Latest Drugwonks' Blog
Mirror, mirror on the wall – whose delaying innovation most of all?
Should the new third leg of the FDA review process be … investment considerations?
Jonathan Leff, managing director of Warburg Pincus LLC, believes that the FDA should consider the cost of drug development when making its regulatory decisions.
At a conference on rare diseases conference sponsored by the Drug Information Association and National Organization for Rare Disorders, Leff said FDA should think about the effects of its demands on sponsors, such as the additional cost another efficacy trial would create should the agency demand it.
That’s a bad idea. While there are many things the FDA can and should do that would result in lower drug development costs – the issue has no place in the regulatory review process. It is as inappropriate a third leg as comparative effectiveness. The regulatory process must rest on the twin pillars of safety and efficacy.
Leff does not agree. “We must recognize that if a system is set up to ensure safety and efficacy and no mechanisms are designed into it to take the economic burden into account, we should expect to see as an unintended consequence, exactly what we have seen, which is relentlessly increasing time and cost.”
"Because of that time and cost, venture investors and pharma companies are now unable to make new investments to initiate development of many promising new therapies and as a result the next generation of potential breakthrough treatments … may never have a chance.”
Indeed, we are seeing an increase in time and cost – and these are serious roadblocks to continued investment in innovation. But whether this is entirely the fault of the FDA is not as simple as Leff makes it seem. He’s parroting the party line of those who choose to blame their developmental failures on the FDA. There is a medical device to address this myopia – it’s called a mirror.
Mr. Leff is only repeating the broader opinion of the investor community. The National Venture Capital Association's (NVCA) Medical Innovation & Competitiveness Coalition found that 39% of firms reduced investment in life sciences companies over the last three years. The same percentage expects to further decrease investment over the next three years. The venture capitalists surveyed largely blamed the Food and Drug Administration's restrictions and regulatory challenges for this trend.
Pharmaceutical companies must evaluate their level of responsibility for shrinking investment expenditures. If they want venture capitalists to continue investing in medical research and development, they must produce high-quality drugs worthy of FDA approval – and stop whining when their “miracle drugs” require more clinical evidence.
The solution isn’t for the FDA to weigh the financial investments of biopharmaceutical companies in its regulatory decision process. The solution is to make the regulatory process more predictable.
A quarter-century ago, the success rate for a new drug used was about 14 percent. Today, a new medicinal compound entering Phase 1 testing — often after more than a decade of preclinical screening and evaluation — is estimated to have only an 8 percent chance of reaching the market. For very innovative and unproven technologies, the probability of a product’s ability to make it to the market is even lower. We must work together to turn that around.
When Thomas Edison was asked why he was so successful, he responded, “Because I fail so much faster than everyone else.” Consider the implications if the FDA could help companies fail faster. Using the lower end of the Tufts University estimate of the average pre-tax cost of new drug development, $802 million:
- A 10 percent improvement in predicting failure before clinical trials could save $100 million in development costs.
- Shifting 5 percent of clinical failures to Phase 1, the earliest stage, from Phase 3, the latest stage, reduces out of pocket costs for developers by $15-$20 million.
- Shifting of failures to Phase 1 from Phase 2, the middle stage, would reduce their out of pocket costs by $12-$21 million.
All of these dollars could then be reinvested in other innovative development programs for new life-saving medicines.
For all that modern science has to offer, developing new treatments is still very much an art, in which hunches, intuition, and luck play a critical role. The odds are long. But for more medicine that is affordable and innovative, we need up-to-date regulations that compliment the drug trial process in order to take these chances, which is precisely the mission of the FDA’s Reagan-Udall Foundation.
“I’ll tell you as a venture capitalist, I have been forced to not make investments in rare disease opportunities that we might have or almost certainly would have invested in 10 years ago because of a perception that if we do a clinical trial, and given all the unknowns in this area, miss slightly on the statistical goals, that would be game over for that development program,” he said during the conference.
That may be so. But drug reviews are not and should not be predicated on the calculations of venture capitalists.
But that doesn’t mean maintaining the status quo is acceptable.
Matt Arnold at Medical Marketing & Media asks a few good questions about some tough post-election ACA issues.
How will IPAB cut spending, and who will sit on it?
More than nudging the country towards insurance universality, the guts of the ACA are comprised largely of deeply wonky schemes to try and “bend the curve” of healthcare spending. And then there's the Independent Payment Advisory Board, a scheme with teeth. Nobody's sure exactly how this broadly-drawn entity will operate, but the 15-member board -- for which members must be nominated by the President, in consultation with both parties' Congressional leaders, and approved by the Senate -- will have the power to impose spending cuts on Medicare when the program's spending outpaces projected growth and when Congress fails to pass cuts to offset those increases. Initial cuts will fall on doctors and pharmas, with hospitals and hospices coming in for cuts later on. Critics fear it will evolve into a federal formulary-setting body like the UK's NICE, restricting access to drugs deemed more costly than they're worth (fun fact: Sarah Palin called it “Death Panel-like). The legislation contains language specifically prohibiting the board from rationing care or limiting benefits, but opponents argue it will result in de facto rationing. Republicans are fiercely opposed, along with enough Democrats that repeal is a real possibility, say some Congress-watchers. The board is scheduled to issue its first report in January, 2014, so nominations should be forthcoming soon.
How will CMS reset perverse incentives for provision of medical services?
One of the main goals of the ACA as to shift the US healthcare system away from an incentive structure that rewards quantity – of diagnostic tests and procedures and products, via reimbursement – and towards one that rewards quality, of health outcomes, patient feedback, etc. One way to do that could be through a UK-style comparative effectiveness regime of the sort that industry advocates feared PCORI (the Patient Centered Outcomes Research Institute) would become (early indications are that PCORI will be operating at a much more macro level than ‘Prescribe this, not this'). Another might be a risk-sharing scheme (AKA “Expanded Access”) in which pharmas and federal programs establish a measure of success for a therapy and companies reimburse the government when their products fail to meet that standard. In other words, will we measure for clinical effectiveness or for cost-effectiveness?
What will the particulars of the Physician Payment Sunshine Act legislation that got rolled into the ACA look like?
The Centers for Medicare and Medicaid Services blew past its initial October 2011 deadline to issue guidelines on data collection, having bigger fish to fry – like setting up Obamacare's health exchanges. CMS then pushed back the start date for mandatory data collection to January, 2013. A final rule is expected by the end of the year, but nothing says CMS couldn't hit snooze again. The big question is preemption – will the ACA trump state laws, and if so, will it favor the more lax or the more draconian among them? Also, will the law require health insurers (including government) to report payments to physicians for things like academic detailing and switching patients to generics?
Will Democrats get anywhere in their efforts to limit biologics exclusivity to seven years?
The White House dearly wanted biologics exclusivity limited to seven years. The Administration got rolled by biopharmas, which succeeded in getting it set at 12 years, but the White House never stopped pushing to dial it back. With a fiscal reckoning fast approaching, everything is on the table, and the biopharma lobbies will be playing some serious defense.
How about that non-interference clause?
Vice President Biden, in his debate with Rep. Paul Ryan, suggested he wouldn't mind another bite at a provision in the Medicare Part D prescription drug benefit law explicitly prohibiting the government from butting into negotiations between companies and private plans that administer the benefit. “If they allow Medicare to bargain for the cost of drugs like Medicaid can, that would save $156 billion right off the bat,” said Biden, whose party's left flank has tried and failed repeatedly to dislodge the clause. Given solid Republican control of the House, it seems unlikely that they might succeed now, but again, everything is on the table, and the politics of prescription drug prices are ever tricky.
Matt's complete article can be found here.
December 7, 2011 is a day that will live in regulatory infamy. That’s when Secretary of Health and Human Services Kathleen Sebelius overruled the FDA decision on the over-the-counter status of emergency contraception.
By reversing an FDA decision, the Secretary set a dangerous precedent for all-comers to lobby Congress, the HHS and the White House on any and all FDA decisions—directly inserting politics into what must be a scientifically driven process.
On December 13, 2011, Senators Patty Murray and Maria Cantwell and a dozen other Senate Democrats asked the Obama administration to produce scientific justification for its decision to block girls 16 and younger from buying the emergency contraceptive Plan B over the counter.
In a letter to U. S. Department of Health and Human Services Secretary Kathleen Sebelius Tuesday, the 14 lawmakers said they wanted "medical and scientific evidence" behind Sebelius's unprecedented decision to overrule the Food and Drug Administration and block younger teenagers from buying the so-called "morning after pill" without a prescription.
Senator Murray also called for a Senate hearing on the topic. She asked the Secretary to testify in front of a Senate committee to explain her scientific views on the matter. Senator Murray stated, “I want to know what the scientific evidence is that the secretary made this decision on in overriding the FDA … Pharmaceutical companies here in this country make some very expensive decisions, and they need to know that the FDA is going to base a decision based on science.”
The hearing hasn’t happened yet.
Will it happen now that the election is over?
It should. And the hearing should broaden its scope to address the ability of the Secretary of Health and Human Services to reverse FDA decisions and whether the FDA Commissioner should serve a congressionally mandated six-year term in order to ensure the position is “above” the political fray – similar to that of the Director of the FBI—and then approved by the Senate.
Let the person chosen as FDA Commissioner serve as free of the political current as possible.
And a Senate hearing would be a good place to start.
But what does that mean?
“For our district and for our country, the debate on Obamacare is over,” declared Bill Foster, a Democrat elected Tuesday to the House from a suburban Chicago district.
Not so fast.
As the New York Times reports, “Now comes another big hurdle: making it work.”
Jeff Goldsmith, a health industry analyst based in Virginia, offers a more pragmatic assessment, “If you actually are going to implement this law, people need to know what’s in it — not just the puppies-and-ice-cream parts.”
And, as any owner of a new puppy can attest -- it’s messier than it looks.
It seems that, in Missouri, the natural way to stop an ObamaCare-mandated state health exchange is to insist it be put to a vote. (Under the Patient Protection and Affordable Care Act, states have until 2014 to establish state-based insurance exchanges that may be run by the state, the federal government or through a partnership of both.)
On Election Day the Show Me State passed Proposition E, prohibiting the governor or any state agency from establishing or operating state-based health insurance exchanges unless and until they are authorized either by the legislature or by popular vote. Proposition E allows taxpayers to sue any Missouri state worker or agency involved with any part of the exchange process not required by federal law.
The next four years are going to be a battle over whether or not Uncle Sam continues to morph into Uncle Sam, MD.
Consider:
Uncle Sam as our nation’s largest payor.
Uncle Sam as funder of comparative effectiveness research.
Uncle Sam as “academic” detailer of comparative effectiveness research.
Uncle Sam as determiner of Essential Health Benefits.
Consider the continued disempowered physicians, patients -- and states (which are the true laboratories for healthcare delivery innovation).
Consider a battle royale over whether or not comparative effectiveness should become a third leg for FDA approvals (in addition to safety and efficacy).
Consider whether CMS reimbursement will move to a value-based reimbursement model, setting up the foundation for a US version of Britain's NICE. (Remember Don Berwick?)
Consider Medicare and Medicaid adopting the NHS model of "expanded access" (formerly known as "risk sharing") wherein reimbursement is granted -- but if predefined patient outcomes aren’t achieved, the pharmaceutical company reimburses CMS. Hm.
Consider FDA Commissioner Peggy Hamburg. Will she stay or will she go? (I predict she will stay.)
I predict that (regardless of who gets elected) IPAB gets revoked on the Hill. IPAB is a slippery slope to broader government price controls, so it should be good riddance to dangerous rubbish – if the President doesn’t veto this first congressional rebuke to ObamaCare.
And what of the legitimacy of Billy Tauzin’s famous ACA “deal?” Will there be legislative action to revoke the Non-Interference Clause (as mentioned by Vice President Biden -- although not by name -- during the Vice Presidential debate)? Unlikely.
Will the President continue to push for 7 years of data exclusivity for biologics (as opposed to the 12 currently allowed under the ACA?) Will he have the chutzpah to claim he is pro-innovation if he does?
Will we have to endure another foolish waste-of-time debate over drug importation?
And did somebody say “Doc Fix?”
Ladies and Gentlemen, fasten your seatbelts and start your engines.
Those who believe that they are exclusively in the right are generally those who achieve something. -- Aldous Huxley
Rather than speculating as to where the FDA may go in a post-PDUFA V world, it's important to focus on where it has already gone. Without much attention or fanfare, the agency has established a new review board within the Center for Drug Evaluation and Research – the CDER Exclusivity Board. Its goal is to help the agency make consistent findings on whether products should be granted periods of marketing exclusivity.
The board began meeting in November 2011. It is comprised of agency employees from the Office of Regulatory Policy, the Office of Medical Policy, the Office of New Drugs, the Office of Pharmaceutical Sciences, the Office of Executive Programs in CDER and the Office of the Chief Counsel.
The focus is on five-year new chemical entity exclusivity, three-year new clinical trial exclusivity, and exclusivity for biological products, according to a brief description posted on the agency’s website.
“The board will not review or make recommendations with respect to all exclusivity determinations in these areas, but will assist the center in resolving certain matters, including issues that arise in the context of specific requests for exclusivity,” the web page states.
The board generally meets once or twice a month. Members review written submissions from sponsors and board members participate in meetings with sponsors regarding exclusivity determinations for their products.
Some exclusivity matters fall outside the board’s purview: The body generally will not make recommendations for 180-day generic drug exclusivity, seven-year orphan drug exclusivity, or six-month pediatric exclusivity. But it will work with other offices and groups within FDA that are responsible for dealing with these exclusivity determinations as needed.
Your PDUFA dollars at work.
Matt Herper of Forbes, in his article, Why Presidents Don't Shape The FDA, writes:
Generally speaking, Democrats like Obama want to ensure that medicines are safe and are less concerned with being friendly to the pharmaceutical industry, and Republicans like Romney believe in lowering regulatory barriers and getting medicines to market faster. But the reality is no president makes the FDA his top priority — which means that the agency is often shaped as much by the opposition as by the commander in chief.
In the bigger picture, this is an illustration that when it comes to reshaping federal agencies, Presidents are not as powerful as you might think — and a reminder that just because a politician campaigns for a change does not mean that he or she will be able to execute it.
The important truth to remember is that the FDA is an agency driven be career staff. Of the 11,000 or so employees, under a dozen are political appointments (including the Commissioner). And all of those Schedule Cs reside within the Office of the Commissioner. That means 100% of employees in every FDA center are career government workers. Put another way – drugs are being reviewed exclusively by career employees.
To refer to the “Obama FDA” or the “Bush FDA” or a future "Romney FDA" is valid only insofar as the presidentially-appointed Commissioner sets an agenda. And that is if the Commissioner has an agenda and (most importantly) can enlist senior career officials to buy into it.
During my tenure at the FDA, Commissioner Mark McClellan was able to convince the career leadership that the role of the agency was to be regulator and colleague to industry and, most importantly, change-agent. I believe we had many successes because of this agenda – and the public health was well served.
The most important tool any President has to impact the performance of the FDA is in his choice of an FDA Commissioner. And that appointment must be confirmed by the United States Senate.
Herper concludes:
From an FDA perspective here, the lesson may be that it’s best to insulate the agency from politics as much as possible. One way to do that, according to Peter Pitts of the Center for Medicine in the Public Interest, would be to put FDA commissioners on six-year terms, protecting them from political churn.
More to the point, a six-year term would allow a Commissioner to more fully pursue his or her agenda.
Neither President Obama or Governor Romney has demonstrated any interest in a fixed term for the Commissioner. At least not yet.
While many on the East Coast are thinking about electrical power, a new global study by the IMS Institute for Healthcare Informatics shows that the use of healthcare IT to increase medication adherence could be a key factor in saving some $500 billion in healthcare spending worldwide -- and that a key factor is the power of information.
“Harnessing available information to set priorities, monitor progress and support behavior change among healthcare stakeholders – including policymakers, payers, clinicians, nurses, pharmacists and patients – is a vital first step,” he said.
Aitken said the increasing use of data in healthcare makes this a good time to apply the levers suggested by the study to lower healthcare costs, which are:
- Increase medicine adherence by addressing patient beliefs and behaviors at the point of prescription and during medicine intake.
- Ensure timely medicine use that prevents avoidable and costly consequences among patients with highly prevalent diseases that increase in severity if diagnosis and treatment are delayed.
- Optimize antibiotic use to turn the tide on rising antimicrobial resistance worldwide due to the misuse and overuse of antibiotics.
- Prevent medication errors throughout the medicine provision pathway, from prescription to administration.
- Use low-cost and safe generic drugs where available to leverage the under-exploited opportunity in post-patent expiry markets.
- Manage polypharmacy where the concurrent use of multiple medicines, particularly among the elderly, risks costly complications and adverse events.
“Not all of this is new. Adherence is not new,” he added. What is new, however, is the ability to use data and predictive modeling to find which patients best respond to what type of medication adherence reminders, he said. Some need a visit from a nurse, which is more costly than using a text or a tweet. Predictive modeling can help an organization use resources wisely to get the most adherence from patients.
The study also focuses on two key factors critical to driving improvement across the six levers: multi-stakeholder engagement and … the power of information.
Knowledge is Power.
The study can be found here.
Dear FDA Colleagues:
I would like to make you all aware of an upcoming transition within the Office of the Commissioner. Effective November 5, 2012, Jeanne Ireland will be leaving her post as head of the Office of Legislation (OL) to assume a new role as Senior Advisor to the Commissioner within the immediate office. In that new role, Jeanne will manage high priority projects and, in the short term, will continue to manage the legislative/oversight issues surrounding the recent meningitis outbreak and related pharmacy compounding issues. Michele Mital has graciously agreed to serve as Acting Associate Commissioner for Legislation and will oversee and manage all other aspects of OL.
For the past three years, Jeanne has been a terrific asset to the Agency in her leadership role in OL, and she has numerous legislative successes under her belt, including most recently the sweeping Food Safety Modernization Act and the Food and Drug Administration Safety and Innovation Act, which included the reauthorization of the prescription drug and medical device user fee programs and for the first time created new user fee programs for generic drugs and biosimilars. I am sorry to lose Jeanne in this important role, but I am thrilled that she will be assisting us in her new capacity. I therefore would like to congratulate and thank Jeanne for her prior achievements and to welcome her to the immediate office. I also would like to thank Michele for taking the reins in OL.
Sincerely,
Margaret A. Hamburg, M.D.
Commissioner of Food and Drugs
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
