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Medicare, FDA Issues Top New Chairman's Agenda
originally printed in BIO News -- Aug/Sep 2003
BIO's new chairman, Richard F. Pops, talked to BIO News in July about the challenges before the organization. Pops has served on BIO's board since 1996 and is CEO of Cambridge, Mass.-based Alkermes Inc.
What were the take-home messages from the BIO 2003 convention in Washington, D.C.?
In addition to the amazing display of energy and progress for the industry, the most striking impression was the enormous and growing political clout of BIO. This was evidenced by the attendance, not only from the industry but from the political sphere as well, highlighted by the presence of the president, the secretary of HHS and the FDA commissioner. It became very clear to everyone there that BIO is a potent force in Washington.
What is the most important political issue before BIO?
Right now the most important legislative issue is Medicare reform and inclusion of a prescription drug benefit. As more products from our industry come to market, more of BIO's membership is directly affected by laws affecting their ultimate availability to patients.
[Both the Senate and the House of Representatives passed Medicare drug coverage legislation this summer, and the details of a final bill are now being worked out in conference.] If this legislation is done well, it could be a real benefit to biotechnology companies and to health care in the United States. To the extent that it embodies bad policies, there is a great potential to do harm.
For example, let's say we ended up with a prescription drug benefit that for arbitrary reasons excluded certain medications or lumped them all together under one categorical heading through decisions that were more bureaucratically driven than science driven. That would be very bad.
We have to make sure that whatever system is in place promotes innovation, and a sure way to dampen innovation is to threaten or impose price controls. You can believe in innovation and you can believe in price controls, but you can't believe in the two simultaneously.
What other issues are priorities for BIO?
Another key area of focus for us is always the FDA. The agency is an essential component of our business. Enlightened leadership at the FDA and enlightened regulatory policies are critical.
The FDA from time to time goes through phases where concern for public safety leads to the conclusion that new drugs should not be approved because of the potential for unexpected toxicities. The complementary phase is one in which the agency realizes that not approving new drugs is injurious to public health, because patients are being deprived of potentially beneficial new medications.
I am extremely encouraged by Commissioner Mark McClellan's comments and initiatives. He is an exceptional individual, highly trained scientifically and medically and one who understands the value of innovative drugs in the treatment of patients over their lifetimes. Biotechnology is a business whose foundation is science, and we always do best in a regulatory environment where the emphasis in decision-making is on science.
Should the FDA be doing anything more to streamline the process?
We're looking forward to an ongoing dialogue with the FDA, not with the idea of layering on more things for them to do, but with the goal of improving efficiency so the agency can achieve its goals and ours as well. At the end of the day, the objective is to bring safe and effective medicines to the American people. Nobody-particularly not the FDA-benefits from an inefficient regulatory process.
We would also like to see a continuing upgrading of the scientific capability of the agency's reviewers. There are clever ways-and they're not so difficult-to make sure that happens.
There are remarkable people already in the FDA and in the government in general who have chosen to go into government for reasons other than money. Spending some time within the most important regulatory agency in the world is a very interesting thing to do in a career.
A scientifically sophisticated FDA is a tremendous asset for our industry and our country.
What are some of the internal challenges facing BIO?
The most interesting challenge for BIO is figuring out how to capitalize on its increasing clout. If you think about how far BIO has come in 10 years, from a startup organization to what is now the most important voice of biotech on a global basis, the next question is, how do we make sure we're adjusting priorities and ambitions toward ever more ambitious-and well-defined-goals. There are an infinite number of issues we could weigh in on, but the risk is that we dilute our influence and messages.
How would you describe the current financial climate for biotech?
It's improving, and it's improving for a reason. The fact is that biotechnology is yielding important products. The industry has shown a consistent pattern of meeting clinical endpoints in trials, obtaining regulatory approvals and successfully launching products.
There will always be disappointments when drugs fail, but with the passage of time it grows harder and harder to say biotechnology is not productive, innovative and generally a good idea. Overall, the science is making good on its promises, so the industry should be increasing in value.
Do you think biotech can ever break free of the boom-and-bust cycle?
Unfortunately, it seems that many of the technology-driven sectors of our economy experience booms and busts. Within our own industry, as long as there are a large number of public, early-stage biotech companies that trade on valuations unrelated to earnings, there is going to be a significant group of companies subject to vicissitudes of the marketplace.
As we get more and more biotechnology companies that bring products to market and trade on true financial metrics, then there will be a more stable cadre of companies. What will tend to happen is that those that become profitable and more easily analyzable will be viewed somewhat differently from those still at the R&D stage.
Of course, it's fantastic that in this country we have investment markets that support these early-stage companies over the many years it takes to develop products. It would be tragic if the only biotech companies that could be public were those that were already profitable.
How would you characterize public support for and interest in biotechnology?
It's quite high, but we can never take that for granted. It's our responsibility to articulate the benefits and risks of these technologies so people feel that the biotech industry is an honest participant in the public debate.
What makes the challenge harder is the fact that biotechnology is a very broad term that extends from human health to animal health to industrial biotech to food production and crops. One of the remarkable things about BIO is that it has a voice in all of those areas. That's unusual for a classically defined trade association.
When your two years as chairman end, what would you like to be able to say about your term?
That we did well with the opportunity presented to us. I hope that we will have made continuing progress in improving the regulatory process for the drugs we develop, and I think we have a real opportunity to do that with the current commissioner and his staff. Our role with regard to Medicare reform, to the extent that it occurs, is to make sure it has provisions that not only protect biotech but ensure the drugs we work so hard to develop make their way to patients without impediment.
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