The FDA is one of the easiest punching bags in American politics. Depending on your point of view, it’s either too hard on business with its unreasonable demands, or too soft on those predatory drug companies seeking to profit off Grandma’s illness regardless of whether the products are safe.
When it does its job well, the FDA is like an umpire in baseball. Nobody notices. When it screws up, it’s screaming headline news. The polls show various scandals have taken a toll: About half of the U.S. public thinks the FDA is doing a bad job, and the perceptions are that drug companies put profits ahead of patients.
Not surprisingly, the FDA spends most of its time in a defensive crouch, fending off attacks from all angles, generally resisting most change. But last week it did an unusual thing, by sticking its neck out a couple inches. It suggested, in a 40-page strategic outline, a few ideas for how it can do a better job stimulating (not smothering) life sciences innovation in the U.S. It intends to do this while also ensuring the safety and effectiveness of new medical products.
FDA commissioner Margaret Hamburg has been feeling pressure behind the scenes from venture capitalists and their industry allies for the past 18 months or so. Sure enough, a day after she released the FDA report, the National Venture Capital Association released results of a survey that said the FDA—plagued by long delays, unpredictable decisions, poor communication, and excessive caution in new product reviews—has become the No. 1 reason why 40 percent of U.S. venture capitalists have cut their investments in life sciences the past three years, and that the same percentage plan to continue cutting U.S. investment the next three years. Jobs have been lost, and even more will be shipped overseas unless something is done at the FDA, the investors said.
Developing new drugs or medical devices has always taken a long time, cost a lot of money, and been risky. But it’s gotten worse lately. Government and industry now pour $95 billion a year into biomedical R&D, and somehow society keeps getting a stagnant number of new drugs coming out the other end. It’s a serious concern for patients.
The FDA’s report has some sensible, albeit small-bore, non-controversial ideas about how it can do a better job making this whole process work better. It says it wants to improve its outreach to small businesses; create a fast approval pathway for certain targeted therapies; improve data sharing among its divisions; and better train its scientific reviewers. The report is light on the details, but at least one VC who’s been active in pushing for FDA reform said it’s a start.
“The FDA has finally acknowledged it has been a damper on innovation and has hurt the ability of American companies to grow and be competitive,” says Ross Jaffe, a managing director with Versant Ventures, a life sciences venture firm with $1.6 billion under management. “It’s an encouraging sign that things may hopefully things will start getting better,” he says, adding that the FDA of today doesn’t respect its own prior precedents, adds unpredictable new requirements, and seems oblivious to the time and money it takes businesses to respond to its questions.
I worry that the FDA could get distracted from its main job of ensuring product safety and effectiveness, if it cares too much about industry’s wishes. And there are plenty of companies willing to cut corners and do the quick-and-dirty thing whenever they can slip it by the FDA, so there has to be a well-resourced, tough watchdog on alert.
But if VCs and biotech and pharma lobbies are really serious about reforming the FDA, so that it can be a tough-but-fair regulator that instills public confidence in healthcare products, then the industry needs to quit heaping all the blame on the FDA and start accepting some responsibility of its own. The FDA depends on taxpayer support, so it needs to be sensitive to public sentiment. If the public is more confident in a more accountable FDA, I think you’d get a more efficient and predictable body.
Here are five suggestions for accomplishing that (many of which have been bandied about widely before) that I think the industry could get behind:
1. Support an increase in the FDA budget. Industry at various points in time has supported this idea, and has agreed to pay a lot in application user fees, but always with strings, and never much enthusiasm. Just for perspective, the agency requested a $4 billion budget for fiscal 2011, less than half of what the nation spends each year on the Coast Guard. Trying to regulate one-fourth of the economy takes a lot of money. Even after numerous safety debacles (Vioxx, Avandia), the FDA still doesn’t have a serious modern database that can capture and analyze data on adverse drug reactions for marketed pharmaceuticals in the U.S. It’s truly a national embarrassment that so little effort has gone into solving this problem. Adverse event reports are starting to spill out into the open from patients on Facebook, and nobody really knows what do about it. I just wrote recently about a California startup that is building a deep adverse events database on its own, with a plan to charge for access. The FDA ought to be able to do this itself, and bring its outdated Medwatch system into the 21st century. It ought to catch safety problems in something close to real-time, and update drug warning labels accordingly. And the industry should support this because it’s the right thing to do.
2. Voluntarily ban all direct-to-consumer TV advertising. Pharma companies helped create a new public perception about pharmaceuticals in the last decade through their annoying and misleading TV ads. The pharma companies helped create the national expectation, through ads that exaggerate benefits and downplay risks, that prescription drugs are like taking Honey Nut Cheerios. So guess what? People get righteously indignant and shocked when they find out that the drug that’s supposed to help you dance at your daughter’s wedding actually raises your risk of heart attack and stroke. These ads … Next Page »
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