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FDA After the Election—Part 1: Budget

Monday, October 29th, 2012


Apart from an occasional reference, FDA is not part of the campaign dialogue leading up to the November 6 nationwide U.S. election. FDA Matters believes this is probably good—any intelligent  discussion of FDA’s future requires a long-term perspective and a mastery of detail and nuance—both of which are in short supply during “sound bite”-oriented politicking.  

Yet, FDA will be strongly impacted by the election’s outcomes. Part 1 of “FDA After the Election” concentrates on the agency’s budget situation, while Part 2  focuses on leadership and change (http://www.fdamatters.com/?p=2164).

Both parts reflect that ultimately FDA is people-driven—not only by who leads, but also because over 80% of the agency’s costs are people-related. More money = more people = more capability and activity. Less money will have the opposite effect.

The Potential for 8.2% Cuts in January 2013. Most of the current focus is on the potential 8.2% across-the-board federal budget cuts slated for January 2, 2013. Sequester, as the process is known, will leave FDA with about $320 million less to spend in FY 13 than it did in FY 12.

This includes cuts to taxpayer-funded FDA appropriations (about a $2.5 billion base) and user fee revenue (nearly a $1.4 billion base). If the cuts were applied entirely to FDA personnel, the agency would have to lay-off or furlough about 1000 employees.

We know that the sequester of FDA funding has consequences:  food will be less safe; drug and device approvals will be slower; problems with imports and globalization will become more numerous; and FDA modernization will be severely slowed. Note that this is the opposite of what everyone–critics included–wants. The precise impact is hard to quantify because FDA will try to prioritize its remaining manpower to avoid immediate disasters and avoid any visible failure to approve life-saving therapies.

Congress does not want to reduce the federal deficit through a sequester. This view is supported by President Obama and his opponent, Governor Romney.  Despite this seeming unanimity, an alternative deficit reduction package would need to deal with entitlement programs and taxes. So—politically—deficit reduction is a mess and sequester may happen.

Budget Threats Will Continue, Regardless of Sequester. Even if sequester were somehow to be avoided, pressure on federal spending will continue far beyond the immediate future. Sequester is the most immediate hurdle in what is likely to be an annual challenge to all federal agencies, including (and especially) FDA.

In the face of this, the Alliance for a Stronger FDA* is asking Congress for three sane and sensible things that should help FDA:

  • Recognize and properly fund the special and growing role of FDA as a protector of food and drug safety and a gateway to medical innovation and science.
  • Find alternative means to reduce the budget deficit and avoid the across-the-board sequestration of 8.2% of federal agency funding on January 2, 2013.
  • Return federal budget-making to a process under which national priorities (such as FDA) are adequately funded.

The Alliance’s call for a return to funding based on national priorities is a statement of faith: that FDA is a core function of national government and that we can demonstrate that funding the agency is essential.

Re-affirming FDA as a National Priority. We should not, however, assume that FDA’s core governmental role is self-evident to everyone. We need to convince policymakers, the media, and the public that we belong in the very special group of federal programs that need to grow–even as other important programs suffer cutbacks and some even wither and die. Implicitly, the responsibilities of the federal government are going to be redefined, whether consciously or as the residue of decisions that will be forced on the President and Congress after the election and over the next few years.

How well will FDA compete for scarce dollars, assuming that the situation is not pre-determined by across-the-board cuts? The elite tier of federal programs has some heavy-hitters, such as air-traffic controllers and the nation’s judiciary. The absence of funding in their areas often has more concrete and immediate consequences than a lack of funding for FDA.

With FDA funds being used to oversee products and services that mount in the trillions and encompass 25% of consumer spending….our case is equally compelling. Everyone involved with FDA has an obligation to make themselves advocates for increased funding.


*  For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA, www.strengthenfda.org. It is the only multi-stakeholder (consumers, patients, health professionals, industry) that advocates for increased FDA funding. Our strength is in the breadth and number of our members, so I urge you to contact me for more information about belonging. Contact me at sgrossman@strengthenfda.org.

Note that my duties with the Alliance are in addition to, and apart from, the work of my policy and regulatory consulting firm, HPS Group, LLC, which is the publisher of FDA Matters.  The views expressed in FDA Matters are my own, and those of HPS Group, and are not the views or positions of the Alliance.

Why Orphan Drugs are a Key Part of Pharma’s Future

Thursday, August 23rd, 2012


I was recently interviewed about orphan drugs for the British website, “pharmaphorum” and thought my readers might be interested. Here is a sample:


HB: How has the orphan drug space changed since the introduction of the Orphan Drug Act 1983?

SG: There is really no way to compare the situation. When we passed the Act, we hoped to stimulate the development of a few drugs that would make a difference in people’s lives. No one foresaw that we were creating what would become a multi-billion dollar market segment in which companies might compete fiercely to be first. The timing was also fortuitous — in that the Act was adopted just as our capabilities in biotechnology began to grow and the two movements are closely intertwined.


The full interview is as at: http://www.pharmaphorum.com/2012/08/22/fda-matters-orphan-drugs-key-part-pharmas-future/.



FDA and the 2012 U.S. Presidential Election

Wednesday, August 1st, 2012


FDA Matters has been wondering: when is the right time to start talking about the 2012 U.S. Presidential election and how it might affect FDA’s future? The best answer is: when Congress has finished its FDA policy work for the year. With the enactment of FDA user fee reauthorization legislation and a pending agreement on government funding for the first half of FY 2013 (starts October 1, 2012), it is now time to start talking. 


Without picking sides: what issues face FDA after the election and in 2013? How might the agency be affected by whether President Barack Obama is given another four year term or challenger Mitt Romney is elected President?


For those of us deeply involved in the FDA world, the most important difference between the candidates might well be their approach to the agency and particularly toward FDA leadership.


President Obama has not yet issued any statements about FDA on his   campaign website  . However, based on the last 3 ½ years, he supports FDA and its mission and sees that the agency’s role is likely to continue to grow because of globalization, public health and safety, and the need to encourage innovation. 


His overall regulatory positioning might be considered less favorable to FDA. New agency regulations must pass through the Office of Management and Budget (OMB)’s Office of Information and Regulatory Affairs (OIRA). Cass Sunstein, a distinguished legal scholar appointed to head OIRA in 2009, is considered to be more open to de-regulatory approaches that may be inconsistent with FDA’s growing responsibilities. For example, it is his office that is currently holding up some of the regulations needed to implement the Food Safety Modernization Act.


The Republic nominee, Mitt Romney, has not yet issued any specific policy statements on FDA. However, he appeared at a medical device company event in late March and       su   ggested     that FDA is part of an “attack on free enterprise” by “the thousands upon thousands of bureaucrats that work in Washington.”


His campaign website does not reference FDA, but it does have a position paper on regulation. In it, he advocates:

·                  Imposing a regulatory cap of zero dollars on all federal agencies*

·                  Requiring congressional approval of all new “major” regulations


One should never take campaign speeches too seriously. Even allowing for that, it would appear there are significant differences in how the two candidates view FDA today.  These differences may narrow or expand in the three months until Election Day. 


Just as the two candidates appear to differ strongly on the role of FDA, they are also likely to differ on their choice of FDA commissioners. This is not just a matter of whether Romney wins, but also if Commissioner Hamburg is thinking about leaving (and we have no knowledge of this, only that it is not uncommon for Administration leaders to leave in the year after a President is re-elected).


The history of appointments of FDA commissioners is quite varied, starting with 1991 when Dr. David Kessler became the first Commissioner to face a Senate confirmation hearing. He resigned at the beginning of Clinton’s second term (analogous to an Obama victory and a decision by Dr. Hamburg to leave). It took nearly two years for President Clinton to appoint his successor and the Senate to confirm the appointment.


Hiring a new commissioner was not a priority for the new Bush Administration in 2001. Dr. Mark McClellan was confirmed in November 2002, more than 20 months after the new Administration took office. In contrast, Dr. Hamburg was appointed by the Obama Administration and was confirmed by May, a delay of less than 5 months.


So, if Romney wins or Obama wins/Hamburg resigns….we may have a new Commissioner quickly or the job may be vacant for a long time.


Overall, the differences between Barack Obama and Mitt Romney are likely to matter a great deal to FDA. In turn, this will affect FDA stakeholders….regardless of their politics or their views on whether FDA needs continuous improvement or an outright overhaul.




*   My understanding of this: the private sector cost impact of any new federal regulation must be offset by the private sector savings from repealing or significantly revising an existing federal regulation.


P.S. For those wanting more on FDA and the U.S. elections, FDA Matters intends to write often on this topic over the next few months.

FDA’s E-Mail Scandal: First Impressions

Monday, July 23rd, 2012

According to the New York Times, FDA collected more than 75,000 employee e-mails in an effort to identify leaks of confidential trade secret information. At some point, a narrow, possibly legitimate inquiry into a handful of scientists at the Center for Devices and Radiological Health (CDRH) turned into a massive e-mail surveillance of selected individuals and their contacts.

So far, FDA is not contrite. FDA’s position, while still not quite official, appears to be: we tried to accommodate these individuals’ complaints within the personnel and dispute resolution systems. We had legitimate concerns that trade secrets were leaving FDA in their correspondence with third parties.

FDA Matters believes we don’t know the whole story yet.

The immediate perception is that the agency–in the name of protecting trade secrets–targeted internal critics and found ways to monitor their strategy and actions.

Fueling concerns is that a number of the monitored e-mails were sent to media, the President, and Members of Congress. Among others, Republican Senator Charles Grassley and Democratic Congressman Chris Van Hollen, have expressed concerns that correspondence with their staffs had been part of the surveillance.

Further, the surveillance appears to have included correspondence with the Office of Special Counsel, an independent federal investigative and prosecutorial agency with jurisdiction to oversee whistleblower complaints. Understandably, they are unhappy when they perceive that other federal agencies are interfering in their investigations.

In short—even with Congressional recess coming up and a national election—this issue is not likely to go away.

Every day FDA receives confidential trade secret information that it is legally obligated to protect. Any individual failing to do so is open to penalties—I assume both criminal and civil. To me, the key paragraph of the NY Times story is this one:

F.D.A. officials went to the inspector general at the Department of Health and Human Services to seek a criminal investigation into the possible leak, but they were turned down. The inspector general found that there was no evidence of a crime, noting that “matters of public safety” can legally be released to the news media.


Undeterred, agency officials began the electronic monitoring operation on their own.

If true, this is quite damning of the agency and provokes the usual question of why senior FDA officials did not exercise more restraint and better judgment.  

However, the agency’s unofficial semi-response suggests that this is not the full picture. At some point, the Office of General Counsel (OGC) at FDA became involved and authorized surveillance. Assuming this is true, did OGC have the authority to do so…and did they know that they were authorizing a broad surveillance? (I refuse to think of 75,000 e-mails as a narrow search).

According to an on-line Wall Street Journal article, the key individual in this case is a “serial whistleblower” (my term, not theirs), having filed lawsuits at two previous jobs. Supposedly, in both cases, the allegations of institutional misconduct were not proven in court, but he received settlements for “wrongful terminations” that followed his whistleblowing. What happened previously and elsewhere is irrelevant, except perhaps to remind us how hard it is for government agencies and public entities to fire an employee who they believe to be a disruptive force.

There is no way that FDA can look good if it is seen as approving devices that should not be on the market, squelching internal scientific disagreements, pursuing vendettas against its employees, or interfering with the prerogatives of Congress and the Office of Special Counsel.

In the face of all of this—the allegations and FDA unwillingness or inability to respond fully–it is hard not to worry about the agency. It is an institution that badly needs public and congressional support to do its job, especially when its responsibilities are growing and its budget isn’t.

FDA Matters hopes that Commissioner Hamburg and her senior staff are able to respond more fully and “on the record” in a way that helps stakeholders, Congress, the media and OSC understand why the extensive surveillance became necessary and what public purposes it served.


Here is more background, provided as a courtesy by BioCentury:  http://www.biocenturytv.com/freecontent/tbr_072312.pdf.

Some of the other relevant documents available only through subscription trade media:


1/ FDA’s response to Senator Grassley is available from Inside Health Policy (www.insidehealthpolicy.com, by subscription) at: FDA letter to Grassley.


2/ According to Dickinson’s FDA Webview (www.fdaweb.com, by subscription) Commissioner Hamburg on 7/17/12 sent the following email to all employees:


Over the past few days, a handful of stories, first appearing in The New York Times, were written regarding the agency’s monitoring of the computers of five CDRH employees.


I want to reinforce that the FDA’s greatest strength is our people. I value the expertise, professionalism and dedication each of you brings to this agency every day. There is no greater mission than that with which we are charged – protecting the public health. I have great confidence in FDA’s leadership and employees, and we have worked hard to foster a culture where differing opinions on scientific data, regulatory issues and product approvals may be expressed freely. In addition, employees have avenues available to them to voice their concerns both inside and outside the organization without disclosing proprietary information that is protected by law from unauthorized disclosures. I want to reiterate the FDA's commitment to protecting the rights of whistleblowers who are doing a service by bringing public safety concerns to the forefront. It is only in working together with the highest levels of professionalism and ethics that we will continue to achieve our mission.


Regarding the recent news stories, I want to stress that the FDA’s ability to fulfill our mission of protecting and promoting public health necessarily relies upon our ability to protect confidential information. Protecting such information in our possession allows us to work with industry and other stakeholders to ensure the quality of FDA-regulated products and the integrity of FDA-decision-making.


In 2010, the agency initiated monitoring limited to the government-owned computers of five CDRH employees. The impetus for the monitoring was a March 2010 New York Times article and a letter from GE Healthcare that indicated a pattern of unauthorized disclosures of confidential information related to pending medical device applications and submissions over the course of more than a year. The intent of the monitoring was to determine whether confidential commercial information had been inappropriately released and to stop any further unauthorized disclosures, since any such disclosures are a violation of the law.


Although the FDA, as with other federal agencies, has the discretion to conduct appropriate monitoring of government computers, we do so only in very limited circumstances. We do not take lightly the decision to monitor government computers.


I hope this note offers a bit more context to the situation. We will continue to update you as best we can. Please be assured that your work and your opinions are appreciated.

2012 Mid-Year Report on FDA: Opportunities, Threats and Accomplishments

Monday, July 9th, 2012


So much is going on at FDA right now, that it is difficult to pick just one topic for this week’s FDA Matters. Instead, we are going to take a quick tour of some “hot spots” at FDA and how they might affect the agency over the remainder of the year and beyond.

Please read on…there is something for everyone in the topics covered.

The “Lost” FSMA Regulations. At the very end of 2010, Congress passed the Food Safety Modernization Act (FSMA). The law was intended to fundamentally re-set the term under which FDA acts to assure a safe food supply. It focuses on preventing problems, rather than fixing or limiting them afterward. FSMA provides the agency with new authorities and additional resources consistent with FDA’s role of overseeing a global food supply.

The first provisions of FSMA went into effect in January 2012 and additional requirements become effective this month. To guide implementation of these requirements, FDA has produced four draft regulations. None have been published; all are stuck in the review process at OMB.

The mystery of the “lost” FSMA regulations prompted two reporters to call me this past week and ask: is OMB holding back these (and other) regulations until after the election, presumably for political reasons. I couldn’t see an electoral connection, plus the first of the proposed regulations was submitted to OMB in December 2011, a very long time before the election.

The “lost” FSMA draft regulations are worrisome by themselves, but especially with so much else going on at FDA that may require OMB review.  

FDA’s Drug Safety Monitoring Program Hits Target, Will Expand. We don’t read often enough about the successes that come from cooperation and hard-work at FDA. In the 2007 user fee reauthorization legislation, Congress directed FDA to construct a nationwide electronic post-market safety monitoring system that would allow FDA to examine tens of millions of patient records to discover or refute possible safety concerns about FDA-approved products.

In a recent edition of FDA Voice, the FDA’s own blog site, the agency reported that the monitoring system, called “Sentinel,” now has access to the de-identified medical and/or insurance records of about 126 million Americans, collected through 17 data sources (e.g. VA, Kaiser). Sentinel is definitely still a “work in progress” on a number of levels, but it will be of increasing value as medical products become even more complex and even more integral to medical care.  

Funding Ups and Downs. Despite Congressional reauthorization of the prescription drug and medical device user fee programs, the budget authority (BA) (taxpayer-funded) portion of FDA’s budget is still the bulk of the dollars. The Senate has included a small increase in BA funding for FDA for FY 13; the House has proposed a small decrease.

Of compelling concern is the strong potential that FDA (along with all federal discretionary funding programs) will be hit with a 7% to 10% “sequestration”—an across-the-board cut–on January 2, 2013. This would reduce the agency’s budget  by between $175 million and $250 million in FY 13. This is FDA’s “contribution” to saving the federal budget more than $1 trillion over the next 10 years. 

If sequestration occurs, FDA will try to avoid lay-offs by shifting more employees from taxpayer funding to user fees. In that case, increases in user fee income will be backfilling the BA cuts, rather than contributing to real agency growth. Yet, FDA will be obligated to undertake the user fee-driven activities and meet the law’s performance measures as if the new user fee money was paying for additional staff.

User Fee Reauthorization Will Drive, Not Disrupt, the Agency Agenda. Five years ago, the user fee reauthorization (PDUFA 4) didn’t become law until late September, a few days before fiscal year 2008. The combination of immediate deadlines, delays in collecting user fees, and insufficient trained personnel set off a series of problems that took three years to fully overcome.

This time, Congress finished the reauthorization in late June and FDA has been planning the law’s smooth implementation for months. Instead of panic, CDER in particular, seems to be feeling good about the path forward and the many changes called for in PDUFA 5. 

Dr. Janet Woodcock, head of CDER, has listed her priorities as, among other things: timely transition to new user fee requirements (including start-up of new generic drug and biosimilars user fees); dealing with drug shortages, moving forward on data standards and new IT support systems, and advancing regulatory science.

Results are still what matters and there are always critics….but a sense of optimism at CDER is always welcome.


User Fee Reauthorization—Critics Come Out Before the Ink Is Dry

Tuesday, June 26th, 2012


The House passed the final user fee reauthorization legislation last week and (as of this evening) the Senate has also passed the bill. It will now go to the President for signature. FDA Matters says: well done, Congress! Despite my fear of delays and bickering, you completed this process on time and with broad bipartisan support.


However, critics are already emerging, "before the ink is dry.” The advocacy group, Public Citizen, is complaining that drugs and devices will be less safe as a result of the legislation. At the same time, Dr. Scott Gottlieb, a former FDA official, has published an essay arguing the legislation doesn’t go far enough to expedite review of drugs for serious medical conditions.


The Public Citizen Health Research Group’s critique is to be expected. They were founded 40 years ago and have consistently been critical of the agency’s handling of drug and medical device approvals. Their continued opposition rests on three primary points:


  1. User fees created by PDFUA have created a conflict of interest because the agency is funded in part by the industry it is supposed to be regulating.
  2. This has led to poor quality reviews of drugs and thus the release of dangerous products. Since PDUFA, more drugs have been approved and then banned, causing needless deaths/injuries.
  3. Working conditions at the FDA have plummeted since PDUFA, resulting in high staff turnover and sweatshop-like conditions.

I, too, wish that FDA were 100% taxpayer funded, but user fees are reality, a compromise that makes it possible for FDA to have the funds to operate. There is no evidence of bias generated by the fees, plus Americans would be far worse off if a quarter of FDA’s budget (user fees) were to suddenly disappear.


With regard to the quality of drug reviews, I see no evidence they’ve declined and the methodology of the PDUFA/drug approval study is suspect. Working conditions and staff turnover are definitely a matter of “compared to what?” I don’t think FDA does badly when you look at it that way.


Far more of a surprise is the essay by Dr. Scott Gottlieb, former deputy commissioner for medical and scientific affairs at FDA.  Using primarily examples of orphan drugs, he argues that FDA is over-focused on long-term safety and on reining in physician prescribing practices. As a result, the agency is stifling medical innovation and disregarding the needs of patients with serious medical conditions. I don’t agree with him on a number of points, but you can hit the link and judge for yourself.


His argument might be more compelling if he referenced large-market products, such as pain killers and obesity drugs. However, by using orphan drug examples, Dr. Gottlieb winds up attacking the new user fee reauthorization legislation as insufficient to expedite review of drugs that target serious medical conditions.


FDA Matters has already praised changes affecting orphan drugs and accelerated approval. My view is shared by much of FDA and the FDA stakeholder communities; for example: FDA and other leaders, BIO, the National Health Council and the National Organization for Rare Disorders.


So, why attack PDUFA’s bold new efforts on behalf of orphan drugs and patients with serious medical conditions? 


To Dr. Gottlieb, these “legislative fixes” are inadequate because “the agency’s staff will still have wide discretion in determining when to employ these [new] tools.” If overcautious, reluctant reviewers are still in charge, then even Congressional changes in the FDA law will not improve the review process to benefit patients with serious medical conditions.


His proposed solution is to remove the approval of drugs from the review divisions and give that authority to a panel of senior scientists with the “experience and stature to exercise the policy judgment required to make careful decisions about how to weigh risk and benefits…” An even better solution, in his mind, would be to follow the European Medicine Agency’s model in which staff does analysis and evaluation, but the final approval decisions are made by politically-appointed individuals.


I think both of these approaches would severely weaken—if not outright undermine—the existing FDA approval process. This would be particularly unfortunate now, when the new legislation empowers agency leadership to lower the barriers, so that review staff can be more flexible and apply new approaches to evaluating therapies for serious medical conditions.


Conclusions. Before more drastic actions are considered, let’s give the new user fee reauthorization legislation time to work. The ink isn’t even dry!





Many readers were out of town this past Friday and may have missed:


Biosimilars Update: Keys for the Next Year and Beyond   June 22nd, 2012

The biosimilars market in the U.S. will not grow large overnight. By a decade from now, sales of biosimilars will be creating new winners and losers in the overall biopharmaceutical marketplace. In light of this, I was recently asked: what should a developer or investor be looking to achieve over the next year in the area of biosimilars? What should they be looking to achieve in the years after that?  Read the rest of this entry


Spinal Cord Injury—Innovation Measured in Decades, Not Headlines

Monday, June 18th, 2012


We are undergoing a supposed “national crisis” in medical innovation.  Congress, FDA, NIH, and industry are involved in multiple initiatives to “cure” this problem. This is particularly visible now because the user fee reauthorization process is underway, but the state of medical innovation is always relevant because of our headline-driven, crisis-oriented culture. 

To FDA Matters, this approach profoundly distorts medical accomplishment. You can’t use “where are we today” to judge the success or failure of a medical research process that is inherently broad, iterative, uneven, filled with false starts and driven by cumulative success more often than miraculous breakthroughs. As a case in point, I offer efforts to achieve spinal cord regeneration.  

In the mid-to-late 1970’s, I worked for an advocacy group that, among other things, represented the interests of medical research institutions. There was one Congressman on the right committee who was friendly to our cause and with whom we should have had a great relationship.

However, he had two key positions with which we could not agree. He was, simultaneously, the leading Congressional advocate for animal rights and perhaps the only Congressional advocate for spinal cord regeneration. We opposed his position on animal rights because we thought it would hinder medical research.

Surprisingly, we were also against his legislation that would stimulate medical research on spinal cord regeneration. We supported groups promoting the fight against cancer or cardiovascular disease because their proposals allowed NIH significant discretion to determine priorities. In contrast, we were against legislation that would require research on narrow and specific topics, such as spinal cord regeneration.

But our objection (and the vehemence of our objection) went well beyond that. The promise of biomedical research was so great, it was wrong to waste research monies on areas that held no promise.

After all, we thought, spinal cord regeneration was the stuff of science fiction. Despite the death and disability from spinal cord injury—an area of genuine unmet need—there was nothing that could be done. People could dream of a future world where medical science could achieve such miracles, but for the foreseeable future it was wasted money and unfairly gave hope to patients to suggest that spinal cord regeneration was possible.

Flash forward 30 plus years and the Congressman looks like a visionary….and the organization I worked for looks like unwitting advocates for the status quo. A rich base of scientific discoveries has improved supportive care, provided mechanisms for limiting the damage from spinal cord injuries and given reasonable hope that spinal cord regeneration is a possibility for humans in the next 10 to 15 years, maybe sooner. 

To gain perspective on this, along with a sense of NIH’s current commitment to this area of research, go to http://www.ninds.nih.gov/disorders/sci/detail_sci.htm and also follow some of the links from that site.

I don’t think we were fools in 1998 because we couldn’t see spinal cord regeneration as a promising research area. Despite the organization’s considerable expertise, we underestimated how far medical research could take us—given enough time, interest, commitment and funding. Also, in retrospect, it is remarkable how willing researchers are to contribute to a process of innovation and discovery for which someone else might eventually gain most of the credit.

Forgive me if I don’t see the crisis of “medical innovation” about which it is so fashionable to complain.

As a result of the user fee reauthorization legislation and other FDA and NIH initiatives, I foresee a more conducive regulatory environment for development and approval of medically-innovative products, particularly orphan drugs. The goal is to allow more flexibility, while maintaining rigor. However, these process enhancements are only valuable if there is a wealth of medical innovation, not a dearth of it.

There is more innovative medical research being done today than at any time in history. But the truly great achievements are usually built on many people’s work undertaken over many decades—and until near the end, they hardly ever rate a headline unless someone is intentionally hyping them. Look beneath the surface and you will find that medical innovation is alive and well and just needs our continued encouragement—via regulatory and funding support.  


PDUFA Reauthorization: Major Upgrades for Orphan Drugs

Wednesday, June 13th, 2012


Congress is to be congratulated on its progress toward passage of user fee reauthorization legislation. House and Senate-passed versions are being reconciled by staff, with a few fairly tough issues yet to be resolved. There is no apparent barrier to a final piece of legislation later this month or during July.  

One of the big winners in this process has been the rare disease/orphan drug (RD/OD) community. Notwithstanding a few remaining (minor) disputes in the RD/OD space (more on this later), the final legislation will contain the strongest set of improvements for the community since the original 1983 Orphan Drug Act.

The RD/OD community had three overriding objectives during the multi-year process of hearings and negotiations that culminated in the House and Senate-passed legislation:

  • FDA flexibility in reviewing orphan drugs
  • Resources  and process improvements for development  of biomarkers/pharmacogenomics
  • Overhaul of the humanitarian device program

The community achieved all three plus a number of additional items that will also be part of the final package.  

The Commissioner’s Commitment Letter. The user fee agreement is only partially contained in the law—much of the detail is in a commitment letter signed by the Commissioner. As part of this, FDA agreed to the Rare Disease Initiative, which includes:

  • increased staffing of the CDER/CBER Rare Disease Programs (RDP) (which provides expertise in orphan drug development to the product review divisions)
  • increased FDA efforts to assure that product reviewers, industry, and patients are working together
  • broadening  research and programming in the areas of non-traditional clinical trial design, endpoints, and statistical analysis associated with orphan drug development
  • enhanced staff training for reviewers with specific regard to approval of drugs for rare diseases
  • better integration of RDP staff into review teams

When the PDUFA legislation becomes law, these will be firm commitments that FDA must carry out for Fiscal Years (FY) 2013 (starts October 1, 2012) through FY 17.

Other RD/OD Priorities.  A number of other proposals, critical to the RD/OD community are in both the House and Senate bills:

  • establishing procedures for faster review and more flexibility for promising therapies for unmet (orphan) medical needs. This will be accomplished by:
    •  updating and codifying FDA’s existing accelerated approval process, and
    •  adding a new process to speed development of drugs demonstrating strong efficacy in the early stages of clinical development (the Breakthrough Act).
  • encouraging greater use of the existing, successful Humanitarian Use Device (HUD) program. The reauthorization legislation expands the scope of HUD (adult and not just children’s devices) and allows companies to make a profit.
  • permitting FDA to use a wider range of experts and to use the government-wide standards for assessing conflicts of interest
  • re-authorizing and improving the Orphan Drug grant program.

The Remaining Issues. There are three RD/OD issues that differ between the bills.

The first is in the Senate bill and tries to expand and strengthen the patient voice in FDA discussions. FDA is already doing this. However, the agency has a weak understanding of how much risk some rare disease patients might be willing to bear in order to have even a small possibility of benefit. Patients need to be heard in this debate. I hope the House agrees to this provision.

The second provision is in the House bill. It would revise the accelerated approval process to allow its use when there is little or no data on a rare disease with a particularly small population. I think these represent situations where FDA can best judge each situation themselves rather than being prodded into what might well be an unscientific review process. I hope the Senate does not adopt this provision.

Finally, the House has included a pilot program to encourage development of drugs and biologics for rare pediatric diseases. There are some questions about how this will work, so making it a pilot program makes sense. I hope the Senate agrees to this provision.  


About once a year, I check on progress in bettering the lives of people with rare diseases:

A Well-Funded FDA: Only if Congress Stands Behind its Own Words

Monday, June 4th, 2012


This week, FDA Matters raises the delicate question: can Congress be counted to act upon its own words supporting the FDA? This is desperately important as Congress makes decisions on FDA’s FY 13 funding and possible sequestration.

 Over the last few weeks, the Senate and the House have passed the FDA user fee reauthorization legislation by large bipartisan majorities with almost no opposition. Both bodies have extolled the importance of the FDA. The urgency of it funding needs have been fully acknowledged. The incredible breadth of support for the agency has been counted and documented. But will Congress provide the funding to back this up?

The single most important determinant of FDA’s success is whether it has the money to carry out its responsibilities. Yet, this is a very tough environment for any agency to receive funding increases.

So, it was particularly encouraging that the FDA’s cause became linked to J-O-B-S during House passage of the user fee legislation. The House Energy and Commerce Committee fact sheet on the legislation begins:

The United States has led the global medical device and biopharmaceutical industries for decades.  This leadership has made the U.S. the medical innovation capital of the world, bringing hundreds of thousands of high-paying jobs to our country and life-saving devices and drugs to our nation’s patients.  U.S. medical device-related employment totals over 2 million jobs, and these are good, rewarding jobs as employees in the device industry earn an average of $60,000 per year.  The U.S. biopharmaceutical industry is responsible for over 4 million U.S. jobs. 

The media has noted that the user fee legislation assures FDA of nearly $6.5 billion in industry monies over the next 5 years. This is indeed a lot of money. FDA will need every dollar of it to meet the commitments it has made in writing to use these monies on specific activities and on achieving specific performance benchmarks.  

User fees, then, are basically set for the next five years. However, they only supplement the funding FDA needs to carry out its responsibilities. FDA CANNOT LIVE BY USER FEES ALONE.  

To conduct the bulk of its functions, FDA received a budget authority (BA) appropriation of about $2.5 billion in FY 12. This is taxpayer, not industry, monies. Assuming a very modest 6 % annual increase in costs and responsibilities each year, FDA will need about $150 million more to meet its responsibility in FY 13. Additional 6% increases would be needed annually in succeeding years.

Using the 6% annual growth and projected out to five-years–as has been done for the user fee monies–FDA will need a total of $15 billion in non-user fee, BA appropriations from FY 13 to FY 17.  This is in addition to the industry contribution of $6.5 billion over the same 5-year period.

Prospects for 6% increases, even in the first year (FY 13), do not look good. The Senate is recommending only a 0.5% increase for FY 13 (about +$25 million of the needed 6% increase of $150 million). The House appropriations subcommittee is marking the bill up later this week. There is no reason to be optimistic since the House is operating under a total budget ceiling that is much lower than the Senate.

Even worse, the BA appropriations portion of the FDA budget faces a potential January 2013 sequester (automatic across-the-board reduction in most federal discretionary spending) of about 8% of BA funds ($200 million).

If the sequester occurs, FDA would be provided only $2.3 billion in FY 13, taking the agency below the funding level it had in FY 10. Even if 6% increases were to start in FY 14 after an FY 13 sequester, FDA would receive only $13 billion in BA funding from FY 13-17. That is about a $2 billion gap in BA funding over 5 years, solely as a result of the possible FY 13 sequestration. 

The modest $15 billion, 5-year estimate for BA appropriations (based on 6% annual increases) does not account for the costs of the Food Safety Modernization Act.  Nor does it account for the increased non-user fee responsibilities Congress has incorporated in the user fee reauthorization legislation (e.g. provisions to deal with drug shortages). Further, the FDA’s job becomes larger and more difficult each year (globalization, more complex science) so that the agency budget should increase by more than 6% each year.  

This brings us back to the delicate question we began with: will the Senate and House stand behind their own words about the importance of FDA and its role in job-creation and the economy?  If so, Congress needs to appropriate more money for FDA in FY 13 and each of the succeeding four years and it must exempt FDA from any sequestration.  


For purposes of disclosure: I am one of the founders and serve as Deputy Executive Director of the Alliance for a Stronger FDA, www.strengthenfda.org. It is the only multi-stakeholder (consumers, patients, health professionals, industry) that advocates for increased FDA funding. Our strength is in the breadth and number of our member, so I urge you to contact me for more information about belonging. Contact me at sgrossman@strengthenfda.org.


Note that my duties with the Alliance are in addition to, and apart from, the work of my policy and regulatory consulting firm, HPS Group, LLC, which is the publisher of FDA Matters.  The views expressed in FDA Matters are my own, and those of HPS Group, and are not the views or positions of the Alliance.

Biosimilars and the U.S. Supreme Court: FDA Program Could Be Nullified

Tuesday, May 29th, 2012


The U.S. Supreme Court will rule on the constitutionality of the Affordable Care Act (ACA) (also known as ObamaCare) no later than early July. One of the possible results is nullification of the entire Act, although FDA Matters thinks this is the least likely outcome.

Nonetheless, the U.S. biosimilars law—passed as a separate section of ACA—could be rendered void if the Supreme Court overturns the entire ACA. Where would that leave FDA? What about those companies that have invested hundreds of millions of dollars to be part of the emerging U.S. biosimilars marketplace?

Controversy over The Affordable Care Act. The ACA, passed in March 2010, creates a comprehensive national approach to the problems of access and affordability of health care.  While not a pure “national health insurance” program that would be recognizable in most of the world, it is more far-reaching than any prior U.S. health legislation since the creation of Medicare (for the over-65 population) and Medicaid (a federal-state program for the poor) in the mid-1960’s. Numerous cost-containment provisions are also included in the ACA.

The ACA nearly didn’t pass Congress at all….and heated opposition has not lessened since its passage. A number of lawsuits have attacked the constitutionality of the law—with the leading case being led by the attorneys general of about 20 states. The US Supreme Court listened to oral arguments earlier this year and will decide the case before it adjourns in early July.

Biosimilars at Risk.   The Supreme Court may uphold the entire law as constitutional. Or they might decide only specific parts of the law are unconstitutional, none of which relate to biosimilars.  In either scenario, FDA will proceed with its current plans to implement the biosimilars law.

However, the Supreme Court might decide that a constitutional problem with one part of the law (e.g. mandating that individuals buy health insurance) is so far-reaching that the entire law is unconstitutional. In this last situation, FDA might be stripped of its authority to implement the biosimilars program enacted into law as part of ACA.

Little Precedent on What Comes Next. The Supreme Court rarely rules that Congressional actions are unconstitutional. When it does so, the Court usually looks for the narrowest Constitutional grounds possible—trying to preserve as much of the legislation as it can. This makes it most likely that biosimilars will survive the Court’s review. It also means there is little precedent as to what would happen to the biosimilars program if the ACA is invalidated in its entirety.  

One possibility is that FDA has innate authority to create and regulate a category of biosimilar drugs and does not need a legislative grant of authority.  This was discussed when Congress was first considering biosimilars legislation seriously in 2007 and 2008. At the time, FDA wisely deferred on the question, stating that it wanted Congressional guidance (meaning legislation). 

Should the law be overturned, the “innate authority” question might be re-raised, allowing FDA to continue with little or no change in its plan. The agency might even argue that Congress has given the agency guidance—treating the language of the 2010 law as a directive rather than a mandate.*

There is no hint as to whether FDA is thinking along these lines. When I asked FDA, I was told: we are confident that the Affordable Care Act is constitutional.

Failing a decision by FDA that it has the innate authority to approve biosimilars, it would fall to Congress to find a way to restore the program by legislation.  According to the trade publication, FDA Week, biosimilars’ leader, Hospira, is gearing up to pursue a legislative re-enactment should the Supreme Court overturn the biosimilars program. The Biotechnology Industry Organization (BIO) and Congress would also want to assure there is a biosimilars pathway.**

The problem: legislative re-enactment might not be so easy. While Congress is generally happy with the current biosimilars law, it was the product of a series of compromises and political maneuvering that left winners and losers. Merely re-adopting current law might prove surprisingly difficult.

Meantime, we all await the Supreme Court’s decision. And it’s safe to say that no one in the bio-pharma community is looking forward to the possibility of a new fight over biosimilars.


* There is no lack of support in Congress for the biosimilars program. Both the House and Senate versions of the user fee reauthorization legislation contain a new user fee to cover part of FDA’s costs for reviewing applications for biosimilar products approvals.

** For those with subscriptions to FDA Week, the article can be found at: http://insidehealthpolicy.com/FDA-Week/FDA-Week-05/11/2012/hospira-to-pursue-biosimilars-bill-if-scotus-strikes-down-health-care-law/menu-id-721.html

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