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Published in conjunction with the Wharton Health Care Business Conference
in the Wharton Health Care Journal, Pulse.
PULSE: How has the regulatory environment for the pharmaceutical and medical device industry changed over the past 10 years? What have been the major drivers of these changes?
AvE: The change process is profound and radical, and it’s not just affecting the pharmaceutical and medical device industry. It’s affecting the entire domain of health, health care delivery, and health care products. The fundamental reason for this is that we’re really going into an entirely new reality as it relates to health and health care. It’s a reality that’s based on what I describe as the molecular metamorphosis. So, the point of this, from a high level perspective, is that we have been practicing medicine in the past, in a model where all we could do was observe the manifestations of disease. Once we moved into the era of genomics and molecular medicine, we’re now beginning to understand the fundamental mechanisms that are responsible for those diseases. So, we’re not only observing, we’re understanding. And those insights have created an entirely new portfolio of products that are able to impact disease or, more importantly, impact the preservation of health. So, what you’re seeing in the pharmaceutical and medical device industry is a radical transformation that is a direct result of the progress that has been made in science and technology that’s given us an entirely new and different perspective on the purpose of those products – how they impact human life, health and disease. So, we’re seeing that from the regulatory perspective. We’re seeing science as it relates to genomics, science as it relates to new fields like nano-technology, and we’re beginning to recognize that science is leading all of us to a very different place.
PULSE: How do you foresee the regulatory environment progressing over the next decade?
AvE: I think the regulatory environment is going to be an entirely different reality in the next decade than it has been in the past. First of all, you have the impact of what I just eluded to – the impact of radical transformation that is occurring by virtue of advances in science and technology. You have that coupled with the fact that we are now seeing the impact of that science and technology, especially information technologies, that cause us to have to address issues with regards to globalization, and, if you will, to recognize as author Thomas Friedman did, that indeed The World is Flat. We are now in a global market place rather than in a local or national market place. So, we have to look beyond our borders. We have come to the realization that things are no longer made in the USA or made in any other part of the world. They’re more often than not assembled in a given location, while the parts and components come from a whole variety of places. You look at some of the parts and pieces that go into many of the cardiovascular devices and you find wires in the leads are coming from one country, and the batteries are coming from someplace else, and the software is from an entirely different place, and somewhere in Boston they put that all together. It creates an entirely new environment in which we have to work. The complexity of the products is increasing.
Think of miniaturization and what implications that has – as these devices get smaller, their complexity increases. You look at combinations of drugs and biologics that become solutions to problems. There is a rare patient that’s taking one medication. There’s a rare disease that’s going to be cured by one single pill. There are no magic bullets. You’re beginning to see the integration of diagnostics and therapeutics into these multiplex platforms. And that’s going to be even more revolutionized by advances I alluded to earlier, such as nanotechnology. Nanotechnology is going to have a dramatic impact on some of these issues. Finally, the regulatory environment is going to be influenced by virtue of this molecular metamorphosis in which the future of health care is not going to look anything like the past than a butterfly looks like a caterpillar. You have to see medicine thru a prism where it’s going to personalized, much more predictive, much more preventative, and much more participatory where patients are going to be actively engaged on a continuous basis in their care, rather than episodic recipients of care. So, you’re going to see the environment dramatically and radically change.
I think one of the big challenges that you’re focusing on at a school like Wharton is how to put this into context of the reality that all of this is embedded in a business model. Without the business model, without the entrepreneurship, without the financial return on investment, etc, you don’t have viable, sustainable progress. So, there is in fact a need to rethink the models. Companies have built models around finding the blockbuster, magic bullet drug and are now realizing the need for change, much like the computer industry did. There is always somebody who is going to make a microprocessor. There is always going to be some company out there making a CD-ROM. But the fact of the matter is that as a consumer I could care less about your microprocessor or your CD-ROM. What I want is for you to put that all together into a laptop. I want the laptop. Patients are going to want solutions to their problems, and those solutions are almost invariably going to require the sharing of intellectual property from a variety of sources that put a drug, a vaccine, a monoclonal antibody, and a diagnostic platform together. They want someone to suddenly say, I have the solution for the detection, intervention and modulation of Alzheimer’s disease.
PULSE: Some argue that personalized medicine is the wave of the future for the health care industry as the block-buster model continues to falter for pharmaceutical companies. How large an impact does the FDA believe personalized medicine will have on both the regulatory environment and the health industry as a whole? Is the FDA taking measures to promote the development of personalized medicine studies or is it reacting to industry changes?
AvE: The real important issue for the FDA is that the FDA has to be a bridge and not a barrier to this new future. We have to be creating a regulatory pathway that actually facilitates this kind of progress. So, I see the FDA’s role as not being passive or simply waiting until somebody arrives on our doorstep with a new innovation or new product, and then we have to make a regulatory decision about it. But actually, we need to be out in the front helping to provide the kind of leadership that will enable us to understand what the new future will look like, and how to facilitate and create a regulatory pathway that is going to promote the discovery and development of those products. We need to provide leadership on how that can be brought to patients in the most efficient and effective way, while still ensuring that those interventions are appropriate, effective, and at minimal risk. So, I don’t see us standing by as spectators. I see the FDA taking a very strong leadership role.
We’ve done some things like our Critical Path Initiative, which is intended to bring this new science and these new tools of technology into this regulatory pathway and process. To work proactively on the front end by engaging with developers and discoverers, and helping to align that in a way that those products are coming into the regulatory pathway with us knowing as much as we possibly can about them at the molecular level so we can make better decisions about them. What we’ve done over the past year with the exploratory IND process is intended to provide that kind of leadership. I think we have to do a number of things along those lines. Patients have always wanted personalized medicine. I practiced medicine at the University of Texas M.D. Anderson Cancer Center for 26 years. Every patient who came in to see me with cancer knew that there was chemotherapy, knew that there was surgery, knew that there was radiation. What they wanted to know was what was best for them. Patients expect personalized medicine. So, this is not a new concept. What is new is that for the first time we actually are beginning to have the tools to really do that. I mean, my mother-in-law has always known that suggestion, “Take two aspirin and call me in the morning,” can’t be right for everybody. We all can look around, see our differences, and realize how can two aspirin be exactly right for everybody? Well, it’s not. Be we never had the tools to figure that out. Now you can look at people from a genetic profile and recognize that they have different genes for the metabolism of aspirin.
We’ve just done a study, in terms of our leadership position, looking at a blood thinner, warfarin, and how to use genomics to appropriately dose that drug so that you get the right amount of drug for the right patients and you get the right outcome. We know that everything you put in your mouth has a potential benefit and a potential risk. You can take one aspirin tablet and it can have a benefit and it can have a risk. So, there is no drug that is ever guaranteed 100% safe, no drug that is guaranteed to be 100% effective. In the past, we have relied on a trial and error approach through clinical trials to try to figure out what the right balance is. How much of this drug gets me a good effect without unacceptable side effects. Warfarin happens to be one of those kinds of drugs where that range is very narrow. It’s very easy to under-dose it, and it’s very easy to over-dose it. You just don’t have that much room on either side. With aspirin, you’ve probably got a fair amount of latitude, but you don’t with a drug like warfarin.
So, from a Wharton School point of view, what’s the problem with warfarin? Well, the problem with warfarin is that you’ve got a model that has a great deal of waste built into it. There’s going to be a distribution curve in which many patients are not going to get enough warfarin, in which case they are going to have clots and will continue to have strokes and pulmonary emboli. So, you’ve got a huge cost associated with that because you haven’t given the appropriate amount of med. Then you have on the other end of the curve a group of people who are taking too much so they are not forming any clots at all. They bleed – they bleed from their stomachs, and they just have a huge variety of problems. So there again you have huge costs.
So, when you look at our health care system, and you ask, ‘What’s one of the fundamental problems with health care?’ it’s the same way the Japanese looked at the problems associated with building an automobile. The biggest problem as it related to cost was waste. The cheapest way to build a car is to build it perfectly in the first place. The best and most effective cost model in medicine is to get the right patient the exact right amount of drug to get the exact right outcome. The quality goes up. It’s optimal because the patients are getting optimal care, and the waste goes out of the system because you don’t have complications. The most costly drug is the one that doesn’t work or the one that kills you. I think these are parts of the story of where we are going with personalized medicine – how we are going to use modern science to make better decisions, better regulatory decisions, better medical decisions, and how we can provide optimal solutions to patients’ problems.
PULSE: In what ways, if any, will your regulatory forecast be impacted by the outcomes of the 2008 presidential elections?
AvE: I don’t think that politics is going to affect the outcome of what we have been talking about. I think the fact of the matter is this process is underway. It’s not being driven by politics. It’s being driven by science and technology. And that progress is going to continue. So, the drivers of change are in place, and politics is not going to alter that no matter who gets elected President. Having said that, who gets elected President will have a great impact in terms of where this process goes, with regards to its pace and its direction. I think it is extremely important that whomever the next president is that they recognize that this process is occurring. It is underway, and there are with it both challenges and opportunities. And this country is going to have to address its leadership responsibility in that process in terms of where is it going to go. Is the U.S. going to continue being a leader or follower? Because you know what, it isn’t like this is a secret! And it isn’t like the rest of the world doesn’t know what we’re talking about. Europe is making huge investments in this area. I’ve just been in China and I happen to know their Minister of Health – he’s a world renowned CA researcher, member of our U.S. National Academy of Science and Institute of Medicine – you think this is a secret to him?! So, everybody in the world knows where this is all going in terms of the drivers. What the world is looking for is who is going to lead? And I think the outcome of the next election is important as it relates to leadership and the future direction, but it isn’t going to change that this process is occurring. It is occurring, irrespective of a presidential election.
PULSE: Does the FDA publically support one direction over another?
AvE: No, the FDA is here to support the science and to support the process of which science can help lead us to this better place. The FDA is only here for one reason and there are millions of people out there whose health and welfare are dependent upon getting access to the things we are responsible for regulating, including the food that they eat, as well as the drugs that they take, and the vaccines that they are giving to their newborns, and on and on. So, our job is to play our role and do our part. But the rest of it is in someone else’s hands.
PULSE: Regulations on the medical devices industry have been increasingly tightened in recent years. Do you anticipate this trend to continue?
AvE: I’m not sure I agree with your premise. I think if we look at our own criteria and our legal basis upon which we’ve made pre-market approvals or clearances of 5, 10Ks, or PMAs, etc, nothing has changed. We haven’t changed the rules. I think what has changed is the tools with which these devices are being developed and made, and the tools with which we are able to make regulatory decisions have constantly and continuously improved. The science and technology we have been talking about has resulted in major changes in these devices as it relates to their complexity. That has put us in the position of having to take a more sophisticated approach to the regulation. Earlier in the conversation I alluded to the concept of miniaturization. You might say a pacemaker is a pacemaker. But you know, that is just not true, because a small pacemaker is fundamentally different from a big pacemaker. You know why? Because the distance between the wires inside the pacemaker gets smaller, and when the distance gets smaller, the possibility of internal short circuits by virtue of the fact that electrons can now jump from one wire to another wire is different. So, can you apply the same regulatory process to a small pacemaker as you would to big pacemaker? The answer is no, you can’t. Now, you might turn around and say, well, the FDA has changed the rules – it’s tightened up its regulatory approvals of pacemakers. No we haven’t. We’re still applying the same regulatory rules. What’s changed is the science. Just as the science made it possible to make a small pacemaker, we’ve got to use the science to make sure that a small pacemaker is not going to be subject to short circuits or problems of insulation, or that sort of thing. We’re seeing bare metal stents now becoming drug eluting stents. We haven’t changed the rules. The product is different. Pacemakers are now biventricular. We’ve got laparoscopic surgeries now going through robotic surgeries. Robotics introduces a whole new level of complexity into approval. So, I think we are still on the same foundation we have always been, which is that our decisions are based on science and they are based on a risk-based regulatory framework that says we will look at the benefits, we will look at the risks, we will look at the balance between the two, we will look at the need that this is intended to address – we will put that all together into an equation and render a decision. That hasn’t changed at all.
PULSE: The cost of drug therapy and other technologies has come under increasing scrutiny. What role should the U.S. regulatory agencies play in terms of overseeing manufacturers’ attempts to measure outcomes related to cost effectiveness?
AvE: First of all, I want to make it clear that the FDA has no role, nor should it have a role, in the pricing of drugs. I don’t believe that is an appropriate area for a regulatory agency like the FDA to be involved in. That’s not to say that the FDA should not be involved in consideration as it relates to cost. Where our regulatory process addresses that appropriately, we have to be thoughtful and mindful. There are a variety of ways in which we actually do that. One of which is, for example, as it relates to choices. So, with regards to generics – generic drug approval is an important part in giving patients access to choices in the market place, and that has an influence on cost. Now, does that mean the FDA is involved in the marketing and pricing of drugs? No. But FDA is acting responsibly to be sure that people have options and that those options could result in people having access to those drugs at lower cost. One other way I believe the FDA could appropriately affect cost is to look at the regulatory process itself.
As I indicated earlier, we are taking an approach of being engaged in the total lifecycle of the products we regulate. We’re no longer sitting here passively waiting for an application to arrive, then when we make a decision, that drug goes into the market place and that’s the end of our responsibility. We are looking at our responsibility as being engaged in the total lifecycle, from discovery and development all the way through delivery. So, on one end we’re engaged in much more post-market surveillance. Post-market surveillance involvement is going to help us understand the appropriate use of those drugs in the real world, in large diverse populations. We’ll be able to start providing better information, better labeling as it relates to how those drugs should most appropriately be used. That gets us back to that model of waste where if we can continuously improve the utilization of a drug and eliminate many of the adverse events that are associated with that drug that has a reduction as it relates to cost. The more efficient and effective the regulatory pathway is, and the more guidance that we can provide, the more it might result in more affordable drugs. Our recent renegotiation of our prescription drug user fees and our medical device user fees provide resources for us to be much involved in pre-market consultations. We can work with companies to help them reduce the risk involved in some of that early development. Everybody talks about the funnel. You start off with a thousand and you wind up with one coming out the other end of the pipeline. But I think the tools of science and technology will now help us to understand these drugs and human beings in ways that will allow us to make better choices even before we subject large populations of patients to clinical drugs, to drugs that don’t ultimately work, and we’ll be able to be much more predictive about which ones will work. I think the FDA has to play a role in that. What will that do? That will reduce the cost of development. That then translates into more options and lower costs available to patients with a wide variety of conditions. If we can do this, then I think we have really fulfilled our mission to protect and promote the public health.
PULSE: Do you have any additional thoughts you would like to share with our readers?
AvE: I have a real affection and appreciation for Wharton. Specifically, I think it’s a great tribute to all of you that you are focusing on this issue of health and addressing it in a way that doesn’t simply focus on excessive health care costs, or how much of our GDP is being spent on health care, etc. Instead, you’re stepping back from it all and asking more fundamental questions: In what direction is health and health care going? What are the drivers and what are the implications? Maybe we ought to be rethinking the whole equation rather than looking at one piece of it. I think it’s a great storyline and something that we can’t quite capture in a brief interview – it really requires an ongoing conversation. So, my hope is that this will be the beginning of a conversation. I hope I accomplished at least one thing with you today, and that is at the end of this interview I’ve created more questions in your mind than I’ve actually answered. I hope you all go forward rethinking the entire system and creating new, unique solutions.