Accelerating Cures by Building a More Effective and Efficient FDA

Kristin Schneeman, Program Director, FasterCures
A distinguished panel of observers from patient organizations and industry declared themselves to be in “violent agreement” on the urgent need to increase resources and build scientific capacity at the FDA, with one panelist calling it of “strategic importance to the country.” Among the points of agreement were:

• FDA suffers from an almost scandalous lack of resources. The agency that regulates 25 cents of every dollar U.S. consumers spend has a budget that is half what Americans spend every year on potato chips.
• Scientific capacity at the agency is very weak and is inhibiting the agency’s ability to evaluate new therapies moving through the pipeline.
• The agency badly needs to be able to collaborate meaningfully with other sectors – what some refer to as the “triple helix” of government, academia and industry – without being constantly “demonized” for conflict of interest.

Gail Cassell, Vice President of Scientific Affairs at Eli Lilly & Co., shared the results of an important review of FDA’s science capacity that she chaired in 2007 as a member of FDA’s Science Board, which put a bright spotlight on the resource constraints under which FDA operates and their serious consequences. “Chronic underfunding of FDA puts American lives at risk.”

Garry Neil, Corporate Vice President at Johnson & Johnson’s Corporate Office of Science and Technology, detailed the risky, unpredictable, and costly pathway to new drug approval, a process that hasn’t changed substantially in 50 years. He reiterated some oft-cited facts – that it costs well over $1 billion to develop an approved drug, and that despite exponential increases in investment by government and industry the number of new therapies approved every year has declined. “There is nothing black and white here. The whole process is about the progressive removal of uncertainty. And there will never be complete certainty.”

Ellen Sigal, Chair and Founder of Friends of Cancer Research and an advisor to many government cancer research initiatives, provided the view of many patient advocates who find FDA impenetrable, with no mechanism in place for patient input, a confusing structure, and a lack of expertise in the places where it’s needed. She said the patient voice is not being heard on Capitol Hill, that concerns (many of them legitimate) about safety were all but drowning out patients’ appetite for innovation, willingness to risk-share, and need for better drugs.

Jonathan Simons, President and CEO, Prostate Cancer Foundation, offered up some interesting models for addressing some of these challenges at FDA. One was for some kind of “honest broker knowledge exchange” within FDA that facilitates collaboration among stakeholders in the system, evaluates all data presented by stakeholders, and creates value through transmission of knowledge. He also proposed that FDA have a sort of “amicus curiae” process, as they do in the court system, to allow meaningful input by stakeholders other than regulated industry.

Cassell held up as a success story the development of anti-retrovirals to treat HIV – 29 new therapies approved in relatively short time, achieved when stakeholders worked together across sectors with optimal speed. Simons noted that a significant reason for this success was leadership – that Anthony Fauci at the National Institute of Allergy and Infectious Diseases had responsibility for addressing the crisis and invited in the patient community to provide guidance. Can this success be replicated? “It happened with HIV, it can happen again,” said Neil.

The panel ended on a surprisingly hopeful note, with most panelists echoing Sigal’s optimism that “there is a growing recognition that the agency needs more resources, needs collaboration, needs science, and that its science is different from NIH’s science.” All agreed that the public and Congress need to be better educated about the importance and impact of FDA – not only on health but on our economy and national security.

Health Reform: Where Do We Go From Here?

Cecilia Arradaza, Communications Director, FasterCures

With the health reform law in place, participants joining this year’s Milken Institute Global Conference had more questions than answers about its implications. A second panel on health reform convened Tuesday (Read Summary of Monday Health Reform Panel) looks at cost, coverage, and consequences.

“Cost comes from price [of health care] and utilization,” said Ceci Connolly who covers health policy for The Washington Post. Measures are in place to curb the soaring cost of health care services, like a measure that brings hospitalization costs down by lowering readmission rates by addressing preventable underlying causes. But, “we have a lot to do” when it comes to utilization. The law starts to modify behavior by changing incentives, but it requires broader public engagement.

Michael McCallister, President and CEO, Humana Inc. said that the power of consumers are great and can be leveraged with the right incentives, accurate information, and transparency throughout the health system.

The health reform law has measures in place that will move the country toward “outcomes-driven care,” said Billy Tauzin, President and CEO of the Pharmaceutical Research and Manufacturers of America.

The question now, according to Connolly is “who in the industry is going to innovate?” She noted that “we will see creative, money-making ways” as implementation of different aspects of the law is actualized.

Tauzin said that the law contains protections for biopharmaceutical research if implemented right. To which Connolly pointed out that these protections, the issue of 12-year exclusivity for biosimilars is an ongoing argument among policymakers.

Among the law’s missing links, according to Connolly, was a delay in convening a new Medicare Commission (scheduled for 2014) to examine and improve the Medicaid dental coverage for adults, and no “death panels,” which were never “death panels” to begin with.

Tauzin said the law does not address the litigation system to stop ‘defensive medicine.” The fear of liability encourage healthcare providers to overutilize unnecessary health care service which lead to rising costs that do not necessarily bring better care.

Sandy Beaty, Senior Vice President, Public Affairs, Pfizer Inc., said that implementing this complex health reform law is a five to ten year process.

When panel moderator Sage Kelly of Jefferies & Company asked if timing was right, Tauzin said had the Congress and the President not acted, it would’ve take another 10 years to revisit the issue.

Medical Philanthropy: Investing in the Cure Enterprise

by Gillian Parrish, Manager of Alliance Development and Communications, FasterCures

Though philanthropic investment in medical research accounts for only three percent of overall spending, a pittance compared to government and industry funding, it plays a vital role in catalyzing progress. Unburdened by the demands of shareholders, and the legacy mandates of institutional funders like the NIH, nonprofit disease foundations have the flexibility to fund high risk, high reward research that disproportionately accelerates the pace of innovation.

The “Investing in the Cure Enterprise” panel Monday afternoon at the Milken Institute Global Conference explored what’s working in medical philanthropy and how to encourage more philanthropists to invest effectively in the development of new and better treatments for disease.

Melissa Stevens of FasterCures moderated the discussion, noting the important role that medical philanthropy plays in stimulating research in under-resourced disease areas, and bridging the so-called “valley of death” in funding, between basic discovery and later-stage, clinical research.

Panelists from across the philanthropy spectrum agreed that a mix of accountability and measurement in research, together with investments in process infrastructure, would speed the discovery and development of new treatments.

Though perhaps not as “sexy” as disease-specific investments, funding for the development of medical philanthropy process infrastructure—including the sharing of data and best practices across sectors and diseases—is critical to replicating success and learning from failure, noted Matthew Bishop of The Economist. Melanie Schnoll Begun, Managing Director, Morgan Stanley Smith Barney Philanthropic Services, echoed the importance of understanding failures, saying that often in medical R&D, “failures” are actually successes, in that they eliminate ineffective research options and point the way to better cures.

Jane Wales of the Global Philanthropy Forum talked about the growing convergence between the social sector and private sector. “Philanthropists are bringing the rigor of the private sector to the work they do in medical research,” she said, “and the most important thing they can do moving forward is to pass their values along to the generations that follow to drive sustainability towards long-term goals.”

Susan Axelrod of 23andMe, Inc., said: “Philanthropists like us have a high tolerance for risk. We’d rather push the envelope in dramatic ways, even if we might fail, than play it safe.”

Global Conference FasterCures Panels

Watch video of FasterCures' sessions from Monday covering health and medical research at the 2010 Milken Institute Global Conference.

Healthy Living Trends and Advances: Responding to Today’s Wellness Consumer
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Changing Our Health-Care Priorities: Incentivizing Prevention and Cures
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Designing Innovative Medical Research Systems: Patients Are the Hidden Asset
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Accessing Capital for Medical Innovations
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Rethinking Financing for Global Health
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Medical Philanthropy: Investing in the Cure Enterprise
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Rethinking Financing for Global Health

by Loren Becker, Global Health Program Analyst, FasterCures
There is a vital need for creativity and innovation in our thinking about how to fund medical R&D targeting diseases of the developing world, according to a panel of experts from the financial, pharmaceutical, and nonprofit sectors. The discussion focused on innovative financing for global health research and development is part of the health track at the 2010 Milken Institute Global Conference.

Moderator Hannah Kettler, Senior Program Officer and Health Economist at The Bill & Melinda Gates Foundation laid the groundwork for the discussion by invoking the name of the late C.K. Prahalad, who was a leading thinker on the concept of the market at the bottom of the wealth pyramid. Although Prahalad, who died last week, did not focus specifically on health, Kettler drew the connection between his broader concept and the market for new medical tools that target diseases disproportionately affecting the poor in developing countries. The question, according to Kettler, was how to attract more investment of resources, financial and otherwise, from a broader set of actors to help meet the health needs of the poor.

Holly Wong, Vice President of Public Policy at the International AIDS Vaccine Initiative pointed to a proposed product development partnership (PDP) financing facility that would rely on a donor-backer bond issue to generate upfront funding while reinvesting some of the proceeds from product sales into the development of new products. The idea, according to Wong, would build more sustainability into the model and allow for cross-subsidization by directing proceeds from one disease area to potentially fund R&D in another.

Eric Easom, Program Leader for Neglected Diseases at Anacor Pharmaceuticals, represented the perspective of a small, privately-held biotechnology company that is collaborating with several PDPs. Easom said that, for smaller companies, “push” funding, which provides capital to companies looking to invest in R&D for developing country needs, is preferable to “pull” funding, which rewards companies for their successful investments.

Stephen Sands, Vice Chairman of Investment Banking and Global Co-Head, Lazard Healthcare, proposed making the investment climate for neglected diseases look more like the one for orphan diseases, which are very attractive to investors because of preferential payment and taxation environments and active patient populations. Sands felt that the credit markets and venture philanthropy models could provide a source of capital that is better aligned with the high risk nature of investment in medical research than debt instruments such bonds.

The audience also brought a variety of perspectives to the discussion. Robert Sebbag of Sanofi-Aventis provided insight on how major pharmaceutical companies make decisions about whether and how to get involved in global health R&D. When asked about how we can ensure products developed for chronic diseases that affect people in both the developed and developing worlds (e.g., diabetes) are accessible to poor populations, Kettler said efforts to make anti-retroviral drugs for HIV/AIDS more accessible as a potential model; however, she also cautioned that affordability issues need to be addressed early in the R&D process in order to ensure that products are accessible to poor patients in the developing world.