President Trump made an excellent choice on Friday in nominating Dr. Scott Gottlieb to be Commissioner of the Food and Drug Administration. Gottlieb, a medical doctor and former FDA deputy commissioner, knows from experience how FDA’s culture and its ever-increasing demands for more extensive clinical testing delay access to life-saving treatments.
If confirmed, he has an opportunity to shake up a system that has lost sight of what its goal should be—to help patients receive access to better drugs, sooner, at lower cost.
Rewarding Hesitation
FDA’s primary goal appears to be to avoid risks of adverse side effects from approved drugs. This is the classic reaction to the lopsided incentives FDA faces; if it approves a drug that later shows undesirable side effects, the victims are visible and its officials get dragged before Congress and pilloried in the press.
On the other hand, when it delays approval of a promising drug that could improve patients’ lives, the victims of delay are invisible; patients who die before the drug is available were unaware of its promise. As a result, FDA is rewarded for erring on the side of risk aversion, rather than for making better affordable drugs available to patients as soon as possible.
Before manufacturers can market and patients can benefit from a new drug, FDA requires three phases of clinical trials. These trials can easily take 12 years or longerand cost the sponsoring company $2 billion or more.
The FDA rigidly requires these clinical trials even for drugs, like Marathon Pharmaceutical’s recently approved Deflazacort, that have been used successfully in other countries for years. Not surprisingly, to cover the high costs of clinical testing and FDA approval, manufacturers charge exorbitant prices once a drug is finally allowed on the market.
Simply stated, the FDA has a monopoly on access to new drugs. Biopharmaceutical companies have learned that the best way to profitability is to follow the well-trodden path of incremental change that conforms to clinical testing procedures that give the FDA comfort.
A mindset focused on greater competition, transparency, feedback and learning could greatly improve patient access to life-enhancing pharmaceuticals.
The high costs of the clinical trials favor large pharmaceutical companies while innovative small companies must continually raise capital since they cannot generate revenues from drug sales until they secure FDA approvals. Moreover, investors are not eager to fund radical innovations that face the added risk of uncertain FDA testing demands.
If confirmed, Gottlieb will be in a position to change these incentives and introduce a new regulatory paradigm focused on competition to accelerate innovation, dramatically shorten the time from development to patient access, and sharply reduce the prices for new drugs—all to the ultimate benefit of patients. Rather than settling for the status quo that rewards delayed access and excessive caution, he can promote early access and fast learning.
Free To Choose Medicine
This new mindset is attuned to today’s reality of accelerating medical breakthroughs, big data analytics, personalized medicine with inherently safer drugs tailored to your genetic makeup, and patients’ enthusiasm for sharing data and participating in medical advancements. It also addresses patients’ justifiable moral objections to being sacrificial lambs in clinical trials in which many participants receive a placebo that helps FDA statisticians, but not seriously-ill patients.
A mindset focused on greater competition, transparency, feedback and learning could greatly improve patient access to life-enhancing pharmaceuticals. One of us has offered a proposal that holds particular promise, called “Free To Choose Medicine“; it has three key components:
First, a free to choose track would complement FDA’s existing clinical trial track. This would enable patients, advised by their doctors, to contract with a drug developer to use not-yet-approved drugs after Phase I safety trials are successfully completed and one or more Phase II trials have demonstrated continued safety and initial efficacy.
Free-to-choose drugs could be available seven years earlier than the status quo and fundamentally change the economics of drug developmental costs and drug pricing — to the benefit of patients. In this new, fast-paced, competitive environment, many existing drugs, over time, would face heightened competition thereby forcing prices down. A premium would be placed on scientific skill in developing breakthrough medicines, not skill in dealing with the FDA bureaucracy.
Second, an open access database, managed by an agency such as the National Institutes of Health, would include up-to-date treatment results for free-to-choose drugs, including patients’ genetic makeup and relevant biomarkers. In addition to offering guidance to patients and doctors, the database would be a treasure trove of insights to guide drug developers in making better R&D decisions.
Third, a new type of drug approval is needed based on treatment results (observational data) for real-world patients who receive free-to-choose drugs. This would utilize advancements in big data analytics, incentivize drug developers to participate in the free-to-choose track, and expedite insurance reimbursements.
Back to Gottlieb
Despite his strong qualifications, Gottlieb will face detractors in this partisan political climate, but FDA reform need not be partisan. A system that focuses on patients first, harnesses competition and new data analytics, and rewards innovation and learning is something everyone should be able to agree on.
[Reprinted from The Hill.]
Bartley J. Madden retired as a managing director of Credit Suisse HOLT after a career in investment research and money management that included the founding of Callard Madden & Associates.
