involved in the game of guessing who will be the new chairman of the Senate Health, Education, Labor and Pension (HELP) Committee. I have also started to think about the possible impact on the FDA.

No one knows who will be the new chairman, despite a lot of instant analysis. Seniority on the committee is fixed, but every potential successor would have to give up something important.

Senator Chris Dodd has "right of first refusal" and has enjoyed his role leading the HELP committee on health care reform. He would certainly want to be chairman, except he would have to give up his chairmanship of the Senate Banking Committee, of obvious importance to his home state of Connecticut. Facing a very rough re-election campaign, commentators have been divided over whether he benefits from leaving the Banking committee and distancing himself from the near-collapse of the financial industries...or whether he should stay chairman and be the leader on re-regulating them.

Senator Tom Harkin is next in seniority. To take over HELP, he would have to give up the chairmanship of the Senate Agriculture Committee, of obvious importance to his home state of Iowa. He already heads the Appropriations subcommittee responsible for much of the labor and health care programs within the HELP jurisdiction. To have both positions would be incredibly powerful. Some commentators have said that Harkin isn't interested, but the better view is that he will need to assess the political consequences of changing chairmanships.

If Dodd and Harkin say "no," Senator Barbara Mikulski (MD) is next in line. She is also the most senior member of the Democratic Caucus who is not a full committee chair. It is widely assumed that she would happily take over the HELP committee. I think this is right, but at least one commentator has suggested that this might make it more difficult for her to eventually chair the appropriations committee, where she is fifth in seniority.

If this goes past Senator Mikulski, the next most senior member would be Senator Jeff Bingaman (NM), who would have to give up his chairmanship of the Energy and Natural Resources Committee. There are other Senators on the list after that, but the Majority Leader, Senator Harry Reid (NV), might step in first to assure leadership positions for more senior members within the Senate.

Not being discussed at all by commentators is a brokered deal for interim leadership. The chairmanship would then be decided in the next Congress (January 2011).

None of these potential chairs present any problems for FDA. They would all be expected to support the agency. That said, priorities for FDA will eventually change with new leadership of the HELP committee. Before that occurs, the new chair will have to evolve out of Senator Kennedy's enormous shadow and into their own agenda and style. That will happen, but slowly.

Steven

Re-evaluating the Medical Device Approval Process

Earlier this year, a GAO report concluded that many high risk medical devices have not been adequately reviewed. In June, the House Health Subcommittee held the first of what may be a series of hearings on medical devices. The media appears increasingly interested in medical devices and is raising more questions.

All these events are a prelude to FDA and Congress undertaking a major re-evaluation of the product approval process for medical devices. It would be a relief if FDA could diagnose and treat its own medical device problems, leaving the Congress and the media to watch.

Whether FDA acts or Congress makes changes in law, I believe that the overall device approval process will change. Yet, it will still be recognizable to those who have worked with the 1976 Medical Devices Amendments, as further amended in 1990. During the re-evaluation process, every aspect of medical device regulation is going to be scrutinized as never before.

The stakeholders are likely to divide into two camps:

• those who think the system is fine with a few tweaks, and
  

• those who think a substantial set of changes are needed.
  

The final result is likely to be somewhere in between: more than a few tweaks, less than an overhaul.

There are multiple issues to address, such as device classification, post-market studies and surveillance, safety of devices, inspections, etc.

Setting the appropriate level of premarket review for a medical device is likely to be the most contentious issue. Under the Federal Food, Drug and Cosmetics Act (FDC Act), as amended, a device can be considered a class III device if it presents a high risk to patients and society or if it is based on a new technology. Class III devices are required to submit data on safety and efficacy to FDA. The sponsor can only market the product if FDA grants a Premarket Approval (PMA).

The vast majority of devices—including some class III devices--do not have a PMA. Some devices placed in class III under the FDC Act are based on a new technology and may not represent a high risk. In these cases, FDA may down-classify the device to class II, which are devices that represent a moderate risk.

Class II devices generally require a 510(k) Premarket Notification. Under the 510(k) process, a sponsor must show that a device is "substantially equivalent" to a device already marketed. The 510(k) is significantly less rigorous than a PMA and "substantial equivalence" has been broadly interpreted.

In April, the FDA responded to the GAO report by announcing that 25 types of class III medical devices will undergo safety and effectiveness review. After receiving information from sponsors, the agency will evaluate the risk level for each device type. Some of these devices are likely to become class II. Those devices found by the FDA to be of high risk to consumers will be required to submit PMA applications.

This makes me wonder: does FDA currently have the statutory authority to resolve most of the issues that surround the medical device approval process?

If so, FDA should evaluate issues, then act to solve any problems themselves. This would provide better assurances about the safety and effectiveness of medical devices, while avoiding the delays and drama that are inherent in the Congressional process.

This column is dedicated to the memory of Senator Ted Kennedy,

who was a champion of an effective FDA over many decades.

Steven

Public Health Leadership at FDA

Dr. Hamburg and Dr. Sharfstein have a style and approach that is already distinct from their predecessors. One of my earliest columns, two weeks before Dr. Hamburg's swearing in, explored why.

I predicted it would take 6 months for the patterns to be clear. We are halfway there, still evolving, and right on track. Do you agree?

Steven

From May 15, 2009.

The world will soon realize that the new FDA leadership–Dr. Hamburg and Dr. Sharfstein– are cut from an entirely different mold than their predecessors. When Dr. Hamburg is sworn in, she will formally begin an era of public health leadership at the agency. FDA staff and agency stakeholders will eventually come to appreciate that this difference is good for FDA.

It is a perfect time to put the agency in the hands of experienced public health leaders with real world experience. The shift will be both interesting and salutary. Notably, there will be a consistent standard in decisionmaking. The answer to every question and pressing issue will be: we will explore what is right from a public health perspective, and then act accordingly.

FDA staff and agency stakeholders argue for their position by saying they are advancing the public health, while secretly believing that other factors will drive the final decision. It is disarming, then, for the Commissioner to actually treat "public health benefit" as the agency's North Star.  Of course there will be many disputes, but everyone will have to build their rationale on public health grounds, knowing that it is the real basis of decisionmaking.

Several misunderstandings drive concerns about public health leadership at FDA. Public health is about helping people and communities to get healthy and stay healthy. Prevention is preferred because it preserves health, while therapies "only" restore health. Preferring prevention is not the same as being against therapy. Public health is not anti-therapeutic nor could any FDA commissioner be anti-therapeutic.

Public health does not require safety to be an absolute value that cannot be offset by other considerations. Innovation to restore health is just as much a public health value as safety. Dr. Hamburg has affirmed this.

What it means to run a big city health department has also been misunderstood. The imperative to act is immediate and real, but you learn that "what appears to be real" has to be examined before any decisions are made. Nothing you're told can be relied upon until it had been rechecked and sometimes double and triple re-checked. An over-simple example: reports about unsanitary conditions in a restaurant might just be from the eatery across the street that has lost business.

Dr. Hamburg and Dr. Sharfstein have limited track records on FDA issues. This uncertainty breeds anxiety. Six months from now, everyone will see that the agency is being run by steady, pragmatic leaders. Indeed, it is quite difficult to run the public health department of a large city without these virtues.

Hot Town, Summer in the City

Thirty years ago, Washington closed down every August. The heat and humidity were beastly and Congress was gone. Over the intervening years, DC has become a 12-month town, with August one of the busier times.

For FDA, there has been so much August-action that this column had to fit my analysis of two developments: the appointment of the new tobacco center director; and the reorganization of the Commissioner's office.

Appointment of the first Director of the Center for Tobacco Products. In an earlier column (http://www.fdamatters.com/?p=303), I identified the ideal credentials for the new director of the tobacco center:

• broad government experience,
  
• close-up familiarity with FDA,
  
• public health and regulatory perspective, and
  
• the gravitas and presence to handle the heat from Congress and stakeholders.
  

Commissioner Hamburg's choice, Dr. Lawrence Deyton, is a near-perfect match. He is scientifically-grounded, policy savvy, has strong managerial experience and has worked at VA, NIH, HHS and as a staffer in Congress. He is currently the chief public health and environmental hazards officer at the Veterans' Administration.

Based on news accounts, Dr. Deyton has experience with tobacco policy and cessation programs, but it is a very small part of his resume. He had no role in the long effort to create the new Center. None of the stakeholders appear to know him or to have worked with him. All of these are to FDA's advantage and underscore the political shrewdness of the choice.

Passage of the new tobacco law was anti-climactic. The appointment of the new director begins the part that is fresh and exciting. Government regulation of tobacco is finally a reality, with the mandate to turn rhetoric into action.

To Dr. Hamburg, I say "well done." To Dr. Deyton, I say: "never forget the enormity of cigarette-related disease and the need for the strongest possible public health regulations to combat it."

Re-organization of the Commissioner's Office. It is very seductive to imagine that moving boxes around on an organization chart solves problems. It doesn't.

Nonetheless, there is much to ponder in the newly-announced reorganization of the Commissioner's Office. It offers substantive changes that make sense. Here are the three most important:

• Creation of a new Office of Foods, headed by a deputy commissioner for foods. The food center and the veterinary medicine center will report directly to this new office, adding management responsibilities to what was previously a staff function. Creation of the new office ends confusion about who is in charge of food. These changes will take pressure off the commissioner. It creates the optimum structure for making foods more effective within FDA. Ultimately, this may decrease the perceived benefit of creating a separate food agency.
  

• Combining policy and planning with budget. These functions are closely related and need to provide similar visions of FDA's future. Reporting to different people has been an impediment.
  

• Elevating the Office of the Chief Scientist to deputy commissioner status, with more programmatic responsibilities. This provides renewed credibility to the oft-repeated message that FDA needs to elevate its scientific mission. It also increases the responsibilities of Dr. Jesse Goodman, one of the agency's most respected leaders.
  

Although this is still moving boxes around on an organization chart…these changes should make it easier for talented leadership to deliver optimum results. I like it.

Steven

One Disease + Two Concerns = FDA’s Need To Communicate Better and Modernize Standards

Diabetes is like other chronic diseases: matters worsen over time, the ultimate downstream consequences are severe, and patients can affect the course of their disease by careful attention to their health. One difference: diabetics have a valuable, universally available tool: blood glucose monitors and test strips. Larger lessons can be learned by asking: how reliable is that tool?

For more than 11 million Americans, monitors and strips are a central part of everyday life. Frequent readings let diabetics monitor their own situation and adjust diet, behavior and medications. They have all been taught to "live by the numbers."

A few months back, Gardiner Harris of the New York Times broke the story that blood glucose meters are allowed to have a +/- 20% margin of error. He also reported that different meters can produce dramatically different results from the same blood sample.

FDA has recognized the problem and is pushing for changes in international standards for the accuracy of diabetic meters. Failing that, they will probably go through the more lengthy process required by the Administrative Procedures Act. All this is good….and credit goes to Gardiner Harris and FDA leadership.

Meantime, diabetic patients are left to wonder whether their home meters are providing accurate and reliable information.

This concern was compounded by last week's announcement that certain types of strips cannot distinguish between glucose and other sugars. When combined with certain medicines and therapies, these strips may give inaccurately high readings.

FDA's public health advisory covered all the basics nicely: which meters/strips are involved, how FDA reached its conclusion, what patients should do next, etc. It was explicit in its direction to high risk diabetics taking any of the named medications: alert your doctors and decide on a different type of meter and strips.

It was much less helpful for the millions of diabetics who are committed to slowing their disease progression, but are not insulin-dependent or at risk for hypoglycemia (low blood sugar). They are just as dependent on accurate meter readings; except the immediate consequences are less drastic. They would want to know: given that sugars are in lots of products, why is the problem limited to a small number of medications? And: why doesn't dietary intake of non-glucose sugars result in inaccurate meter readings?

Public health advisories need to reflect a broad understanding of the patient audience and their likely questions. I suspect that this advisory missed the concerns of lower risk diabetics because the real public health target was hospitals using home monitors on seriously-ill patients. But the entire public gets the announcement…and diabetics who follow the news are already unsure whether meters and strips are tools or distractions. I assume there were good answers for them, but I couldn't find it in the public health advisory.

There is another point to make. Diabetic meters/strips are constantly being improved, but the standards for accuracy are old and don't reflect progress in computerization, miniaturization, fluid dynamics and bio-chemistry. With this example, FDA should start systematically identifying other drug, device, diagnostic and food standards that are based on old science and need to be modernized.

Neither FDA nor industry will be able to act quickly on updated standards. An FDA list, however, would put industry on notice to get started.

Steven

Gardiner Harris' most recent New York Times story on this issue:

Standards Might Rise On Monitors For Diabetics
July 19, 2009

A Resignation and an Allegation at FDA

Several reporters called me last week to ask if I had heard about Dan Schultz's resignation as head of the Center for Device and Radiological Health (CDRH). Had I also heard about conflict-of-interest (COI) allegations against Janet Woodcock, head of the Center for Drug Evaluation and Research (CDER)? Some of the reporters wanted to connect the two events. They wanted me tell them, pundit-like, what this said about Commissioner Hamburg's approach to integrity in decisionmaking and to allegations of wrong-doing.

I disappointed them.

I see no connections between the Schultz resignation and the leak of the Woodcock allegation. One was between Dr. Hamburg and Dr. Schultz and relates to the best interests of the agency going forward. The other is between an unhappy company and Dr. Woodcock and is being handled, appropriately, by the Inspector General. The Commissioner's role, if any, would come later.

There are other important reasons to think the stories are unrelated. Over the past year, Dr. Schultz has faced a series of attacks on his stewardship of CDRH, including calls for his resignation. Whether innocent or guilty, he has been forced to operate in a beleaguered environment.

We do not know what Dr. Hamburg believes. We are told that the resignation was a joint decision. In any case, it falls within the discretionary authority of the Commissioner. They may have discussed the various charges when they met. More likely, the bulk of the conversation was about whether Dr. Schultz's ability to lead has been compromised….or whether, under the circumstances, he is the right leader for a product area slated for intense review that may become a heated public and Congressional debate.

Dr. Hamburg has said that there will be changes in the leadership team. Several have already occurred. One or two of the departures may be a result of her commitment to high ethical standards. It is more likely that people will be replaced because:

• Dr. Hamburg wants her own team, or
  
• there are policy or personality conflicts, or
  
• she has concerns about FDA being caught up in side-issues and personalities.
  

While there may have been more involved, this last reason is sufficient for Dr. Hamburg to want a change at the top of CDRH.

Dr. Woodcock's situation is totally different. There is a single public complaint made by a company that fears it is losing a high-stakes competition for market entry. They are asking only that she recuse herself in the specific matter in which the two companies are involved.

The Inspector General's investigation of Dr. Woodcock appears to be a routine response to these conflict-of-interest allegations. No one should pre-judge the situation until OIG has completed its report. I would expect Dr. Hamburg to do just that---wait for the report before deciding whether any action is needed.

The Schultz and Woodcock stories are interesting, albeit unfortunate. They are totally unrelated and tell us nothing about Dr. Hamburg's approach to leading FDA.

I am sure we will hear more from Dr. Hamburg on FDA integrity and the FDA decisionmaking process. But that wasn't this past week's story….no matter how hard anyone tried to make it so.

Steven

Transparency at FDA: A Work in Progress

A mantra of the new Administration is that government needs to be transparent. While the goal is laudable, the scope of the task is often ill-defined and everyone has their own ideas about what transparency means. FDA's efforts must be viewed as a work in progress that may stretch over years.

The agency has gotten off to a good start with a transparency task force, chaired by Principal Deputy Commissioner, Dr. Joshua Sharfstein. In an earlier post, I addressed some of the likely outcomes of the task force's work: http://www.fdamatters.com/?p=285.

What I didn't discuss at the time were some key issues the Task Force needs to address. Here are my thoughts:

Information is not transparent if it is available, but can't be found. There are hundreds of thousands of pages of information that are publicly accessible from the FDA website. This number will grow steadily as additional archival documents and newly generated materials are posted.

It can be very hard to find what you want in this mass of information. The new FDA website is an improvement. Yet, the homepages for the FDA and the Centers are too cluttered….and not organized to easily get the link you want. Until the agency home pages deliver information effectively, FDA needs to highlight the search functions on the site.

Information is not transparent if it cannot be accessed in a timely fashion. Freedom of Information Act (FOIA) requests often take months to be settled. Expanding the range and depth of materials on the website will help. Still, FOIA requests should be acknowledged within 10 days and a very high percentage fulfilled within 30 days.

Information is not transparent if it isn't readily available to the media. There is robust coverage of FDA in general circulation and trade publications and in new media (such as this blog). However, veteran FDA reporters, such as Jim Dickinson, tell me that access to agency information and FDA subject matter experts has narrowed considerably over the last 15 to 20 years. FDA needs to remove barriers to access by journalists. For most people on most topics, the media is their source of information on agency activities.

Some of FDA's transparency policies should be based on "lessons learned" by other government agencies. In particular, state governments have already converted to a more open, user-friendly approach. There are dozens of organizations that have comparable amounts of information stretched across hundreds of topics, yet have confronted and conquered the website clutter problem.

Other policies need to recognize FDA's uniqueness. It is a public health agency, a scientific agency and a regulator. It oversees products that represent a quarter of consumer spending. It is a repository of confidential business information with a collective value that probably exceeds $100B. Balancing these proprietary concerns with public health needs is likely to be the most difficult part of the task force's mission and may not be finalized any time soon. While this is being resolved, FDA could improve agency transparency by addressing the three issues I have raised above.

Transparency is a state of mind. It may take considerable time before "open" and "available" become the default choice of federal government agencies. It is certainly not in FDA's cultural or institutional DNA to be transparent. FDA's progress can be measured in days and months, but comprehensive policies may still take years.

Steven

A Busy Year for FDA Legislation

With Congress on August recess, it is time to review and comment upon this year's FDA-related legislation, which seems more far-reaching than usual. Matched with an activist agenda from FDA's new leadership team, this could be a watershed year for the FDA.

A new law gives FDA jurisdiction over tobacco products, a massive new responsibility. It will be funded wholly by user fees. FDA is prohibited from using appropriated dollars for any tobacco activity. An announcement of a new center director is expected very soon. I discussed the tobacco center at: http://www.fdamatters.com/?p=303.

Before departing for recess, the Senate passed its version of the FY 10 Agriculture/FDA appropriations bill. Since it is similar to the House version and the President's request, it seems certain that FDA will be getting $295M in additional appropriated funds. For a change, FDA funding should be in place before the new fiscal year starts.

The legislation presages two issues that will need to be addressed during the next two budget cycles:

• ever harder questions about how new monies are contributing to improvements in the public health. FDA is conscious that more scrutiny is coming and expects to be ready.
  
• tension between funding new FDA responsibilities and continuing to strengthen the long-underfunded agency core. My recent column exploring the consequences of "unfunded mandates" imposed on the agency is at: http://www.fdamatters.com/?p=375.
  

Food safety reform is the most likely to pass of the remaining FDA legislation. The House approved its version just before recess. The Senate is likely to respond and final legislation should reach the President within 6 months.

The Congressional Budget Office (CBO) developed an analysis of the House-passed food safety bill. Because the bulk of new mandates are not effective immediately, FDA costs will not increase in FY 10 and FY 11. However, even after subtracting income from new user fees, the cost reaches $368M in FY 12, $749M in FY 13, and about $1B in FY 14.  In short, FDA needs to grow by $1 billion in the next 5 years…just to cover new food responsibilities. Because it illustrates the unfunded mandates problem, I recommend the CBO report to those interested in FDA's future: http://www.cbo.gov/ftpdocs/104xx/doc10478/hr2749.pdf.

Legislation creating a regulatory pathway for follow-on biologics (FOB) is the next most likely to pass, probably as part of health reform. While it produces 10-year net savings for governmental and private insurers, the benefit will not go to FDA. I have heard (but can't verify) that it will cost $300M to set up the new program and about $150M per year for ongoing staffing and other costs. As with food, this is not a reason to oppose (or support) legislation, it is just an ongoing concern. My most recent analysis of FOB politics is at: http://www.fdamatters.com/?p=412.

Congress is again looking at drug reimportation. Although included in the Senate version of the Homeland Security Appropriations bill in July, it is likely to be stripped out in conference with the House. The issue will come up again because there are more than 50 Senators from both parties who favor reimportation. Were it to become law, it would have significant impact on FDA operations and funding.

In addition to FOB, health reform bills include other provision that will impact FDA directly. I will devote a later column to these miscellaneous FDA provisions, as well as some thoughts on how health reform itself might impact FDA.

A watershed year for FDA? It could be.

Steven

The Best Little Chess Game in Town

One of the reigning champions of political chess, Representative Henry Waxman, has found himself in an endgame on follow-on biologics (FOB). His three decades of success have been built on extraordinary mastery of Congressional procedure, artful compromise and strategic alliances. His defeat seems unavoidable, but no one should assume that he can't yet win or draw this game.

His opponents—Representatives Eshoo and Barton, backed by former Representative Greenwood, who is head of the biotechnology trade group, BIO—have also played a masterly game. Their strategy of overwhelming numbers has made them an irresistible force, sufficient to overcome Waxman's mid-game strategy of becoming an immovable object.

The chess game is being fought over the creation of a pathway for regulatory approval of FOBs, biological "copies" that are similar to an innovator drug. While there are dozens of issues, the critical difference between the Waxman and Eshoo bills is how soon FOBs can rely on the clinical data from the innovator, rather than do expensive trials themselves. In Waxman's eyes, the innovator's data exclusivity should be 5 years, while Eshoo and Barton favor at least 12 years.

Interestingly, Waxman's position has grown weaker despite a Democratic president and larger Democratic majorities in Congress. This was not what he expected when he adjourned the game last Fall, expecting to have a stronger position in January.

Instead, Eshoo garnered a remarkable 142 bi-partisan co-sponsors this year, gained a working majority for her bill in the House Energy and Commerce Committee. In the face of this, Waxman's strategy has been to play for time---avoiding a committee vote this year, and then working for a "split the difference" compromise in conference with the Senate on health care reform.

The showdown occurred this past Friday (July 31). An Eshoo amendment was successful, 47 to 11, and FOB is now part of the health reform package in the House. With changes Representative Eshoo made in her language, the House and Senate versions are not much different, and both opt for 12 years of data exclusivity.

Chairman Waxman still has options. It is possible that FOB's will not emerge from the melding of the three different House committee versions. It is possible that the House leadership will help him keep FOBs out of the final legislation when it is considered by the House. Perhaps he and Senator Kennedy (who has wavered in his support for the 12-year exclusivity in the Senate compromise bill) will be able to appoint enough conferees who would support compromising two similar bills into one with fewer years of data exclusivity.

Given the overwhelming support in the House for Eshoo's bill, it would seem that Representative Waxman cannot prevail. However, it is not in the nature of committee chairmen to accept defeat. Henry Waxman is no exception. My advice to the biopharma industry: save any victory celebrations until the chairman has run out of options and concedes the game. It may take longer to get there than you expect.

Steven

PS. I have written twice before on follow-on biologics:

• June 23 on the nature of the FOB marketplace and the failure of the FTC's analysis to capture the market dynamics that will exist 10 years after enactment. It is at: http://www.fdamatters.com/?p=338.
  
• July 5 about the politics of FOBs and predicted a fascinating summer as legislation moved forward. It is at: http://www.fdamatters.com/?p=358.
  

Dr. Hamburg’s Speech to the Alliance for a Stronger FDA

The Alliance for a Stronger FDA is the primary advocate for strengthening FDA through increased appropriations. It is a multi-stakeholder group that represents consumers, patient groups, health professionals, research advocacy organizations, trade associations and companies.

The Alliance was privileged to have Commissioner Hamburg address its quarterly member meeting on July 22.

She thanked the Alliance for the important work it is doing. She paid tribute to the Alliance's success in building consensus among a widely diverse group of stakeholders around increased funding for FDA. She specifically mentioned information technology (IT) as one of the areas where the Alliance has given visibility to an important agency need.

Dr. Hamburg spoke at length about the key challenges facing FDA and her priorities.  

Improving the Public Health. FDA is going to measure success in terms of public health outcomes. Because of the agency's unique and critical mission and historic underfunding, the new approach will explicitly link budget requests to achieving public health goals.

Increasing and Strengthening FDA's Regulatory Science Capacity. FDA needs stronger support for regulatory science and its science base. Investment and improvement must go together in regulatory science. This requires the agency to hire more expert regulatory scientists and collaborate more broadly with the scientific community outside the agency.

Meeting the demands that globalization places on the FDA mission to ensure the safety of food, drugs and devices. Not only must FDA develop a stronger scientific base, but scientific expertise must be available on a global basis.

Implementing the new tobacco regulation.  FDA is currently planning a tobacco center and in the process of hiring 600 staff. No other FDA components will be forced to make cuts as a result of the added tobacco responsibilities.

Creating readiness against a global pandemic. FDA is working on the lab tests, drugs and vaccines needed to respond to H1/NI and other strains of influenza. FDA will need significant resources to be successful because the job is both complex and unpredictable.

Dr. Hamburg made a number of other observations:

• FDA is trying to recreate its capacity to react and prevent crises, but is constrained by resources.
  
• The recent GAO report documenting resource and management problem has the full attention of the agency.
  
• Food safety legislation would help to close the gaps in the current systems and create more preventive controls. This also creates resource concerns, although a safer food supply is a job that must be done.
  
• FDA has to hire a large number of people and this is a lengthy process.  Human resources at FDA is central to putting new resources to work.
  
• FDA must rethink how it is doing many of its activities, including inspections. There is a need for more specialization within a more specialized workforce.
  

Although this is a report on an Alliance meeting, FDA Matters and the Alliance for a Stronger FDA are not affiliated. This blog represents my personal views and insights as a regulatory consultant and long-term FDA watcher. It is a product of my company, HPS Group, LLC.

Steven

DISCLOSURE: I was one of the founders of the Alliance and serve as its Deputy Executive Director. It is a multi-stakeholder group that represents consumers, patient groups, health professionals, research advocacy organizations, trade associations and companies.

If you are concerned about the future of FDA, I urge you or your organization to join the Alliance for a Stronger FDA. Please contact me about membership at sgrossman@StrengthenFDA.org. .

Personalized Medicine in Perspective

We are told that personalized medicine will transform drug development and bring about the end of blockbuster drugs. If you believe the hype, this will all happen soon. More realistically, personalized medicine is at least a decade away from having any substantial impact. Blockbuster drugs are not going to disappear anytime soon.

"Personalized medicine" involves managing a patient's healthcare with therapies based on patient-specific characteristics. It is often defined as part of genomics, although there are and will be non-genomic therapies that fit within personalized medicine. Personalized medicine is seen as individualized treatment and "the future of drug development."

In contrast, most of our current therapeutic options are drugs and biologics intended for large cohorts of patients. This creates a focus on developing "blockbuster drugs" that will be used by hundreds of thousands and even millions of patients. It is said that the rise of personalized medicine will bring an end to "the era of blockbuster drugs."

To understand the status of personalized medicine, it is instructive to look at the history of biotechnology. As with all great transformative achievements, latecomers might imagine that success was inevitable and progress was smooth and relatively trouble-free. The reality has been quite different.

Biotechnology began in confusion, uncertainty and opposition. In 1975, the scientific community gathered at Asilomar, CA to consider the future of biotechnology. They were operating in an environment of apprehension and believed restrictive legislation might be adopted. In part because of principles, guidelines and restrictions adopted at Asilomar, biotechnology lasted just long enough to quell the worst fears that uncontrolled experiments might change the fundamental nature of man, animals and plants.

Here is my history of how biotech developed into a force:

• Rocky childhood (1970's)
  
• Became "the next big thing" (1980's)
  
• Finally had a significant impact (1990's)
  
• Some biotechs mature and big pharma swallows small biotechs for their knowledge, capacity and pipeline (2000's)
  

Notice that there is almost 20 years between childhood and impact. Fortunately for the health of the American people, biotechnology still has plenty of room to grow.

I expect something of a similar pattern for personalized medicine. The movement is, at best, in late childhood. It is not yet the "next big thing," except rhetorically. It will be at least 2020 before more than a handful of products are making an impact….and we can't know whether it will be a significant impact. The death of the blockbuster is at least 10 to 15 years away and may never occur.

One expectation is that genomic information will spur "drug development by design." This will allow the discovery of better drugs more quickly and with many fewer developmental failures. This is a much harder road than it may seem. History shows us that clinical trials can fail, sometimes quite miserably, just when everyone is most sure that the solution is logical and success guaranteed. The human body is almost always more subtle than we can discern, even with the best tools.

Deservedly, there is lots of excitement about personalized medicine. It will eventually transform drug development. However, as you read and listen, remember that:

• excitement is not the same as impact, and
  
• investment is not the same as success.
  

Steven

GAO Hits a Home Run

On July 20, the GAO released its study, "FDA Faces Challenges Meeting Its Growing Medical Product Responsibilities and Should Develop Complete Estimates of its Resource Needs."

FDA's world has changed considerably since the report was requested. Some aspects of the report describe problems that are known and already being addressed. In other important regards, the report is extremely valuable. It will be widely cited and may be instrumental in creating positive changes at FDA.

The GAO started its research using the FY 2008 funding levels as the latest available figures. Subsequently, FDA received a $150M supplemental appropriation in FY 08 and a $325M increase in FY 09. It looks like the agency will get another $295M increase for FY 10. Over this period, the FDA will also have benefitted from a significant increase in user fees.

Therefore, using FY 08 funding levels gives a distorted picture of the FDA situation today.

Further, the new Administration has joined Congress in acknowledging the critical importance of FDA. They have committed to addressing the agency's many management and programmatic needs. When Congress requested the report, it was looking for GAO to build the case for better management, stronger fiscal controls and higher productivity in the medical product area. In 2009, neither FDA nor Congress need to be persuaded.

If increased funding has changed FDA's financial and programmatic situation....and the new Administration is already undertaking management initiatives, why is the GAO report so important?

The report's primary value is that the GAO has:

• developed the issues list,
  
• compiled the data,
  
• done the analysis,
  
• drawn the conclusions and
  
• made the recommendations.
  

They have been thorough in their work. Their views represent neither an ideological Congress nor a self-serving agency. Never mind that Congress has not been ideological in its concerns about FDA management. And that FDA has not done a good job at being self-serving. To the question "who says," there is a better, highly credible answer: "GAO does."

In the process, GAO has boosted some important FDA program needs and inched forward on some more difficult items. For example, FDA needs a major infusion of monies—well beyond what it's getting—to upgrade and disseminate information technology. The agency may not have enough people to review adverse events reports, but merely hiring more people cannot solve this problem. Only an IT solution can make this labor-intensive work more productive and valuable. Also, the report documents the growing demands on the agency from new legislative mandates and the difficulties in retaining staff.

At the same time, GAO "damns" user fees with faint praise about how it has given the agency flexibility and prevented it from falling further behind. In effect, GAO re-raises the difficult issue of public funding versus user fees. Nothing more is needed to start a debate…if someone wants to have one.

In sum, FDA and Congress are already working on many of the issues and recommendations contained in the new report. GAO's credibility and thorough analysis will make these efforts more productive and contribute to a stronger and better FDA.

Steven

The GAO report can be found at: http://www.gao.gov/new.items/d09581.pdf.

Upcoming at FDA Matters

Columns to expect this week and next:

• Update on Follow-on Biologics and the Dance of Legislation
  
• Status of FDA Appropriations
  
• How FDA Could Be Affected by Health Reform Legislation
  
• Exploring the Office of Regulatory Affairs
  

Unfunded Mandates Threaten FDA

FDA is finally moving toward a funding level that will strengthen the agency's core functions. In FY 08 and 09, the agency received more than $600M in new funds. FY10 is on track for another $295M. The FDA can use all this, and more. It is a vast improvement over a string of years where annual increases were closer to $50M, far less than the amount needed to break even with inflation.

With all this good news, there are still a few storm clouds that could rain on FDA's parade. The darkest of those clouds is the threat of unfunded mandates that could result from current Congressional initiatives.

Congress has already passed new tobacco legislation, which will be funded by user fees. Also under consideration are food safety reform (likely), follow-on biologics (probable), and drug reimportation (possible). Each of these three will require funds from FDA's budget.

I don't know how much it will cost to implement food safety legislation or to bring an entire new approval process into existence (follow-on biologics). Both will be expensive. Reimportation is less likely to become law, but will be very costly if we are to preserve a safe drug supply. Commenting on the overall situation, Chairman Waxman has said: FDA should not be set up to fail by being given new responsibilities without new monies for implementation.

The simple but hard question is: will Congress back new FDA responsibilities by giving the agency substantial additional funding? If not, FDA's improved budget situation will evaporate in the face of these unfunded mandates.

If new responsibilities add $250M to FDA's costs and the Agency gets a $300M increase, then that leaves only $50M for strengthening FDA's core programs and responsibilities.  The agency would be back where it was 3 years ago, when it was consistently receiving appropriations that were less than the 6% annual increase in agency costs.

The threat of unfunded mandates is real, but the time for Congress to act has not arrived. The appropriations bills are not supposed to fund legislation before it becomes law.

If any of the proposed legislation passes quickly, then there may be time for House-Senate conferees to add monies into the FY 10 agriculture appropriations bill. More likely, the vehicle would be supplemental appropriations bills for FY10. The first of these is likely to be late this year or the beginning of next year, making the absence of action at this point understandable.

Still, it would be nice to know that authorizers and appropriators appreciate the problem of unfunded mandates and are talking with each other about it. The key chairs--Representatives Waxman and DeLauro and Senators Kennedy and Kohl—need to see the emerging situation as critical to FDA's future.

Otherwise, unfunded mandates threaten and may destroy the successful effort to rebuild and strengthen FDA.

Steven

PS: Two important footnotes:

• I have taken no position on the merits of any of the legislation being considered by Congress. My sole purpose in this column is to make sure that funding keeps up with responsibilities.
  
• The opinions expressed in FDA Matters are my own. However, readers should know about the Alliance for a Stronger FDA, which has been the leading advocate for increased FDA funding. It is a 180-member, multi-stakeholder group that includes patient groups, consumer advocates, health professions organizations, trade associations and companies. It is also backed by three former HHS secretaries and six former FDA commissioners. I am one of the founders and serve as the deputy executive director. For more information about the Alliance, contact me at sgrossman@strengthenfda.org