Donald Trump's administration will redirect the FDA, tackle the price of prescription drugs, and repeal, if not immediately replace, the Affordable Care Act, a panel of biopharma leaders, advocates, and observers predicted yesterday.
How dramatically the FDA changes direction under Trump will have consequences beyond the agency, affecting biopharma industry growth and investment in early-stage companies, one panelist warned.
Jonathan Leff, a partner with Deerfield Management, a healthcare investment firm that manages more than $7 billion in funds, noted that some people speculated publicly as potential nominees have called for the FDA to regulate drugs only for safety and not for efficacy as well, breaking with agency practice stretching back to the 1962 Kefauver-Harris amendment to the Federal Food, Drug, and Cosmetic Act.
“If that were to change, it would really mark a fundamentally different path in terms of how we think about developing drugs and marketing drugs in this country. A major change like that would have very, very negative, potentially disastrous consequences for biotech investment and the biotech industry,” said Leff, who is also chairman of the firm’s Deerfield Institute. “Talking to biotech CEOs and senior executives and investors, there’s a sense that the FDA environment that we have works quite well.”
Leff was one of five panelists who discussed what the industry can expect from the Trump administration during a panel talk held during the Biotechnology Innovation Organization (BIO)’s CEO & Investor Conference, held at the Waldorf Astoria hotel in New York .
Alex M. Azar II, who until last month was president of Eli Lilly’s U.S. entity Lilly USA, said Congress can be expected to pass bills labeled as curbing drug prices and repealing Obamacare given the attention Trump has focused on both issues.
“That’s sort of the way government works: When the president repeatedly says something, eventually the government will do something,” said Azar, who was deputy secretary of health and human services during 2005–2007.
The drug-pricing issue resurfaced last week with news that Marathon Pharmaceuticals set a sky-high $89,000-a-year price—$54,000 after rebates and discounts—for its new Duchenne muscular dystrophy treatment EmflazaTM (deflazacort). Under fire from critics, Marathon delayed the launch Monday.
Among avenues Azar said Trump could pursue to lower drug prices are speeding up generic drug approvals, cracking down on formularies whose reimbursement decisions drive away people with chronic diseases, and issuing guidance through the Internal Revenue Service on how employers can cover preventive-care drugs without a deductible under high-deductible plans.
He said a Congressional replacement for Obamacare is likely a long-term effort, citing U.S. Senate Committee on Health Education Labor and Pensions Chair Lamar Alexander (R-TN) opposing repeal without replacement, or a revival of the 2016 repeal bill vetoed by President Barack Obama. Trump is pursuing shorter-term fixes for some Obamacare provisions; his administration has submitted to the Office of Management and Budget a proposed rule, not yet publicly released, intended to stabilize the individual insurance market.
Azar said Trump’s recent meeting with industry leaders suggested he will take an industry-friendly approach to biopharma despite his rhetoric about unacceptable prices: “The president made this very clear: Respect innovation. Respect the need to invest in innovation. Respect the work that people in this room do. I simply do not see efforts to undermine that.”
Brian Rye, senior healthcare analyst with Bloomberg Intelligence, said Trump’s administration and Republican Congressional leaders were likelier to apply a lighter regulatory hand on the biopharma industry—such as speeding up FDA reviews of new drugs that have won approval in Europe—than to upend the efficacy standard.
“I don’t think that the Kefauver-Harris amendments are going to be repealed any time soon, so I wouldn’t worry necessarily about that,” Rye said. “The idea that the FDA’s not going to be judging efficacy, I think that’s probably a bridge too far and not one that we’re going to see.”
What industry will see, panelists agreed, will be the crafting of a sixth Prescription Drug User Fee Act or PDUFA VI, to succeed the fifth version of the law, which expires September 30.
“We’re going to be working very hard to make sure that PDUFA is accomplished in a timely fashion this year,” said Jeanne Haggerty, svp, federal government relations for BIO. “Getting a PDUFA done in a very efficient timely fashion, working with the FDA to let them know that there are ways to speed up drug development to make it more efficient without revamping the entirety of the FDA will be something that we are laser focused on.”
Some measures to speed up drug development, Haggerty said, were in the 21st Century Cures Act enacted in December by Obama after it passed Congress with overwhelming majorities. The law includes $500 million over 10 years for the FDA, in part to fill 600 vacant positions, and calls for FDA to establish a streamlined data review program and allow approval of new indications for a previously approved drug based on “real world” evidence from clinical experience in place of evidence from clinical trials.
