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The future of Drug Development in the US

(Image: By Zach Rudisin - Own work, CC BY-SA 3.0,

Currently, in the United States, there is a situation of uncertainty. Nowhere is this felt more than within the Department of Health and Human Services, and specifically, the FDA. Much of this uncertainty comes from actions by the current Administration here in the US. On January 30, President Trump met with representatives of the Pharmaceutical Industry. Also on the 30th, he signed a new Executive Order affecting how regulations will be created.

Let us first look at the meeting with Pharmaceutical Companies. According to audio from NPR, President Trump has told Pharmaceutical Companies that he will make it easier to get Drugs approved in the United States. So how will he do this? According to his platform, and the nominee for Secretary of Health and Human Services, one way this will be accomplished is to remove the Efficacy requirement from Pharmaceutical approval. Currently, Efficacy in Drugs is regulated in the Food, Drug, and Cosmetics Act of 1938 by way of the Kefauver-Harris Amendment, put in place in 1962. This “Drug Efficacy Amendment”, as it is known, mandated that Pharmaceutical companies demonstrate the safety and efficacy of their product through clinical studies.

If the Trump Administration removes the efficacy requirement for pharmaceuticals, it will be disastrous. While it may appear, from a consumer perspective, to get drugs to the market faster, don’t let this fool you. President Trump will, at most be in office for 8 years, and at least 4. If his successor is an ethical and moral person, not only will they likely reverse this policy at the request of the Agency itself, but they can even claw back those pharmaceuticals approved in the interim, thereby forcing efficacy trials to be conducted before marketing authorization will be re-granted. . In addition to this, to remain globally competitive, if you plan on selling your product anywhere outside of the United States, you will still be required to do these efficacy trials, and in the reimbursement system set up by most countries, you need to actually prove your product works and has an effect. Only in the US might this not become the case in a major setback for Pharmaceutical Companies operating here.

This was not the only thing which was brought up at this meeting. President Trump also mentioned, again, in the clip played on NPR, that Pharmaceutical Companies would be required to bring manufacturing back to the US. This is a double edged sword. One of the many reasons a large percentage of component manufacturing is done overseas is cost. It is very often cheaper to manufacture a product in other countries or regions. By bringing it back to the US, yes, you will add jobs in the US, but you could lose your competitive edge. If your product costs more than your competitor, then it will be harder for you to get reimbursement, and insurance companies are less likely to cover your drug. So how is a Pharmaceutical Company benefitted by speedier approval of a drug if the insurance companies won’t cover it? Remember, President Trump has also mandated that the Affordable Care Act (Obamacare) be dismantled, and we will likely go back to the older system with Insurance companies basically setting their own rules.

The meeting is an important look into a White House that doesn’t understand our industry, and didn’t try to do so, before having a meeting with them. This lack of understanding bring us to the next item, the Executive Order on Regulations. According to this Executive Order, specifically in Section 2 (c);

In furtherance of the requirement of subsection (a) of this section, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations. Any agency eliminating existing costs associated with prior regulations under this subsection shall do so in accordance with the Administrative Procedure Act and other applicable law.

This is a slippery slope. Which two regulations do you remove cost from? How will the Director of the Office of Management and Budget, who is tasked with enforcing this, help the heads of Agencies decide? Section 2 (d) seems to have some language to the effect of helping with that decision.

The Director shall provide the heads of agencies with guidance on the implementation of this section. Such guidance shall address, among other things, processes for standardizing the measurement and estimation of regulatory costs; standards for determining what qualifies as new and offsetting regulations; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section. The Director shall consider phasing in and updating these requirements.

At the end, however, this is not directly helpful. There is nothing in this discussing the actual *impact* of the regulation, merely the overall cost. The FDA, if they wish new Regulation over the next four years, could see some of its most important actual Regulations rescinded to make way for something which may, or may not, be predicated on the older regulations still existing.

One thing to note with this Executive Order, it does not seem to include Regulatory Guidance Documents, which do operate to an extent with the force of law. It is possible, therefore, that we see very few new requests for guidance over the course of the next four to eight years, but rather see Agencies such as the FDA rely on their ability to create Guidance Documents to clarify their existing Regulations.

Without an insider willing to tell us what the true deal with this is, we are limited to s little speculation. We will have to wait and see how this plays out over the months and years to come. President Trump seems hell bent on ruling with Executive Orders and coercive strategies, and in this case, the ones who may suffer at the end of the day are the patients the Regulations surrounding the FDA are supposed to protect. The FDA prevented a Thalidomide disaster in the United States in the 1950’s because of good reviewers who believed in keeping patients safe. Will people at the FDA stand up for the patients in the face of growing opposition from the Administration, like Dr. Kelsey did with Thalidomide?

Only time will tell.

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