Pharma industry shuns Trump push for radical shift at FDA

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By Deena Beasley

<span class="articleLocation”>U.S. President Donald Trump’s vow to roll back
government regulations at least 75 percent is causing anxiety
for some pharmaceutical executives that a less robust Food and
Drug Administration would make it harder to secure insurance
coverage for pricey new medicines.

The prospect of big change at the regulatory agency comes as
drugmakers are under fire for high prices, including Marathon
Pharmaceuticals LLC, which said Monday it was “pausing” the
launch of its Duchenne muscular dystrophy drug after U.S.
lawmakers questioned its $89,000 a year price.

Industry trade group Biotechnology Innovation Organization
told Reuters that during high-level discussions with Trump
advisors, lobbyists urged the administration not to name a new
commissioner of the Food and Drug Administration who would act
rashly to speed up the agency’s approval of new medicines.

That sentiment was echoed by executives at more than a dozen
pharmaceutical and biotechnology firms, who told Reuters that
the FDA is already adopting new drug development models and
warned that a looser review process would put patients at risk.

“People often argue that the FDA is too restrictive,” said
Roger Perlmutter, head of research and development at Merck & Co
Inc. “We have the sense that the balance is pretty right
… you have to have a well-characterized risk/benefit profile.”

That stance underscores the unique position the drug
industry finds itself in when it comes to regulating its
products. While most sectors welcome less oversight, drugmakers
say a robust review process is critical in convincing physicians
and insurers that a pricey new medicine has value.

Otherwise, the time and money it takes to get a new drug to
market – estimates run as high as $2.6 billion – would be lost
if insurers are not willing to pay for the product.

“It is great that the administration is seeking deregulation
… to make sure the private sector can be more competitive,”
said John Maraganore, chief executive officer at Alnylam
Pharmaceuticals Inc and co-chair of BIO’s regulatory
committee. “But payers are looking for evidence of value.”

He said the FDA should speed the approval of lower cost
generic versions of drugs that have lost patent protection, but
warned that allowing novel products to be launched without
extensive testing could be dangerous.

“Any change at the FDA that allows drugs to be tried out on
patients without clinical evidence is a damaging approach,” said
Jeremy Levin, chief executive officer at Ovid Therapeutics Inc.,
which is developing drugs for rare diseases.

Health insurers are pushing back against high-priced drugs.
Sales of expensive new cholesterol drugs from Amgen Inc
and Regeneron Pharmaceuticals Inc have stalled as
insurers limit coverage until they see results of trials
designed to prove that the drugs significantly lower the risk of
heart attack and other cardiovascular crises.

“It is one thing to get a drug approved, but you have got to
get reimbursed,” said Paul Perreault, CEO at biotech company CSL
Ltd, adding that won’t happen unless payers see proof
that a new drug is better than what is already available.

To be sure, some pharmaceutical executives have been vocal
about the need for deregulation. Reducing regulation “will help
with drug prices, because it will induce more competition,”
Pfizer Inc CEO Ian Read said on a recent conference

After top executives at Merck, Johnson & Johnson and
others met at the White House last month with Trump, who pledged
to “streamline” the FDA, industry trade group Pharmaceutical
Research and Manufacturers of America said the meeting found
common ground such as tax reform, and removal of outdated
regulations. The trade group declined to comment on changes at
the FDA.

The prospect of a shake-up at the FDA is being welcomed by a
new class of investor with ambitions to disrupt the current drug
development model, in which larger pharmaceutical players often
buy or license early-stage medicines, and reap the bigger
rewards if they succeed.

“The system we have now has its roots 50, 60 even 70 years
ago … it has become incredibly expensive,” said Tim Shannon,
of venture capital firm Canaan Partners.

He supports the notion that some prescription medications
could reach the market, possibly at discounted prices, once
testing shows they are safe. If such controlled usage indicates
that they are also effective, prices could then be raised.

“We want to make healthcare itself more efficient,” he said. “Let the marketplace decide how valuable a drug is.”

The fate of deregulating the FDA will be driven by its next
commissioner. President Trump said last month he has a “fantastic person” lined up for the role.

Candidates, according to sources close to the
administration, include former FDA staffer Scott Gottlieb, and
Jim O’Neill, a colleague of Trump supporter Peter Thiel who has
advocated for allowing some medicines to reach the market once
they are shown to be safe, even if there is scant evidence that
they work.

A recent survey of drug company executives conducted by
Mizuho Securities found that 72 percent said Gottlieb should be
Trump’s pick to head the FDA.

“There is no groundswell of movement for change,” said
attorney Jim Shehan, head of Lowenstein Sandler’s FDA regulatory
practice. “The industry likes certainty.”

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