Fda Reform Redux On Business Models, Regulatory Reform And Safety

Thinking about Life Sciences: FDA Reform Redux: On Business Models,...

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Thinking about Life Sciences http://blog.aesisgroup.com Saturday, July 07, 2007 FDA Reform Redux: On Business Models, Regulatory Reform and Safety

The topic of FDA reform covered in this blog (previously addressed in a June 12th “FDA: Tortoise, Hare or Something Else” posting) appeared over two weeks before a June 28th Economist article “Beyond the blockbuster” (PDF) and its accompanying leader “From bench to bedside” (PDF). Moral: if you want a two week heads-up on what’s in the news, this blog may be a good place to start. There are two sides to the FDA reform problem (and its solution): (1) business models need to change and (2) regulatory frameworks need to be reformed. Business Models Need to Change Many have already commented on the dearth of drugs in development (the so-called pipeline problem) and I, too, have piped in (no pun intended) on the issue with my previous article “KKR Buys First Data: On Private Equity, Pipelines, Development.” The table below from the “Beyond the blockbuster” Economist article shows very clearly the profound disconnect between research investment and pipeline output.

There are essentially two problems underlying the pipeline issue: 1. The Scientific problem: As outlined in the KKR article (but not in the Economist), we do not fully understand at a fundamental level how drugs really interact with their target molecules. As the renowned Harvard chemist – George M. Whitesides – noted: “… we find that our current theories – of complex, tightly coupled kinetic networks, of protein-ligand binding … of noncovalent interactions and so on simply do not work.” In this sense, new business models will not change things but rather new scientific paradigms. That, of course, is a whole other topic which will be addressed in this blog but not in this posting. Stay tuned ... 2. The Business problem: The Economist article does, however, point out that the traditional pharmaceutical business model based on the blockbuster drug is rapidly leading to extinction.

11/17/2008 12:44 AM

Thinking about Life Sciences: FDA Reform Redux: On Business Models,...

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Many reasons are cited including the fact that many such blockbusters are going off patent, that the research to find new ones is increasingly unproductive (c.f. point 1 above) and that generic drug manufacturers are increasingly encroaching upon patents. Ironically, the Economist misses perhaps the most important reason why the blockbuster model is near death. That is with the largely indiscriminate target populations and long-term, chronic administration that defines blockbusters in the first place also renders them highly susceptible to safety issues. It amounts to simple statistics: if you give a drug to enough people for a long-enough time, safety is bound to be an issue. Hence the solution to the business problem has been for companies (such as Roche acquiring various diagnostics firms) to embrace personalized medicine which also holds the promise (but not the entire key) to solving the safety problem. Bottom line: Business models will change. Personalized medicine will gain ascendancy and because personalized medicine requires to some extent convergence of diagnosis and therapeutics, the fields of theranostics and convergent medical technologies (CMT) will become increasingly important. CMT, of course, is a special focus of this blog. However, the question remains: are the regulatory authorities (in particular, of course, the FDA) progressing hand-in-hand with these inevitable business model changes? Regulatory Frameworks Need to be Reformed The main focus of my June 12th article was to focus on FDA Reform and addressing, in particular, the issue of safety. The proposal (which overlaps with some of the suggestions in the Economist article) can be summarized as follows: Efficacy would be determined in the market as it is in the European, off-label, and vitamin world. Some may argue that we need a strong, efficacy-driven FDA. But remember that in 1962, communication among and between clinicians, scientists, and the broader market was much less open and transparent than it is now in today’s Google and YouTube era. It is unlikely that blatantly ineffective treatments will gain significant traction in such a market especially because academic peer review and market-driven judgments can be more efficiently transmitted to all providers. Truth-in-advertising laws would need to be upheld (and indeed enforced aggressively) and just as with off-label use, manufacturers would be prohibited from making any specific efficacy claims. The suggestions in the Economist were very similar – proposing an increased emphasis on safety (mainly through rigorous post-launch testing and surveillance) and enhancing the efficiency of information sharing that would enable the efficacy transparency mentioned in my own proposal. We differ in that I would propose even stricter regulation (and accompanying oversight) regarding safety evaluations at the pre-clinical and pre-launch stages and not just leave that level of rigor to the later stages of commercialization. I think that the level of rigor also needs to extend to what sorts of patients can or cannot take the medication in order the market can have confidence in essentially testing out the efficacy in the smaller populations necessitated by personalized medicine. As it becomes increasingly impossible to conduct clinical trials for small, personalized patient pools with any degree of speed or statistical conclusiveness (in fact as medicine becomes more personalized, the results become more deterministic and less statistical) then we need to relax the regulations regarding efficacy but, in fact, strengthen the regulations regarding safety – both at the pre-launch and post-market stages of development. The Connection between Business Transformation and Regulatory Reform The themes of business transformation and regulatory reform run together and they are connected by the thread of safety. The blockbuster model is untenable because of a host of business-related changes but perhaps most profoundly by the fact that statistically-speaking blockbuster drugs treating huge populations over chronic periods are likely to raise safety issues that cannot be ignored. Likewise, the crown jewel of the FDA – one that makes it different than any other medicines regulatory agency – is the strict application of an efficacy requirement for drug approval. As this hurdle becomes harder and harder to overcome, more and more resources are flung at the problem which means (as pointed out in my June 12th article) that in a world of limited resources, safety suffers. Changing the business model and reforming the FDA are two sides of the same coin and the coin itself – as in the Hippocratic aphorism “First, Do No Harm” - is minted in safety.

11/17/2008 12:44 AM

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Ogan Gurel, MD MPhil [email protected] http://blog.aesisgroup.com/ Convergent Medical Technology Convergent medical technologies health policy FDA reform personalized medicine clinical trials drug device safety Combination Medical Products Aesis Research Group Ogan Gurel MD

11/17/2008 12:44 AM