FDA Funding Prospects Altered by the Budget Control Act

The just-passed Budget Control Act of 2011 (BCA) will have a heavy impact on FDA’s future.  Under this new law, most discretionary spending programs will shrink—not merely cease to grow.  Yet, FDA’s growing responsibilities and resource needs are not diminished because federal spending is being reduced. Our nation is less safe and less healthy if FDA cannot excel at its mission

FDA Matters urges Congress and the President to see that increased funding of FDA is the only option.  Ultimately, the pressures created by the BCA will test the government’s commitment to FDA’s essential role in our society.  

Appropriations Caps and the Impact on FY 12.  The BCA limits discretionary federal spending for every fiscal year from 2012 through 2021. By capping annual appropriations growth, federal spending will be reduced by more than $900 million over 10 years.

For FY 12, the House and Senate appropriations committees cannot spend more than $1.043 trillion. Within this total, the ceiling for non-security programs (e.g. FDA, NIH, education, etc.) is slightly below the FY 11 appropriations level.

The ceiling is also substantially above the level the House has been using to mark up FY 12 bills. This is particularly encouraging because the House-passed Ag/FDA appropriations bill would cut FDA by $285 million below FY 11 (-11.5%) and $572 million below the President’s FY 12 budget request (-21%).

Senate staffs are currently preparing FY 12 appropriations bills using the aggregate spending levels in the BCA. Subcommittee and then full committee mark-ups are expected to start in early to mid-September.  Advocates, notably the Alliance for a Stronger FDA and its members, have been encouraging the Senate to put more money into FDA. The goal is to provide the agency with an increase in its FY 12 appropriation, not merely undo the cuts proposed in the House bill.

FY 13 Appropriations and Beyond.  A second part of the BCA requires a further reduction of the federal deficit by $1.2 trillion over the next 10 years. This can be achieved by any combination of changes in entitlements, revenues and appropriations.  

To pull together this deficit reduction plan, a so-called “super committee” has been appointed. It is composed of 12 members—3 each from the majority and minority parties in the House and the Senate. The group’s work must be completed by November 23, 2011. Any resulting bill will not be amendable and must pass Congress by December 23, 2011. If no legislation passes or the President fails to sign it, then across-the-board cuts (“a sequester”) will occur during  fiscal year 2013, which starts on October 1, 2012.

The general consensus in Washington is that the super committee appointees are too divided ideologically to pull together the needed deficit package. Democrats will only accept entitlement changes if there are new tax revenues. Republicans are pledged to oppose any tax increase.

Predictions of failure may be premature because the super committee will be under intense public and political pressure to find a compromise. In addition, sequester cuts would fall heavily on defense programs that most of Congress supports.

FDA is vulnerable in the “super committee/sequestration” process in two ways.

• If the super committee produces a plan, it may include further cuts in discretionary spending. There is no guarantee that Congress would allocate those cuts in a way that would protect FDA and other essential programs.
• If the super committee does not produce a plan, then the sequester would go into effect in FY 13.  If the entire 10-year $1.2 trillion in savings must be found through sequestration, then FDA is likely to sustain an across-the-board reduction in FY 13 of at least 8% to 10%.

Conclusion. Over the last five years, FDA has been one of few discretionary programs to receive substantial funding increases. This reflected both Congressional and Executive Branch recognition that the agency was dramatically underfunded for its growing responsibilities in an increasingly complex world. FDA still needs more resources, even though the downward budgetary pressures have become significantly greater.

Steven

Imports: FDA Issues a Cry for Help          June 26th, 2011

No challenge to FDA’s mission looms larger than the rapid globalization of the world markets for food, drugs, medical devices and other FDA-regulated products. By way of making this point, on June 20, the FDA released a special report, entitled “Pathway to Global Product Safety and Quality.” FDA Matters read the report carefully and heard a cry for help, if not an actual primal scream. Read the rest of this entry

FDA “Exceptionalism” at the Funding Crossroads       May 2nd, 2011

Congress returns at the beginning of May to start the FY 12 appropriations process. Downward pressure on federal spending will intensify. If, despite this, the FDA receives another increase, then it will move closer to establishing itself as an exception to the budget cutting process. Thus, FDA Matters sees the coming funding battle as a crossroads for FDA.  Read the rest of this entry

People, Not Science, Make Decisions

People constantly make decisions. We choose vanilla instead of chocolate or a job in DC instead of a job in Texas. Can’t decide? Then, maybe, flip a coin.

Yet, the most important decisions—such as FDA approvals--can’t be treated so cavalierly. While scientific evidence and good judgment are necessary to make these choices, people make the decisions.

To FDA Matters, the people making the decisions at FDA are its strength. They are smart, conscientious and committed. Yet, when asked about bottlenecks at FDA, I have to admit that people slow the process down. There are good reasons why this is so.  

FDA lacks sufficient resources.  FDA has been dramatically understaffed for decades. Better funding in recent years has improved the situation, but not nearly enough. Also, it seems like new demands on FDA are increasing faster than staff can be added.

Many FDA employees have overwhelming workloads and inadequate time to refresh their scientific knowledge or broaden their thinking. As a result, higher levels of evidence and “certainty” become necessary to reach decisions. Getting to “yes,” particularly for product approvals, often consumes a great deal more time than telling a sponsor “no” or asking for more information. Hiring more staff would reduce or at least stabilize workloads*.

FDA’s culture promotes intensive scientific discussion.  Objective science-based decisionmaking is a goal, not a reality. People arrive at decisions with a bundle of perceptions and experiences that render their judgment subjective. On the flip side, they probably wouldn’t have much to contribute to the decisionmaking process without those experiences.

This is true for FDA, where agency staff—all with subjective views--interact and struggle to come to a clear decision.  If six or seven well-trained, highly-disciplined FDA scientists examine a pre-clinical or clinical trial, there are certain to be multiple views about the meaning of the data It is a slow path to a consensus, if one can be forged at all.   

Delay can increase further if the agency—as it has in the past—expects a single conclusion to emerge from such staff engagement. One of Commissioner Hamburg notable efforts has been to manage dissent (and let it be expressed in public), rather than always force consensus decision-making.

Science has become more complex and results often unpredictable. Life sciences’ products are increasingly based on cutting edge discoveries. It takes more time, more thought and more knowledge on FDA’s part to make a good decision about them. No sponsor feels good when FDA doesn’t know the science behind their product. Delays are inevitable while FDA catches up.

Medical and scientific information is rarely simple. Sometimes a protocol has a sound hypothesis, great supporting science, and logical inferences from similar studies, etc. It feels like running the clinical trials is merely a formality. …and yet the product ultimately turns out to have little efficacy or unexpected safety problems. Every FDA reviewer knows: assumptions based on early data can often be wrong. Biological complexity can, indeed, lead to surprises.

Conclusion. There is much that can be done to improve the FDA regulatory pathways, particularly for approvals, even though bottlenecks are inevitable.

FDA staff makes the decisions, which is how it should be. As individuals, their decisions cannot be isolated from workload, culture or complexity. Faster is possible, but it is important that people slow the process enough to be sure that decisions are both scientific and sound.

Steven

*   Adding new staff eventually helps. However, it can take upwards of two years for new hires to be trained, integrated, knowledgeable and experienced enough to lessen the workloads of others.

Complexity, Uncertainty, Unpredictability: Not Necessarily Bars to FDA Approvals        July 17th, 2011

In most discussions of science and medicine, there is an implicit assumption that the human body is a machine—complex and biological, but still a machine. If we could only understand all the mechanisms, processes and parts of that machine, then we could prevent and cure disease. Yet, the further we travel into the biology of life, the more complexity we find and the less certainty and predictability.

“The human body as a machine” is a metaphor, not a fact. Once we accept this, FDA Matters believes we can become liberated from unrealistic expectations about medical discovery and FDA’s role as a gatekeeper for new products that benefit patients.  Read the rest of this entry

The State of the FDA—January 2011      January 16th, 2011

FDA’s touches the lives of every American at least 6 to 10 times each day. The agency oversees 80% of the nation’s food supply, all of human/animal medical products and cosmetics, and almost all radiation-emitting devices. Altogether, the agency is responsible for about 20% of all consumer dollars spent in the United States.

With the President set to deliver his State of the Union address to Congress in 10 days, it seemed a good time for FDA Matters to provide its view of the “State of the FDA.” At the beginning of 2011, the agency is doing well, but has a lot of catching-up to do and faces a number of threats. Read the rest of this entry

Medical Device Melodrama: A Great Story With a New Plot Twist

Two years ago, FDA Matters urged FDA and Congress to review the 510(k) approval process for moderate-risk medical devices. It was recognition that medical devices are different and that the review process had not been thoroughly re-examined in two decades.

I imagined tweaks, possibly substantial ones, to the 510(k) process. I also predicted that those working with the current system would be comfortable with the changes. FDA and industry have been proceeding along these lines…until last week when the Institute of Medicine (IOM) declared that the current system is so flawed that a new regulatory framework is needed.  

The FDA and industry discussions are being played out on several fronts: industry proposals, FDA proposals, and negotiations over a five-year extension of the Medical Device User Fee Modernization Act. FDA and industry both think the existing system can be improved.

They have different viewpoints. Industry wants a more predictable process that allows applications for moderate-risk devices to be submitted, reviewed and approved more quickly. FDA admits that evolving requirements and standards may be slowing reviews, but also feels the quality of company submissions is a major impediment to faster reviews.

The medical device industry has played its hand well. At their behest, Congress has sent a message to FDA: go slowly as you revise the medical device approval process, avoid mistakes, and do not create any unintended consequences.

FDA has been deft in its responses. It has talked about changes in abbreviated review processes, has proposed a new speedy “high innovation” review track, and been appropriately attentive to Congressional concerns that the process not be rushed. They have been forthright that user fees will need to increase significantly over the next 5-year period for the agency to meet its growing workload and keep pace with 510(k) reviews.

Industry is reluctant to pay increased fees, given their perception that FDA has failed to meet performance targets in the current user fee program. Industry has suggested that maybe a two-year user-fee reauthorization may be preferable to five-years, giving FDA a chance to implement reforms that would, in turn, justify the increased user fee revenue.

The back and forth discussions between industry and FDA have been heated at times, but always mixing disagreement with civility. That is not to minimize the degree of conflict or occasional harsh words. But by government standards, the two sides are working together well and there is reasonable hope of a satisfactory conclusion that will protect the interests of the American public and stimulate innovation in the medical device industry.

Enter the Institute of Medicine. This branch of the National Academy of Sciences had been commissioned by FDA to study the 510(k) approval process. Its long-awaited report was issued on July 29.

Surprisingly, IOM’s report didn’t provide any insights that would help the negotiating process. Instead, they concluded that: FDA should invest in developing a new regulatory framework to replace the flawed 510(k) medical device clearance process. An effective system could not be built on the current framework.

FDA immediately declared: “FDA believes that the 510(k) process should not be eliminated but we are open to additional proposals and approaches for continued improvement of our device review programs.” Industry, too, has a strong interest in improving, not replacing, the 510(k). They agreed with FDA’s rejection of the IOM report.

FDA and industry will continue working and disagreeing with each other, trying to reach agreement. They now have a common enemy: an IOM that insists that a perfect medical device review system should be created….while FDA and industry know that patching the existing one is the only realistic possibility. 

Steven

All FDA Stakeholders Affected by Medical Device Reforms      October 31st, 2010

There are so many visible, contentious FDA issues right now….that reform of the medical device approval process has received only a fraction of the attention it deserves. Other centers at FDA and non-device stakeholders need to be watching more closely. FDA Matters is. Read the rest of this entry

“No Surprise” That Medical Devices Are Under Scrutiny           October 1st, 2009

Five weeks ago, I wrote a column entitled, “Re-Evaluating the Medical Device Approval Process.” It was not widely-read. I assumed it was because everyone already knew that a review was underway at FDA with more activity coming. Apparently, I was wrong.  Read the rest of this entry

Re-evaluating the Medical Device Approval Process        August 27th, 2009

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. Read the rest of this entry

FDA, Reorganization and the Four Crises

In previous posts, FDA Matters has expressed its disdain for efforts to solve problems by reorganizing government agencies. So, it may be surprising that I am giving Commissioner Hamburg an “A” for her recent reorganization of FDA’s senior management.

In the reorganization, she is addressing four crises that beset the agency: industry discontent with the medical product review process; public concern about import safety; implementation of the Food Safety Modernization Act; and Congressional concerns that the agency is inefficient in its use of resources. The new structure should drive better decisonmaking and greater productivity…. at a time when the agency is struggling to fulfill its growing mission and faces the potential for budget cuts.  

Until the beginning of this year, Dr. Hamburg has relied upon Dr. Joshua Sharfstein, a trusted deputy and alter-ego, to assist in managing the agency. In addition, he had served as a buffer between the agency and external forces, particularly Congress.  Instead of replacing Dr. Sharfstein, the Commissioner has chosen a new organizational approach that responds to the agency’s most difficult challenges:

Crisis #1: Growing discontent among the medical product industries. They allege that unreasonable FDA requirements and the agency’s overly-cautious approach to potential safety issues are keeping innovative and effective products from becoming available to patients. For more details, see my columns at:  http://www.fdamatters.com/?p=1428 and http://www.fdamatters.com/?p=1401.

Response: Create a new Deputy Commissioner for Medical Products and Tobacco and appoint Stephen P. Spielberg, MD., PhD, a distinguished physician and researcher and former dean of Dartmouth Medical School. He also spent 11 years in industry, working for Merck and then J&J.

In his new role, Dr. Spielberg will oversee the Center for Drug Evaluation and Research (CDER), the Center for Biologics Evaluation and Research, the Center for Devices and Radiological Health and the Center for Tobacco Products.

The intent is for him to serve as a “senior partner” to the four center directors, facilitating decisions that might otherwise wait for the Commissioner. When appropriate, he would also stand-in for the Commissioner on their behalf. Right now, these center directors can’t be getting very much of Dr. Hamburg’s time and they are quite vulnerable on the Congressional side.

In addition to the stature he brings, Dr. Spielberg’s bio describes his research interests as: mechanisms of idiosyncratic adverse drug reactions, human pharmacogenetics and personalized medicine, and pediatric clinical pharmacology. This background is germane to the areas of industry concern about pre- and post-market review of medical products and also positions him to be one of the agency’s chief advocates for improvements in regulatory science.

Crisis # 2: The safety and quality of imported food and medical products.  The American people and Congress want safe products and expect FDA to use its very limited resources to make it so. For more details, see my column at: http://www.fdamatters.com/?p=1408.

Response: Create a new Deputy Commissioner for Global Regulatory Operations and Policy and appoint Deborah Autor, now Director of CDER’s Office of Compliance. Her “directorate” will oversee the Office of Regulatory Affairs (ORA) and the Office of International Programs.

The intent is to increase coordination and greatly reduce the number of decisions that would otherwise wait for the Commissioner’s availability. Just as importantly, the new structure brings together FDA’s overseas relationship and capacity-building successes with a tougher, more regulatory posture to assure that imports meet the same standards for safety and quality as domestic goods.

Crisis #3: Implementation of the new Food Safety Modernization Act to create a sophisticated risk-based food safety system. This is a complex multi-faceted task being made more difficult by inadequate funding.

Response: Continue the existing position of Deputy Commissioner for Foods, which oversees the Center for Food Safety and Applied Nutrition and the Center for Veterinary Medicine. Michael Taylor, who will continue in this post, has already demonstrated the advantages of Dr. Hamburg’s new organizational approach….by his general leadership and his representation of the agency with Congress on food issues.

Crisis #4: FDA’s ability to sustain and grow its FY 2011 funding level is being challenged in the Congressional appropriations process.

Response: Create a new Office of Operations, headed by a Chief Operating Officer (COO) to oversee human resources, facilities, information technology and finance. This will strengthen the agency’s ability to respond to Congress on administrative matters and, in particular, assure Congress that the agency is under tight fiscal management.

Conclusion: FDA has many problems, some of which are reaching crisis-proportion. While more resources are necessary, good leadership is essential.

Regardless of the demands, Commissioner Hamburg can never have more than 24 hours each day to address the agency’s needs. The new organizational arrangement—with four deputy commissioners providing span of control over most of the agency--seems well-suited to address this limitation.

Steven

Here is a link to read the Commissioner’s message to agency employees conveying the new organizational structure:  http://carl1anderson.wordpress.com/2011/07/14/major-reorganization-at-fda/.

I would hope in the future that FDA would post these types of communications directly onto the agency website, rather than relying on the Commissioner’s messages to be reprinted in newsletters and blogs.

Is the Human Body Just An Exquisitely Intricate Machine?

In most discussions of science and medicine, there is an implicit assumption that the human body is a machine—complex and biological, but still a machine. If we could only understand all the mechanisms, processes and parts of that machine, then we could prevent and cure disease.  Yet, the further we travel into the biology of life, the more complexity we find and the less certainty and predictability.

“The human body as a machine” is a metaphor, not a fact. Once we accept this, FDA Matters believes we can become liberated from unrealistic expectations about medical discovery and FDA’s role as a gatekeeper for new products that benefit patients.

Medical progress is the direct result of basic and clinical research conducted according to rules of scientific evidence and proof that have been refined over several decades. Our knowledge grows and our methods of discovery improve through our nation’s support for medical research at NIH and regulatory science at FDA, as well as billions invested by industry. 

Even still, we can’t consistently or logically explain why good scientific hypotheses tested in well-controlled trials often produce unimpressive clinical outcomes. Or why some medical products are clearly helpful for some patients in a clinical trial, but of no benefit to other patients who appear indistinguishable in baseline characteristics.  

Researchers, medical products companies and FDA would love to know the answers to these questions. Until we do, we are powerless to explain, predict or prevent the persistent and expensive discovery failures that are frustrating patients (and investors) who are desperate for medical successes.

We imagine the failures come from the imperfection of our knowledge. This is certainly true, but not a complete answer.

For several hundred years, physicists assumed the world was a machine, a so-called clock-work universe. This was logical and worked remarkably well to explain and predict physical phenomena. Then quantum mechanics demonstrated unpredictable, random, counterintuitive outcomes in the physical world. Ultimately, quantum mechanics increased our knowledge of the physical world, but only after its uncertainty and inconstancy became part of the calculations.

Similarly, there is no clock-work biology just waiting for us to discover all the mechanisms, processes and parts. Some complex biological responses may prove to be “explainable” only through unpredictable, random, counterintuitive activity.*

This may be true of individual responses, as well. If each of us has a unique fingerprint and a unique personality, why should it be hard to imagine that we each have our own biology that can never be fully defined or predicted, even if we could identify all the unique machine-like (e.g. genetic) elements?

If the metaphor (man as machine) is incomplete--and some degree of biological response is inherently unpredictable, uncertain, unknowable, as well as individualized—then FDA’s current standards of evidence and proof are not optimum for stimulating medical discovery. Many products that would benefit patients may not reach the market.

FDA Matters believes the FDA understands this is a problem, at least at the senior management level. However, the agency currently lacks the culture or impetus to incorporate complexity, uncertainty and unpredictability into its approaches to approving medical products. Admittedly, it also operates in an environment where it is gently praised for approvals when they occur….and harshly vilified later if an unresolved or unexpected issue (i.e. uncertainty) is a source of clinical problems.

Patients, physicians, researchers and medical products companies want an environment where a higher level of patient benefit can be achieved, even at the cost of a slightly larger degree of uncertainty and unpredictability. FDA needs to accept and act on this challenge or face rising discord with those stakeholders.

Steven

* Note: there is some work specifically on how quantum mechanics may explain certain biological processes, such as photosynthesis, but the analogy here is only that random, unpredictable biological responses play a very large confounding role in biological discovery, even greater than commonly attributed. See also: “Biology faces a quantum leap into the incomprehensible” http://www.guardian.co.uk/science/blog/2010/nov/12/biology-quantum-leap

Earlier columns from FDA Matters that are related:

Post-Market Safety: Getting the Most Out of Inferences That Aren’t Proofs  June 21st, 2011

In the FDA-regulated world, success is often defined as approval of a new product or indication based on two, well-controlled clinical trials. However, the scrutiny doesn’t end there. FDA’s mission includes determining whether already-approved drugs perform safely and effectively when used by large numbers of patients in routine medical practice.

To understand what happens under these “real world conditions,” FDA has expanded its post-market efforts, including development of a monitoring system (called Sentinel) that will be able to track drug usage and medical history information on tens of millions of patients. Although such information will be useful, it can only provide post-hoc inferences, not proof of causation. Even with this limitation, FDA Matters thinks developing the system is worthwhile and may provide multiple benefits. Read the rest of this entry

Scientific Reductionism and the End of Medicine      December 27th, 2009

“For the last 400 years, science has advanced by reductionism … The idea is that you could understand the world, all of nature, by examining smaller and smaller pieces of it. When assembled, the small pieces would explain the whole.” (John Holland)

Have you ever heard someone accused of “reductionist thinking?” You probably will in 2010 because scientific reductionism is a critical, but rarely articulated, foundation of personalized medicine.   Read the rest of this entry

Should FDA Have an Independence Day?

Years ago, while helping an incoming administration evaluate the public health service agencies at HHS, I became captivated by the idea that a series of reorganizations would solve many of the problems. I eventually snapped out of my trance and learned a life-long lesson: redrawing organizational boxes and altering reporting relationships are rarely effective solutions.

FDA Matters thinks that making FDA an independent agency will not make FDA more effective or more efficient. Although the idea is not truly harmful, proposing independent agency status is a seductive distraction from the tough job of improving FDA.    

Making FDA an independent agency has been proposed many times before. The issue has come up now because Jim Greenwood, CEO of the Biotechnology Industry Organization (BIO), included it last week among a number of proposals in his “state of the industry” speech. The industry is to be applauded for its commitment to new thinking, which focuses on ways to stimulate investment in biosciences, as well as improve FDA. While I think there may be some great ideas in BIO’s proposals, an independent FDA is not one of them.

An” independent agency” is a federal government organization that is not located within one of the 15 executive departments.  While most independent agencies are commission-type organizations run by a board, some are structured in a manner similar to the executive departments.  Examples include the Environmental Protection Agency (EPA), the National Aeronautics and Space Administration (NASA), and the National Science Foundation (NSF).

Being independent sounds great, but would it really help FDA become a more effective or better-resourced agency?

Independent agencies do not run independently of the President and the Executive Branch. Whether part of HHS or independent, FDA’s authority derives from the President, its money comes through the Office of Management and Budget (OMB), its manpower is cleared by the Office of Personnel Management (OPM), and its office space and purchases are controlled by the General Services Administration (GSA).

The chief advantage to FDA of being independent would be the ability to by-pass HHS leadership and bureaucracy. While HHS may be a problem, does anyone want to argue that it is so bad that it requires FDA to be uprooted? Historically, it is OMB that has pushed FDA budget requests downward and objected to FDA regulations. That wouldn’t change.

Being an independent agency does not necessarily improve access to the President. Because only heads of executive departments are cabinet members, the HHS secretary currently speaks for FDA when the cabinet meets.  The head of EPA has the status of “cabinet-rank,” along with OMB. I am not sure whether EPA gets much out of this honor, but similar standing for FDA would seem unlikely.  

Being an independent agency does not move an organization to a different appropriations committee. EPA is funded by the Interior, Environment and Related Agencies subcommittee. NASA and NSF are funded by the Commerce, Justice, Science and Related Agencies subcommittee. Independent or not, FDA will be funded as part of the Agriculture appropriations bill.

Independent agencies haven’t necessarily prospered, either. NASA had a good track record while it embodied a national aspiration, but it is clearly on the decline now. The National Science Foundation has never enjoyed the level of support given the National Institutes of Health.

That leaves us, perhaps, EPA as the embodiment of an independent agency with regulatory and scientific responsibilities. Has science triumphed at the agency because its independent status shields it from politics? It seems unlikely that anyone would make that argument. EPA, too, appears to be an agency on the decline.  

Maybe FDA would benefit from being an independent agency, although I don’t think so. At best, it would take enormous political effort to accomplish….energy that could be applied toward more effective ways to improve the agency.

Steven

Jim Greenwood, President and CEO, 2011 BIO STATE OF THE INDUSTRY ADDRESS. “Unleashing the Promise of Biotechnology to Cure Disease and Save Lives”  http://www.bio.org/news/speeches/2011_greenwood_convention_speech.pdf

A more in-depth description of the BIO proposals is at: http://www.bio.org/aboutbio/promiseofbiotech.pdf

List of independent agencies: http://www.usa.gov/Agencies/Federal/Independent.shtml 

Imports: FDA Issues a Cry for Help

No challenge to FDA’s mission looms larger than the rapid globalization of the world markets for food, drugs, medical devices and other FDA-regulated products.  By way of making this point, on June 20, the FDA released a special report, entitled “Pathway to Global Product Safety and Quality.”  

FDA Matters read the report carefully and heard a cry for help, if not an actual primal scream.

The report provides startling statistics on the recent and future growth of imports. A decade ago, 6 million shipments of FDA-regulated goods passed through our nation’s 300 ports; this year the number will quadruple to 24 million shipments.

The impact is across all areas of FDA responsibility. Currently, 60% of fruits and vegetables and 80% of seafood consumed in the US are imported. About 80% of active ingredients found in pharmaceutical products (not finished products) originated abroad. More than 35% of the US medical equipment market is imported devices.

The world is an unsafe place. Despite that, Americans are not going to restrict themselves to seasonal and locally grown food. Nor will we limit ourselves to the drugs and devices that can be developed and manufactured using only ingredients and parts that come from within the US.

We count on FDA to be sure our foods are safe and medical products safe and effective, regardless of origin.  However, imports inspire less confidence because there are hundreds of thousands of products made under local laws and business practices. We have much to be concerned as these numbers continue to grow.  

Even with additional resources, new legal authorities, international cooperation, improved strategies, complex databases and a bunch of good luck…keeping the American people safe will require the agency to invest several times more effort than it has in the recent past.

FDA’s plan is logical and appropriate:

1) FDA, in close partnership with its foreign counterparts, will assemble global coalitions of regulators dedicated to building and strengthening the product safety net around the world.

2) With these coalitions, FDA intends to develop a global data information system and network in which regulators worldwide can regularly and proactively share real-time information and resources across markets.

3) FDA will continue to expand its capabilities in intelligence gathering and use, with an increased focus on risk analytics and thoroughly modernized IT capabilities.

4) FDA will effectively allocate agency resources based on risk, leveraging the combined efforts of government, industry, and public- and private-sector third parties.

In short, FDA’s strategy is: let’s build the food, drug, and device equivalent of Interpol, then “let’s get the bad guys before they get us.”

This seems like a good approach, but it is not enough. In a speech in April, Dr. Murray Lumpkin, Deputy Commissioner for International Programs, referred to FDA-regulated products as coming from “roughly 200 countries, using 825,000 importers through over 300 US ports-of-entry.” How do you possibly manage that?   

I can’t claim to know the answer. Significantly increased funding for import safety is essential. A larger FDA overseas force is necessary to work with other governments and set up international standards. Tougher US laws are needed. We have learned, however, that it is hard to prevent problems when one or two business owners are prepared to willfully neglect standards and heedlessly adulterate food and drug products.

Our only choice is to respect what FDA has accomplished.....and give them the support and funding (and maybe some out-of-the-box ideas) to do an even better job.

Steven

FDA’s Report on Imports: http://www.fda.gov/AboutFDA/CentersOffices/OC/GlobalProductPathway/default.htm

Dr. Lumpkin’s presentation:  Viewing the world through the FDA international lens: Advancing domestic public health through international engagement. Slides from presentation given to membership of the Alliance for a Stronger FDA, April 26, 2011.

Post-Market Safety: Getting the Most Out of Inferences That Aren’t Proofs

In the FDA-regulated world, success is often defined as approval of a new product or indication based on two, well-controlled clinical trials. However, the scrutiny doesn’t end there. FDA’s mission includes determining whether already-approved drugs perform safely and effectively when used by large numbers of patients in routine medical practice. 

To understand what happens under these “real world conditions,” FDA has expanded its post-market  efforts, including development of a monitoring system (called Sentinel) that will be able to track drug usage and medical history information on tens of millions of patients. Although such information will be useful, it can only provide post-hoc inferences, not proof of causation. Even with this limitation, FDA Matters thinks developing the system is worthwhile and may provide multiple benefits. 

There are multiple tools for assessing post-approval safety and efficacy that fit loosely under the rubric of pharmacovigilance. When approving medical products, FDA mostly relies on data that comes from pre-specified hypotheses that are tested through randomized, placebo-controlled, double-blind clinical trials. In contrast, the data that comes from pharmacovigilance is inherently less rigorous; indeed it constitutes a form of “data dredging” that FDA abhors. The heart of the problem is that:  

Real world data sets = uncontrolled variables + inconsistent data collection + questionable data accuracy.

When FDA and manufacturers collect adverse events reports, they know there will be underreporting of incidents, as well as limited ability to judge whether problems are drug-related. When FDA looks at the Medicare database, they know that information submitted as part of medical claims is unreliable and subject to systemic bias (e.g. medical coding is designed to support reimbursement, not public health analysis).

The Sentinel database should be superior because it incorporates medical records and patient registry information, along with claims data. Still it provides inferences, not proof.

Active surveillance—continuously monitoring millions of health records---is only worthwhile if these limitations are acknowledged. It can never provide certainty about whether drugs are safe and effective. It can tell you what is worth further examination…but can never tell you the cause of any problem that is identified.

As the FDA mantra goes: association is not causation. No matter how many health records and claims data are reviewed, this is still true.

Clinical trials have limitations, also. Trials don’t tell us how a drug will be used by prescribers. They can never provide complete information about patient outcomes for those individuals with several medical conditions (i.e. multi-morbidity) or who take many medications simultaneously (i.e. poly-pharmacy).

By inference (although not with certainty), pharmacovigilance and active surveillance could bring us closer to addressing potential problems that can’t be resolved by clinical trials. For example, many years ago, I worked on a drug to treat pre-term labor. As I recollect, there were two instances of respiratory problems in a trial of several hundred women. No one could say for sure whether this effect was caused by the drug or occurred at random. A study large enough to find out was infeasible.

Based on the potential respiratory problem, FDA rejected the drug despite the benefits it might have provided to women experiencing pre-term labor. If this same situation were to come up today…maybe FDA would decide differently, knowing it could collect patient outcomes information through pharmacovigilance, particularly active surveillance.

Ideally, FDA would know everything it needs to know about a drug at the time of its approval. Information derived from review of real world data sets can never be as good. But properly understood and carefully analyzed, the inferences derived from pharmacovigilance can add to our understanding about safety, efficacy, drug interactions and side effects.

Instead of just using that capacity to identify post-approval problems, FDA needs to incorporate pharmacovigilance into its thinking about when to approve drugs and with what conditions. FDA’s capacity to do pharmacovigilance and active surveillance should lead to a greater willingness by FDA to approve drugs, particularly those with otherwise solid benefit-risk equations, but burdened by questions that cannot be resolved prospectively or through clinical trials (even in phase 4).

Patients would benefit if FDA made this one of the Sentinel priorities.

Steven

FDA Appropriations: Good News for FY 11...A Struggle in FY 12

FDA survived the FY 11 (current year) appropriations process with an increase of about $107 million. The agency was the only account in the agriculture appropriations bill that received more money in FY 11 than it did in FY 10. Very few domestic discretionary programs received increases.

FY 12 will be harder. All the “easy” cuts have been made. In the House, the appropriations subcommittees were given very small allocations for programs under their jurisdiction. As a result, the initial House position for FY 12 has included cuts to FDA.

On May 24, 2011, the House Agriculture Appropriations Subcommittee marked up the FY 2012 appropriations bill. The chairman’s mark—adopted by the subcommittee--proposed cutting the FDA’s budget authority (BA) appropriations by $285 million for Fiscal Year 2012 (starts October 1, 2011). This represents an 11.5% cut from the recently passed FY11 Continuing Resolution, which funds the government until September 30, 2011.

This cut represents a significant decrease and would put FDA’s appropriation below its FY10 number and more than $500 million below what the President requested for the agency in FY12.

FDA	FY 10  Final	FY11  Final  CR	FY 12 House Appropr. S/C  May 24, 2011	FY 12 President’s Request—Feb.14, 2011
Budget Authority appropriations  (no user fees)	$ 2.361 billion	$2.457 billion    includes -0.2% across the board cut of $5 million	$ 2.172 billion $285M below FY 11	$2.744 billion

The House appropriation committee’s press release states that the overall cut in the agriculture appropriations bill is 13.4%. FDA’s 11.5% cut is slightly better, on average, than other agencies within the agriculture appropriations jurisdiction. Every area of FDA activity would sustain cutbacks under the House subcommittee bill. (For exact breakdown by Centers, go to: http://fdaalliance.files.wordpress.com/2009/11/fy-12-fda-approps-house-sc-by-center-5-24-11.pdf)

FDA will have about $288 million more in user fee income in FY 12, about the same amount by which budget authority appropriations have been cut. However, user fees are limited in scope and only pay for specific activities. The Alliance for a Stronger FDA does not consider an increase in user fees as justification--or an offset--for decreases in BA appropriations. I agree.

The Alliance for a Stronger FDA’s press release on the House subcommittee mark-up is at: http://strengthenfda.org/media/media-release-may-24-2011/. The Alliance is the only multi-stakeholder group working to increase FDA’s appropriations. Its 180 members represent consumer, patient and health professions’ groups, as well as companies, associations and individuals.

The Alliance will be working hard to restore funding to FDA when the full House Appropriations Committee marks up the subcommittee bill on May 31 or June 1, 2011. While the FDA’s case is strong, the pool of available monies is so small that there probably won’t be any progress at the full committee mark-up.

It is generally assumed the Senate will be more favorable to domestic discretionary programs. However, the situation is unclear.  The Senate is at an impasse with regard to a FY 12 Budget Resolution…and the appropriations subcommittees have not yet been given allocations on how much they can spend.

The Senate may start to move on appropriations bills in June or early July. More likely there will be no action until the House and Senate reach a deal on raising the debt ceiling, which must be done by August 2.

Advocates for more funding for FDA must continue to stress that the agency provides essential services. There is no fallback—no other agency to do FDA’s work--if there are insufficient monies.

Steven

For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA. For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

Lies, Damned Lies and Statistics

FDA’s regulations, policies and actions are multi-faceted and complicated. Oftentimes, it is hard to interpret what the agency is doing and why. We all depend on good analysis to understand where the agency has been and where it is headed. Unfortunately, some of what we read about FDA is poorly reasoned or distorted by the media and others.  

Three recent analyses have particularly troubled FDA Matters. They claimed to draw broad and important conclusions about FDA behavior and were uncritically circulated through mainstream and trade press. Yet, the analyses they offer are unremarkable or misleading.

My first example is a recent analysis from a healthcare research firm analyzing the number of FDA refuse-to-file (RTF) letters over the last dozen years. These involve situations where companies file drug and biological applications for approval and the FDA returns them to the company rather than accepting them for evaluation.

There is a methodological problem: FDA does not disclose RTF’s and traditionally companies have not disclosed them. Thus, any analysis of trend data (“more now, fewer a decade ago) is speculative.

Likewise, not knowing which companies received RTF’s means there is no basis to conclude that RTF’s were previously associated with small, inexperienced firms, but now are being received by larger companies. The shift, we are told, might reflect the agency’s enforcement mentality under the new commissioner. And maybe standards have been raised. A commentator (not the author) even suggests that the alleged uptick may be FDA maneuvering to improve its success rate under the user fee program (while, presumably, returning meritorious applications?).

To its credit, the analysis does mention that “the wave of RTF’s” may be related to FDA’s 21^st Century Review Initiative. One aspect of that initiative is for FDA to weed out applications that are likely to be rejected later in the process. This is more efficient for companies, as well as FDA.

Front-loaded reviews are going to create more RTF’s. This seems obvious, if not unassailable. But trying to embellish this with time/trend data and allusions to changing standards raises issues that have no bearing on the question of whether RTF’s are becoming more important in the review process…and whether this is a good trend.

However, the implication picked up by the media was that increased industry interest in orphan drugs was not being met by increased commitment by FDA to get these drugs approved. But is that really the case? I don’t know and, despite appearances, the numbers don’t answer the question.

Showing same-year data for applications, designations and approvals implies that they relate to each. However, any given year’s orphan drug approvals reflect designations that were made 2 to 6 years previously. The meaning of the surge in the number of designations in 2010 cannot be assessed until we see if there are more orphan drugs approved in a few years.

Lastly, there is this week’s headline that: Biopharmaceutical Product Approvals in the U.S. Rose Dramatically in the 2000’s.” As a result of a Tufts University study, we are told that “during the 2000-09 period, 65 biopharmaceutical products received U.S. marketing, approval, up from 39 in the 1990s and 13 in the 1980.” Media seemed to treat this as a revelation. 

However, there was no biotechnology industry to speak of in 1980 and no products. As chronicled in previous columns (link below), the growth of this new industry has occurred over several decades. Is anyone surprised there were more approvals in the 2000’s?  

These three examples are a reminder that those of who write about and critique the FDA have an obligation to be accurate and not misleading. All of us, including myself, will fail sometimes. The media that report on our analyses rarely check to see if our conclusions are valid or make sense. 

Steven

The first analysis is at: http://portal.leerink.com/IRPDocumentViewer/Web/DocumentViewerCache.aspx?docId=4E2F752B612F6B5646706F3D&pad=52384B6E6E74573478656F45317951416D4B6A506E673D3D&userId=52636261346B39577A34343D

The second analysis is at: http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2011/01/orphan-drug-designations-and-applications-took-off-in-2010-while-orphan-drug-approvals-tapered-off.html

The third analysis is at: http://csdd.tufts.edu/files/uploads/may-june_2011_ir_report_summary.pdf

Forget the Hype: Change Takes Time     March 21st, 2011

FDA Matters is always impressed by how much FDA does. The everyday tasks are overwhelming: reviewing, approving, monitoring and inspecting the products and facilities responsible for 80% of our food supply and 100% of drugs, biologics, medical devices, vaccines, and animal drugs. Then there are the policy issues, big and small, that must be tended to.

These are largely functional tasks—someone has a job (or several) and does them. Yet, FDA has another life, as the bridge to the future of foods, drugs and devices. This responsibility is vitally important to our nation. It also takes time to bear fruit. Read the rest of this entry

FDA “Exceptionalism” at the Funding Crossroads

The 15-month long battle over the nation’s fiscal year (FY) 2011 budget was finally resolved on April 16, just before Congress recessed. Despite broad pressures for program cuts and deficit reduction, the FDA received a $107 million increase, one of the few winners among domestic federal agencies.

Congress returns at the beginning of May to start the FY 12 appropriations process. Downward pressure on federal spending will intensify. If, despite this, the FDA receives another increase, then it will move closer to establishing itself as an exception to the budget cutting process. Thus, FDA Matters sees the coming funding battle as a crossroads for FDA.

There are two primary considerations that drive FDA’s fate in the FY 12 funding battles:

• The US government is in a fiscal situation that can’t be resolved without unpopular actions. There is no avoiding the “iron triangle” of deficit reduction: discretionary spending cuts, entitlement changes and net increases in tax revenues. While there is hope that a comprehensive, multi-year resolution can pass Congress this year, it will still take at least a decade before the deficit crisis is fully behind us.

• FDA has been chronically underfunded for more than 25 years. Congress has chosen to give FDA new responsibilities without commensurate increases in appropriations. Even without these mandates, the FDA has needed to grow because of globalization, increasingly complex science, and significant growth in the industries it oversees. After several years of substantial increases, the agency is in better financial shape, but still resource-restricted in fulfilling its mission.

Advocacy by the Alliance for a Stronger FDA and others (especially Commissioner Hamburg) undoubtedly helped in achieving an increase for FDA this year. Also of significant help to FDA was the half-billion dollars in “saving” that the agriculture appropriations subcommittees derived from lower FY 11 cost estimates for the nearly $7 billion Women’s, Infant and Children (WIC) nutrition program. Behind the scenes, we know that Members of Congress spoke on behalf of FDA’s funding needs.  

The FDA budget, along with the rest of federal spending, is going to be under significant pressure for at least the next 10 years. Surviving the first year is an accomplishment, but not a trend. Nor can it be treated as a sign that FDA will have it easier in the FY 12 funding battles.

Yet, FDA has a strong case for why it should be an exception to budget-cutting. Here are a few of the points that should resonate this year:

Congress is interested in creating more jobs and stimulating the US economy. FDA is part of the solution.  FDA-regulated products represent nearly 25 cents out of every consumer dollar spent in the US.  There are millions of jobs in the food, drug, device and cosmetics industries that FDA oversees. These are also industries that are growing and are major exporters of US products.

Congress is concerned that regulatory agencies, in particular, are an impediment to innovation and the growth of US companies. Yet, all the major trade associations favor increased FDA funding. Every company whose products are regulated by FDA probably wishes for at least a few changes in agency rules and regulations. However, they recognize that no federal regulatory agency is more willing to engage in dialogue and consider changes. Further, industry understands that their problems are likely to get worse, not better, if FDA is underfunded.

Congress wants to protect the health and well-being of the American people. FDA has a unique role in achieving this. If FDA cannot do its job, there is no organization or persons to pick up the slack. No one else can assure that our food is safe. No one else can evaluate the safety and efficacy of drugs, devices, biopharmaceuticals, and vaccines prior to market. The agency also has a unique role in preventing agro-terrorism and developing medical countermeasures that will lessen the casualties from a terrorist attack.

There are many more reasons why FDA should be an exception to Congressional budget-cutting. The main advocate for this cause is the Alliance for a Stronger FDA, the only multi-stakeholder group devoted to increasing the appropriated resources available to FDA. I urge you to contact me and consider joining.  

Steven

For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA. Members include patient and consumer groups, professional societies, research advocacy groups, associations, companies, consultants and individuals. For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

FDA and Its Regulated Industries: A Cornerstone of America’s Economic Future       March 7th, 2011

On March 7, the Alliance for a Stronger FDA released a white paper on the far-reaching and positive economic impact of a strong FDA and the industries it oversees. The report is intended to provide interested parties, including Congress and Executive Branch policymakers, with information on FDA’s role in economic growth. A number of groups–consumers, patient advocates and industry–provided comments to the Alliance on the impact of FDA on the American economy.

When an Investigator Knocks on Your Door

The last Congress was dominated by the economy, health reform and the election campaign. Congressional oversight and investigations (O&I) never gained much traction. So far this year, appropriations and budget have dominated Washington. Not much other work has been done.

FDA Matters thinks this will change soon. Without money to spend on new programs and no interest in legislating new regulations, most committees have little else to do other than O&I.  As a result, FDA and FDA-regulated industries can expect a lot of attention from Congressional investigators. Even without Congressional prodding, FDA, the Department of Justice, and Inspector Generals are likely to be doing more investigations.

Despite what most FDA-regulated companies will tell you, they are not well-prepared to be investigated.  When an investigator knocks on their door, they either pay too little attention or go instantly into crisis mode. Neither is likely to be appropriate or in the company’s best interest.

To find the best response, companies need to understand who’s doing the investigating and how they view the situation.

If you did something that FDA program staff or inspection/enforcements staffs considers “wrong,” then the best response is to admit it forthrightly (if true) and act quickly to undo your mistake or clarify the situation. FDA is more likely to work with you to resolve a problem if they feel you have been cooperative, honest and contrite. It always amazes me how few companies seem to respond this way and instead take a defensive posture.

It is altogether different if you are under investigation by a Congressional Committee or FDA’s Office of Criminal Investigations, the HHS Inspector General, the Department of Justice, or US Attorneys. Generally, their investigators live in a world of black and white, neatly divided between good guys and bad guys.

Unlike program staff and inspectors at FDA, it rarely occurs to these investigators that intent, extraneous events or misunderstandings might provide reasons to temper their judgments. Dealing with such nuances is not part of their job.

I saw the contrast as a legislative staffer in the Senate who also spent time with investigators. My world was painted in shades of gray; their world in black and white.  Most people in FDA-regulated industries are like me. The constant search for bad guys is not part of their jobs or temperament. Few have insight or experience in dealing with investigators with a different world view.

Because Congressional, civil and criminal investigators see the world in blacks and whites, it is never a positive experience to be sitting across the table from them. All company options are likely to be bad, including public humiliation, civil liability and criminal prosecution. Exoneration is a remote possibility, even if you fervently believe you have done nothing wrong.

FDA-regulated companies can (and should) limit their exposure to such situations through systematic preparations. Companies need to be able to review and monitor their own actions at a very granular level. A level of transparency is required that makes most companies nervous. Even more difficult for corporate culture: prompt action to dismiss any employees who violate company rules and any supervisors who looked the other way. No exceptions can be made, even if it includes someone from the executive suites.

Companies that follow this path are less likely to become the target of an investigation. Even if investigated, a company that can document strict programs–prospectively initiated and rigorously enforced—will usually do much better than one promising “never to do it again.” A pre-existing company commitment to tough enforcement may be the only way to get an investigator to consider your alleged wrongdoing in shades of gray, rather than black and white.

Steven

FDA and Election 2010: Oversight and Investigations        November 13th, 2010

President Obama’s election and the distraction of health reform have distracted us from the disruption that divided government imposes on FDA. With the new Republican majority, the agency will find itself buffeted by political forces that are as concerned about "scoring points" as they are about improving government. FDA Matters thinks this will have a large impact on FDA, as well as the agency’s stakeholders. Read the rest of this entry

Will the New Congress Be Good for FDA-Regulated Industries?   December 19th, 2010

FDA Matters is hearing that FDA-regulated industries will benefit from the 2010 election. It is assumed that a Republican-led House and more Republicans in the Senate will benefit drug, device and food companies. After all, aren’t Republicans more business-friendly and more concerned about perceived regulatory excess?

Those saying and thinking these things may be in for a rude awakening. Even worse, they may find themselves nostalgic for the “good old days” (whenever those were). Everybody—FDA, industry, patients and consumers—is going to have a rough time over the next two years. Industry will be heard more often, but not always have the winning position. Read the rest of this entry

Public Incentives and Drug Development: More is Usually Better

A former colleague often declared: life sciences companies have no alternative to re-investing in developing more drugs, biologics and medical devices. I always thought this naïve because of its implication that life sciences research is self-perpetuating and does not need encouragement.  

Currently, Congress seems primed (through oversight and possibly legislation) to consider the role of companies and government in medical product development. This week, FDA Matters explores the nature and need for incentives to conduct life sciences’ research; last week’s column looked at issues surrounding the pricing of medical products.

The government’s goal in incentivizing certain life sciences research is to stimulate activity that meets or resolves societal needs (e.g. drugs and devices for cancers, therapies for rare diseases, treatments for tropical diseases). Idealistically, the incentives encourage vital, new activity without providing subsidies for research that would have occurred without incentives.  

The reality is different. If the rules (statutory or administrative) for receiving incentives are drawn too tightly, then many research projects will not be undertaken, losing the benefits that society would otherwise receive.

To explain this better, I have identified three broad categories of public incentives for research:

Ordinary research incentives. These are the incentives available for all corporate-supported research. These include the research and development (R&D) tax credit, access to government technology transfer programs and patent protection. For most industries, and even most life sciences research, these seem sufficient to stimulate a high-level of research investment.

Upgraded incentives.  Ordinary research incentives are sometimes not enough to stimulate life science research that will benefit society. As a result, Congress has created a number of upgraded incentives for medical product development.

For example, Congress has provided partial patent term restoration for drug companies experiencing particularly long delays in receiving marketing approval. This has led to increased research investment (as well as boosting the generic drug market as part of the same legislation).  

Also, Congress created the Orphan Drug Act to provide incentives for research on drugs for rare diseases/small populations. This law incorporated a number of incentives, notably up to seven years market exclusivity for any new orphan indication on a drug.  

FDA also provides a number of upgraded incentives for particular types of research through its expanded access and accelerated approvals programs. User fee waivers granted to first products from new companies also stimulates research investment.  

Extraordinary incentives.  Sometimes even upgraded incentives aren’t enough to stimulate vitally important research. In those cases, Congress may consider incentives designed to dramatically alter the normal risk/reward/certainty calculation that usually precedes research investments.

Thus far, I can think of only one instance of extraordinary incentives. In 2007, Congress enacted a program that awards a “priority review voucher” for successful development of a new treatment for a neglected tropical disease. Owning a voucher entitles a company to ask for a priority review (6 months) by FDA of an unrelated product that would otherwise be granted a normal review (10 months). Currently, Congress is looking at legislation (S. 606) that would extend this voucher program to developers of products to treat pediatric rare diseases.

It is up to Congress to decide whether to encourage particular life sciences research beyond the ordinary incentives. When upgraded or extraordinary incentives are under consideration, the goal is stimulating substantial additional research....and the development of many new drugs that are particularly beneficial to society.   

In all such situations, there is a risk that incentives will be provided to research that would have occurred anyway. My own experiences suggest that overly tight restrictions on program eligibility result in understimulatoin of needed research. When creating incentives and, also, assessing their impact later, Congress needs to take the broad view of the societal good that can be achieved by upgraded and extraordinary incentives for research.

Steven

Drug Product Pricing 101                 March 26th, 2011

A thousand good deeds of the pharmaceutical and biotechnology industries have been washed away by the decision of K-V Pharmaceuticals to charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. There is an easy comparator: the same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose. Congressional and public reaction has, quite understandably, been one of outrage.

No one knows the right price for this drug, but there are ways to find out. In conversations this week, FDA Matters discovered that many knowledgeable people don’t know that there are tools to rationally evaluate and guide product pricing decisions. Read the rest of this entry

Drug Product Pricing 101

A thousand good deeds of the pharmaceutical and biotechnology industries have been washed away by the decision of K-V Pharmaceuticals to charge $1500 per dose for Makena, a drug that reduces the risk of pre-term delivery in pregnant women. There is an easy comparator: the same therapy has been compounded in pharmacies for years at a cost of $10 to $30 per dose. Congressional and public reaction has, quite understandably, been one of outrage.

No one knows the right price for this drug, but there are ways to find out. In conversations this week, FDA Matters discovered that many knowledgeable people don’t know that there are tools to rationally evaluate and guide product pricing decisions.

Value/pricing analysis helps companies determine an appropriate and defensible price. Some large pharmaceutical and biotech companies have the in-house capacity. Generally, small and medium-sized companies will use external consultants or consulting firms to assure a professional, unbiased process. However, it seems clear that some companies don’t bother to undertake a sophisticated analysis prior to setting prices.

In recommending a particular price or a range of prices, the consultant or consulting firm will look at three or more approaches…and then work with the company to make judgments about “best fit” or achieving consensus among a range of possible prices. Here are three examples of the approaches a consulting firm might use:

·         “Value-added” pricing. This values the company’s product (and supports a price) based on replacement or enhancement of current treatments in the same clinical category. In the case of an asthma drug, a value-added pricing approach would look at “savings” achieved by the reduction in hospital days, emergency room visits, and disability. Other system savings might be considered, such as the benefit of added compliance, the reduction in concomitant drugs, fewer side effects, etc. Any system “costs” (e.g. loss of productivity, treatment of adverse events) are also included in the model.

·         “Cost plus” pricing. This values the company’s product based on the development costs and achieving a reasonable return on investment (ROI).  This may include real, imputed and opportunity costs. Thus, the “cost” component is likely to be greater than the company’s actual expenditures. Pricing in this approach is highly dependent on the ROI variable and the likely timeframe before newer products or generics cut deeply into sales.   

·         “Comparable value” pricing. This looks at the pricing of products that have comparable characteristics or benefits, but may be in different clinical categories than the company’s product. For example, a new recombinant vaccine might be compared to the pricing increment when another vaccine was “upgraded” to a recombinant version. In the case of a unique therapy or breakthrough (e.g. a new drug for Huntington’s disease), an analogy is drawn to the most relevant situations in other treatment areas.

The analytic models are adjusted for a host of variables, such as the size of the potential market, the degree and rate of market penetration, and the likely product lifecycle. As noted, there is usually a consensus-building process where the consultant works with the company to determine a price that factors in the results of the different analyses.

Each consulting firm has its own approach, a proprietary model to distinguish their services from competing firms. These models add value and reach far beyond the basics I have described above.

Now you have an idea of how it’s done….or should be done. This analytic process should reduce objections to the pricing of a product and also prepare a company to defend its pricing decision. Controversy cannot always be avoided, but shareholders, patients, and payers are always going to respond better to companies who have backed their pricing with sound reasoning.

Steven

Disclosure: I am not affiliated with any consulting firm that does pricing analysis, nor is this a service I provide. However, if you are interested in the names of a few firms that are in this business, please contact me by e-mail at sgrossman@fdamatters.com.

Forget the Hype: Change Takes Time

FDA Matters is always impressed by how much FDA does. The everyday tasks are overwhelming: reviewing, approving, monitoring and inspecting the products and facilities responsible for 80% of our food supply and 100% of drugs, biologics, medical devices, vaccines, and animal drugs. Then there are the policy issues, big and small, that must be tended to.

These are largely functional tasks—someone has a job (or several) and does them. Yet, FDA has another life, as the bridge to the future of foods, drugs and devices. This responsibility is vitally important to our nation. It also takes time to bear fruit.

FDA is determined to help develop the fields of personalized medicine, nanotechnology, biomarkers, population-based adverse event tracking, safe use of genetically-modified foods, and regulatory science. By statutory directive, the agency is also helping to develop the fields of generic biologics (formerly bio-similars), medical countermeasures against bio-terrorist threats, and antibiotics for emerging infectious diseases. Advocates usually offer these activities as the rationale for strengthening science at the agency.

There is something more that connects these initiatives--the role of FDA in accelerating public benefits from the increasingly complex science generated by medical and food product companies, academia and federal agencies. There is understandable impatience from stakeholders. While there is a resource issue (more people working on these issues equals faster progress), there is also a rate-limiting aspect--procedural and scientific--to success.

Some have wondered (including me) as to why FDA did not appear more ready to take on generic biologics when the new legislation passed….or why the agency’s subsequent action have exhibited more energy than urgency.

One reason is that FDA has unveiled new complexities of interpretation and implementation each time it has moved forward on generic biologics. Since this is, arguably, the first new approval pathway for medical products in 20 years, perhaps we should all take a deep breath…and acknowledge that a viable program (with regulations, guidances, scientific support and usable precedents) might take four to six years or more to implement. The field itself will be developing for years to come.

Patience is also needed for personalized medicine, biomarkers, antibiotics, etc. At a minimum, we know that clinical trials often fail, sometimes quite miserably, just when everyone is surest that the solution is logical, success is guaranteed and progress is certain. The human body is almost always more complex and subtle than we can discern, even with the best tools.

My yardstick is 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:

·         A rocky childhood, including efforts to restrict or ban experiments (1970′s)

·         The “next big thing,”  with a very limited number of successes (1980′s)

·         Finally a significant impact, but also several “near death” experiences (1990′s)

·         Some biotechs mature and big pharma swallows small biotechs for their knowledge, capacity and pipeline (2000′s)

There was almost 20 years between childhood and impact…and about the same amount of time between initial successes and a track record of success. Nearly forty years later, biotechnology is still as much about promise as it is about accomplishments.

So, forget the hype and re-calibrate your expectation about how fast the future will arrive. FDA is fully committed and only needs sufficient resources to hasten that day. Just as importantly, don’t lessen your own (or your organization’s) commitment to the future. Despite frustrations with the seemingly slow pace of change, the benefits to patients and other stakeholders will come in due time.

Steven

 

Some related columns:

FDA: An Honest Broker on the Slow Path to Biosimilars

October 24th, 2010

FDA Matters’ enthusiasm for biosimilars is a matter of public record. The market will build slowly, but 10 years from now the new law will be seen as ushering in a new age of biopharmaceutical product development. FDA will be satisfied (and successful) if the new law stimulates biosimilars, bio-betters, and innovative new biological products, along with a dramatic increase in knowledge about the nature and characterization of biologic products.  Read the rest of this entry

Long-term Challenges Need Short-term Attention

December 13th, 2009

FDA Matters  sees seven long-term challenges for FDA. Some of these challenges may take years to accomplish; all need to be started now. Three or four years from now, the Commissioner will be judged by whether she moved the agency forward in these areas. I think she has gotten off to a very good start, but there is immense amount of work still required. Read the rest of this entry     

FDA and Its Regulated Industries: A Cornerstone of America's Economic Future

On March 7, the Alliance for a Stronger FDA released a white paper on the far-reaching and positive economic impact of a strong FDA and the industries it oversees.  The report is intended to provide interested parties, including Congress and Executive Branch policymakers, with information on FDA’s role in economic growth. A number of groups--consumers, patient advocates and industry--provided comments to the Alliance on the impact of FDA on the American economy.

“Most policymakers have heard that FDA-regulated industries account for nearly 25% of U.S consumer spending,” said Nancy Bradish Myers, President of the Alliance for a Stronger FDA and President of Catalyst Healthcare Consulting. “However, many have not thought about the major negative economic impact if FDA, the primary regulator of those industries–which employ millions and are net exporters of U.S. products—is not adequately funded by federal dollars.” 

She added: “FDA is a regulatory agency that can help the economy expand. It is one of the reasons that industry, patients and consumers support a strong, appropriately funded FDA that has the resources to assure that our foods are safe and our biopharmaceutical, medical devices and vaccines are safe and effective.”

The Alliance for a Stronger FDA white paper, entitled “The U.S. Food and Drug Administration: A Cornerstone of America’s Economic Future” provides useful information about medical products, the American food supply, and FDA’s role in fighting bio- and agro-terrorism. It also describes some of the advantages of maintaining U.S. leadership role in the global economy and the potential costs to the domestic economy and U.S. exports if FDA falls behind.  

“Food contributes nearly $1.2 trillion to our economy, or 8% of the U.S. gross domestic product. Ensuring the safety of our food supply is as essential as providing for our national defense,” said Caroline Smith DeWaal, an Alliance Board Member and Director of Food Safety at the Center for Science in the Public Interest. “Protecting our food supply is a major part of FDA’s mission, and both the food industry and consumers benefit from a strong FDA and a growing economy.”

“No agency with a critical role like FDA’s should be asked to do more, with less,” said Margaret Anderson, Vice President of the Alliance and Executive Director of FasterCures.  “If we are to advance medical progress and improve patients’ lives--which will significantly bolster the US economy--we need to start making the FDA a national priority.”  

The Alliance’s 180 members--comprised of consumer, patient, professional and research groups, companies, trade associations, and individuals--represent millions of Americans who support increased appropriated funding for FDA.  More information about the Alliance can be found at www.StrengthenFDA.org.

The full report – The U.S. Food and Drug Administration: A Cornerstone of America’s Economic Future -- can be downloaded from the Alliance’s web site.

###

WHAT OTHERS ARE SAYING ABOUT THE IMPACT

OF FDA ON THE AMERICAN ECONOMY

AdvaMed (Advanced Medical Technology Association)

“Everyday, America’s medical technology companies are developing life-saving, life-enhancing advancements in patient care. This progress doesn’t occur in a vacuum. It’s critical to patients, continued innovation and future economic growth that our regulatory processes support the next great leap forward in medical progress. That’s why we support a well-resourced FDA with well-trained reviewers who have appropriate scientific expertise.” Stephen J. Ubl, President and CEO

Alliance for Aging Research

“Over the next 30 years, there will be no greater challenge to the U.S. than dealing with the human and economic consequences of the graying of America.  To improve lives and bend the cost curve of billions of health care dollars, we will need investment and innovation from the medical products industries.  An effective working partnership with the FDA is essential.” Dan Perry, President & CEO

AstraZeneca

“AstraZeneca favors a well-funded and scientifically world-class FDA that has the resources it needs to bring safe, effective and innovative medicines to patients in the United States. Developing and making new medicines available not only helps improve peoples’ health, it helps grow the American economy.” Rich Fante, President, U.S. & CEO North America

Biotechnology Industry Organization (BIO)

“The promise of the life sciences – economic expansion, jobs, and new therapies for unmet medical needs – requires an adequately funded FDA and a strong, reliable regulatory environment.” James C. Greenwood, President & CEO

Center for Science in the Public Interest

“Food contributes nearly $1.2 trillion to our economy, or 8% of the U.S. gross domestic product. Ensuring the safety of our food supply is as essential as providing for our national defense. It is a major part of FDA’s mission. Both the food industry and consumers benefit from a strong FDA and a growing economy.” Caroline Smith DeWaal, Director of Food Safety

FasterCures/The Center for Accelerating Medical Solutions

“No agency with a critical role like FDA’s should be asked to do more, with less. If we are to advance medical progress and improve patients’ lives--which will significantly bolster the US economy--we need to start making the FDA a national priority.” Margaret Anderson, Executive Director

Friends of Cancer Research

“Innovation – in the form of new drugs, vaccines, and medical devices – has vastly improved the health of people around the world and has thus far been a pillar supporting the US economy.  Without further financial investment in the science at FDA, future innovation is put at severe risk.”   Dr. Ellen Sigal, Chair and Founder

Medtronic

"The growth of Medtronic and the medical device industry is truly an American success story. To write the next chapter, we need a business environment that fosters innovation, drives job creation and supports principled collaboration between industry, government and medical professionals.  A strong, fully-funded FDA is vital to creating a more predictable and consistent regulatory system, making it possible for patients to get faster access to novel medical technology." Bill Hawkins, Chairman and CEO

National Research Center for Women and Families

“As public health experts and advocates, we know that Americans depend on a strong FDA to ensure the safety and effectiveness of medical products made by companies that also produce jobs and grow our economy.” Diana Zuckerman, PhD,  President

National Organization for Rare Disorders

"There are innumerable diseases and conditions for which patients are awaiting new therapies. These can only come from viable and vibrant biopharmaceutical and medical devices industries whose investments grow America and move us closer to helping patients with unmet medical needs.” Peter Saltonstall, President

Pharmaceutical Research and Manufacturing Association (PhRMA)

"America’s biopharmaceutical research companies are among the most innovative, research-driven enterprises in the world. Combined, they employ around 650,000 high-skill, high-wage men and women; and, every direct job supports nearly 3.7 additional American jobs. Our industry invests tens of billions annually in research and development. But, without a strong, science-driven, appropriately funded FDA, patients wouldn’t realize any of the benefits of the life-saving and life-enhancing therapies that our companies produce." John J. Castellani, President and CEO.  

FDA Is Fighting on Two Fronts

FDA is still a 20th century agency. It lacks the databases, technologies and tools to do its work. It does not have the depth of manpower to be experts in all the increasingly complex sciences associated with medical products and foods. It lacks the confidence to consistently make decisions based on risk-benefit analysis, rather than leaning toward the highly restrictive Precautionary Principle.

FDA Matters can’t see any downside to the FDA gaining the technology, the manpower and the confidence to transform itself into the 21st century FDA that our nation needs. Yet, Commissioner Hamburg has to fight on two fronts to preserve her ability to make the necessary changes.

The new Congress has a different set of priorities than the previous two. Deficit cutting and government accountability are on everyone’s mind.

Under a House-passed bill that would fund the federal government in Fiscal Year (FY) 11, the FDA would be allotted $241 million below the level at which it was funded in FY 10. Were this to become law, the agency would need to cut new programs, abandon initiatives and probably lay off staff. To reach agreement with the House, the Senate will also have to cut the federal budget, although perhaps not the funds for FDA.

A 21st century FDA requires capacity to meet new challenges. This won’t occur if the FDA’s budget is being cut.

At the same time, Congress is increasing its oversight/investigative activities. Oversight of FDA needs to occur, but it comes at a price. Investigative hearings are a potent reminder to FDA that cautious, risk-adverse decisions are the ones Congress won’t question. Thus, FDA is reinforced in being a 20th Century agency, rather than encouraged to modernize and think more broadly about problem-solving in the 21st century.

Also, there is an ongoing shift from public funding of FDA to industry funding. User fees pay for very specific tasks. Over-reliance on them reduces the flexibility that FDA leadership needs to handle public health challenges, especially modernizing and strengthening the agency.

Prevailing with Congress won’t be easy and must be considered Commissioner Hamburg’s top priority. At the same time, she must deal with growing unhappiness among FDA-regulated medical product companies.

Based on some recent FDA decisions (e.g. on three weight-loss therapies), many in industry believe FDA is erecting an insurmountable wall of trial design and safety requirements, all intended to slow or deny approval for large-population drugs. Yet, the blockbuster drug (rather than personalized medicine) will remain the industry’s primary business model for at least the next 10 years. Further, Americans still need safe and effective drugs that can treat hundreds of thousands of patients.

Similarly, there have been a number of skirmishes about review standards for medical devices. FDA has moved slowly, listened hard and made compromises. However, with some justification, industry still fears that proposed new standards and procedures will be expensive and delay approval of safe and effective medical devices in the US. FDA also finds itself being compared to the European system, where medical devices are approved far more quickly.

Current industry unhappiness might not be such a challenge for the Commissioner, except for its likely impact on user fee negotiations, agency funding, Congressional oversight and the national debate over how to stem the flow of American jobs and capital to Europe and Asia.  

Ultimately, the FDA’s “fight” with Congress and “fight” with industry come down to one issue: the creation of a 21st century FDA.

It won’t happen if Congress doesn’t fund modernization, tears FDA apart with investigations or relies too heavily on user fees. It also won’t happen if industry—which is the natural advocate for a more modern FDA—can’t work with the FDA to synchronize public health and safety concerns…with efficient and effective ways to review and approve new therapies.

 Steven

FDA and Congress: FY 11 Deficit Reduction Could Cut Deep   February 13th, 2011

Based on budget-cutting actions in the House of Representatives, the FDA is now vulnerable to substantial cuts in its current-year programs. This column analyzes the House situation for FY 11, based on analysis I have done for the Alliance for a Stronger FDA, which is the leading voice for increased appropriations for FDA. Read the rest of this entry

Will the New Congress Be Good for FDA-Regulated Industries?     December 19th, 2010

FDA Matters is hearing that FDA-regulated industries will benefit from the 2010 election. It is assumed that a Republican-led House and more Republicans in the Senate will benefit drug, device and food companies. After all, aren’t Republicans more business-friendly and more concerned about perceived regulatory excess?

Those saying and thinking these things may be in for a rude awakening. Everybody—FDA, industry, patients and consumers—is going to have a rough time over the next two years. Industry will be heard more often, but not always have the winning position. Read the rest of this entry

FDA and Election 2010: Oversight and Investigations     November 13th, 2010

The return of a Republican majority in the House of Representatives means an increase in Congressional oversight and investigations. This mirrors 2006, when the Democrats took back Congress and immediately started investigating the Bush administration. Once again, the agency will find itself buffeted by political forces that are as concerned about “scoring points” as they are about improving government. FDA Matters thinks this will have a large impact on FDA, as well as the agency’s stakeholders.  Read the rest of this entry

FDA and Congress: FY 11 Deficit Reduction Could Cut Deep

Two upcoming events this week will set the tone for FDA appropriations for the next two years. On Monday, the President will release his request for FY 12 funding. On Tuesday, the House will begin consideration of HR 1, which provides continuing appropriations for the remainder of FY 11 (through September 30, 2011).

This column analyzes the House situation for FY 11; a separate column will preview the President’s FY 12 request. These are based on analysis I have done for the Alliance for a Stronger FDA, which is the leading voice for increased appropriations for FDA. I urge you to e-mail me at sgrossman@strengthenfda.org for more information about joining.

The current FY 11 Continuing Resolution (CR) expires on March 4. Until then, almost the entire federal government (including FDA) will be funded at the FY 10 enacted level. For FDA that has meant a budget of $2.35 billion.

The new House Republican majority feels committed to immediate passage of sweeping budgetary cutbacks. Compromises were proposed in the House this past week that would have made a substantial cut in FY 11, but not the $100 billion in deficit reduction that many new Representatives felt was promised.  This approach was rejected.

On Thursday and Friday, the House appropriations committees had to find an additional $20+ billion in cuts to reach the target of $100 billion below the President’s FY 11 budget request. In the first (compromise) round, FDA was slated to receive $2.284 billion. This is $220 million below the President FY 11 request and $62 million below the FY 10 enacted level.

The agency was hit harder in the second round of much deeper cuts. The bill that will be debated on the House floor next week would fund FDA at $2.104 billion. This is $400 million below the President’s request level and $242 million below the FY 10 enacted level.

This represents about a 10% decrease in available agency funding in the current fiscal year. Since the cuts would all have to be absorbed in the second half of the fiscal year, the actual cut (in percentage terms) is likely to be larger. The exact magnitude depends on how much money FDA held back (from spending in the first half of the year) as a hedge against cuts later in the year.

Here is the timeframe and process for consideration of HR 1:

·        Next Tuesday (2/15) – floor debate under an open rule (an open rule allows many amendments to be offered). Expect the House to be confronted with proposals that would impose even greater cuts compared to the version of HR 1 that will come to the floor.

·        By next Friday (2/19) – House expects to have passed HR 1

·        House and Senate both recess on 2/19 and return on 2/28

·        When it returns, the Senate has less than five days to act on the CR and reach a compromise by March 4 with the House   

Most commentators expect several short-term CR extensions before the House/Senate finally agree in late March on serious cuts that are, nonetheless, much less than the House levels. This assumes that 53 Senate Democrats will agree upon lesser cuts and outvote the 47 Senate Republicans.

FDA Matters points out that the Senate is rarely that simple. Senate Majority Leader Reid has said he will fight the House cuts. However, he may not have 53 votes to do so, given the views of several fiscally-conservative Democrats up for re-election in 2012.

In contrast, Senate Minority Leader McConnell has said he has 47 Republican votes for whatever FY 11 CR passes the House. While that may not be true, it leaves open the possibility that he would need only a few Democrats to control the Senate with regard to the FY 11 CR.

Steven

For purposes of disclosure: I am one of the founders and Deputy Executive Director of the Alliance for a Stronger FDA. It is the only multi-stakeholder group devoted to education and advocacy to increase the appropriated resources available to FDA. Members include patient and consumer groups, professional societies, research advocacy groups, associations, companies, consultants and individuals. For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

FDA and the President’s FY 12 Budget Request: What to Watch For

Two upcoming events this week will set the tone for FDA appropriations for the next two years. On Monday, the President will release his request for FY 12 funding. On Tuesday, the House will begin consideration of HR 1, which provides for continuing appropriations for the remainder of FY 11 (through September 30, 2011).

This column previews the President’s FY 12 request; a separate column will analyze the House situation for FY 11. These are based on analysis I have done for the Alliance for a Stronger FDA, which is the leading advocacy voice for increased appropriations for FDA. I urge you to e-mail me at sgrossman@strengthenfda.org for more information about joining.

The President’s FY 12 budget request is the opening salvo in what is likely to be a long, hard fight over next year’s appropriation. While Congress is unlikely to accept the President’s recommendations, it is critically important to FDA whether the President suggests increases, flat funding or cuts for the agency.

If past years’ patterns repeat, there will be confusion on Monday after the release of the President’s budget request. Many of the numbers being discussed by media and commentators will be inaccurate or out of context.

Here are the most common sources of misunderstanding:

·        What base is being used in the President’s request? A proposed $100 million increase (or decrease) for FY 12 means something different if it is based on the FY 10 funding level (which is also the current FY 11 CR level) or on the President’s FY 11 request.

If the President follows past practice, the FY 12 budget request will be based on his FY 11 budget request. Because Congress never adopted it and never will, it would mean that every number in the President’s request has to be adjusted before determining its impact.   

·        For FDA specifically, are user fees included in any given budget number? If comparisons are made between budget numbers, are they both calculated the same way?

As recently as this past week, the media was confused because the House appropriations committee’s initial FDA numbers for the FY 11 CR referred to the President’s FY 11 funding request. The intended reference was to the budget authority (BA) appropriations request (monies to be drawn from general revenue). However, some analysts attempted to interpret the House position by referencing the President’s FY 11 request that included both BA appropriations and user fees.

·        The President’s budget request for FDA usually appears larger because it includes revenue from user fees that are proposed, but not authorized. In many cases, the proposed user fees have been submitted to Congress year after year, although they will never be adopted.

·        The President’s budget request is distorted by the inclusion of tobacco user fees, which represent $450 million in agency income in FY 11. While BA comparisons are not affected by these monies, they make any increase in total funding for the agency look much greater that it really is. The tobacco program is distinct and self-funded. Its growth in no way helps FDA meet its traditional public health mission.  

In terms of timing, the House and Senate want to resolve FY 11 before devoting much time to FY 12. A fast schedule (probably unrealistic) for FY 12 funding would be: 

·        Hearings in March/April, 2011

·        Subcommittee and full committee mark-ups in April/May

·        Final floor action and House/Senate conference agreements in June and July

·        Under this schedule, no bills (or only conference reports) would require action in September.

More likely, there will continue to be sharp disagreements between the House and the Senate on funding levels, delaying the passage of FY 12 funding bills until summer or September. FDA Matters will continue to keep you posted.

Steven

For purposes of disclosure: I am one of the founders and Deputy Executive Director of the Alliance for a Stronger FDA. It is the only multi-stakeholder group devoted to education and advocacy to increase the appropriated resources available to FDA. Members include patient and consumer groups, professional societies, research advocacy groups, associations, companies, consultants and individuals. For more information about the Alliance, go to www.StrengthenFDA.org or write to me at sgrossman@StrengthenFDA.org.

NIH and Drug Development: Dr. Collins’ New Initiative

Dr. Francis Collins, director of the National Institutes of Health (NIH), wants to create a new National Center for Advancing Translational Sciences (NCATS) at NIH.  The new Center would combine $700 million in existing NIH projects with, perhaps, an additional $300 million from new monies or other NIH programs. NCATS is intended as NIH’s “response” to the biopharmaceutical industry’s failure to produce more new drugs.

FDA Matters doesn’t see the sense of creating a public sector drug development company. Nothing suggests that government has either the requisite knowledge or experience to succeed. Yet, several people I respect are supportive of Dr. Collins’s initiative.

Advocates and critics of NCATS may not be talking about the same thing. NIH describes a very circumscribed process in which NIH quickly passes early research over to industry. NIH will do compound screening, animal studies and sometimes proof of concept human clinical trials. Since NIH already does this without a lot of fanfare, why create a new center rather than just highlighting the work?  

The NIH FAQ also promises that NIH will limit itself to less developed clinical areas where there is not yet commercial interest by industry. The notion that NIH will restrict itself in this way rather than pursue best scientific opportunities…is worth at least a raised eyebrow of skepticism.

Industry is frustrated by the difficulties of developing new medications and is actively searching for ways to do better. Maybe they could use some more help from NIH. Unfortunately, HHS and NIH have taken a less cooperative approach, trying to sell NCATS as a response to industry failures in new drug development, as if they are certain of the cause and know that NIH can do better.

It would be better if government officials focused instead on expanding NIH’s existing role in developing medical knowledge beyond basic research. Congress has shown considerable interest in this over the last few years and, until now, there have been few questions about whether NIH is overstepping its bounds.

NIH implies that NCATS will be a productive goad to an unproductive pharmaceutical industry. Whether this is justified, it would help the discussion if NIH were to be more upfront about its limited expertise in developing products to meet FDA’s standards for approval.

Because of the difference in the two agency’s missions, FDA’s standards are much higher and less forgiving. This is appropriate: we want NIH to advance knowledge; we want FDA to make sure that biopharmaceuticals are safe and effective.

Dr. Collins’ initiative also seems hasty in its desire to re-organize upwards of a billion dollars in NIH’s programs by October 1, 2011. It is seductive to imagine that problems can be solved by redrawing boxes on an organizational chart. Sometimes this works, but more often you get the Department of Homeland Security, an organization that is far less than the sum of its parts.

For the moment, there appears little talk about the possible impact on the rest of NIH if NCATS is created. If $700 million worth of programs is transferred to NCATS and Dr. Collins says he will squeeze more money from other priorities, how can existing institutes and centers not suffer? It would be quite unfortunate if basic research were to be devalued by the rise of translational science.

NIH, as an institution, may not be better off with NCATS.  In any case, new drugs are not going to pour out of NIH, as some seem to believe. 

I’d like to see a lot more public discussion of these issues. Let’s take the time to be sure that the integrity and productivity of NIH are not at risk and that the American people will receive tangible benefits.

Steven

NIH’s FAQ and website on the proposed changes: http://feedback.nih.gov/index.php/faq-ncats/

The interview of Dr. Collins by Gardiner Harris of the NY Times:

http://www.nytimes.com/2011/01/23/health/policy/23drug.html?_r=3&pagewanted=all#

From Pharmaceutical Executive on-line:
NIH Director On the Consortium’s New Remit
As the National Institutes of Health hits the headlines over its remit to help develop new medicines, Director Francis Collins talks about the new initiatives he sees as critical for innovation, industry, and public health.