________________________________________

FDA/CMS “Pro-Industry” Initiatives:Good or Bad for Industry?

April 12, 2011

Edward E. Berger, Ph.D.

Larchmont Strategic Advisors

________________________________________

Defining the problem

• Life sciences enterprises are subject to well defined regulation by FDA and CMS

• Both agencies have recently implemented a series of “pro-industry” initiatives

• Industry dissatisfaction with and distrust of the agencies is nonetheless running high

• Need to understand the counterproductive impact of agency efforts

2

________________________________________

FDA “pro-innovation” initiatives have disappointed many in industry• Fast track, accelerated approvals and

priority review for pharmaceuticals

• Least burdensome principles for devices

• Adaptive clinical trials and Bayesian statistical analysis

• General commitments on review times

3

________________________________________

FDA drive toward improved responsiveness continues

• Medical Device Innovation Initiative (Feb ‘11)– Voluntary third-party certification for med device

test centers to promote rapid improvement ….– Create a core curriculum …to train a new

generation of innovators– Use more non-U.S. data– Formal horizon scanning to predict new

technology directions

• Improved 510k process4

________________________________________

CMS recent policy initiatives

• Humanitarian Device Exemption coverage

• Coverage for clinical trials

• Coverage with evidence development– Restrictions defined by patient attributes or

provider qualifications/experience– Enrollment in clinical study (of specified

design) or mandated registry

5

________________________________________

Industry doubts about the CMS initiatives• CED imposes continuing costs

• CED determinations are impermanent

• Coverage limited to subsets of patients is a mixed blessing

• Clinical trials coverage comes with compliance issues

• Medicare coverage for drugs may be getting more difficult (Provenge)

6

________________________________________

Two major recent joint FDA/CMS initiatives• MOU of June 23, 2010

– Process and standards for interagency information sharing

• Parallel review of new technologies Federal Register, September 17, 2010)– CMS coverage review simultaneous with FDA

marketing review

• Emphatically ambivalent industry response

7

________________________________________

Memorandum of Understanding 6/23/2010

The Food and Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS), both as part of the Department of Health and Human Services, and hereinafter also referred to as "Federal partners," agree to work together to promote initiatives related to the review and use of FDA-regulated drugs, biologics, medical devices, and foods, including dietary supplements, as defined by the Federal Food, Drug and Cosmetic Act (see 21 U.S.C. 321) and the Public Health Service Act. (See 42

U.S.C. 262). 

8

________________________________________

Purpose of the MOU

9

… to promote collaboration and enhance knowledge and efficiency by providing for the sharing of information and expertise between the Federal partners.  The goals of the collaboration are to explore ways to:– Further enhance information sharing efforts through

more efficient and robust inter-agency activities.– Promote efficient utilization of tools and expertise for

product analysis, validation and risk identification.– Build infrastructure and processes that meet the

common needs for evaluating the safety, efficacy, utilization, coverage, payment, and clinical benefit of drugs, biologics and medical devices

________________________________________

Substance of the MOU

• Single contact person in each agency as contact for information sharing requests

• Requests honored except for good reason • Procedures to prevent inappropriate

disclosure of trade secrets or proprietary information

• No change in legal or regulatory powers or responsibilities of either agency

10

________________________________________

Some CMS/FDA data sharing has always occurred• CMS staff attend FDA panel meetings

• Companies have long been able to authorize FDA releasing data to CMS– CMS typically requests such authorization

during informational meetings

• Industry has often rejected the requests– Worries about proprietary information– Reluctance to cede control of information

11

________________________________________

Purpose of parallel review

• To improve patient access to safe and effective medical innovations

• Shorten the time from market clearance to Medicare coverage

• Create investment incentives for VCs and companies by shortening the time to ROI

12

________________________________________

There are precedents for parallel review• Human Recombinant Erythropoietin (EPO)

– Initial FDA approval June 1, 1989– Medicare coverage policy and reimbursement

negotiated prior to FDA approval

• Drug eluting stents (DES)– In Aug. 2002, Medicare announced new DES

DRGs, with associated payment levels, effective April 1, 2003

– Coordinated to FDA approval timeline13

________________________________________

What EPO and DESs had in common• High visibility during product development

and clinical trials

• High expectation of clinical value– Clinicians and patient advocates

• Well organized and very well funded advocacy programs

_____________

No level playing field for parallel review

14

________________________________________

New initiatives level the field

• CMS is legally committed to the same protection of proprietary data as FDA

• Substantial transparency in selection of products for parallel review

• FDA has selected a small company product to pilot its innovation initiative– DARPA-funded prosthetic arm

15

________________________________________

Serious impediments to successful implementation• Agency budget limitations

• Ability to attract and retain competent staff

• Lack of stable leadership at FDA and CMS

• Congressional mixed messages– Demanding perfect safety assurance while

criticizing pace of approvals– Playing politics with key appointees (Berwick)– See budget limitations (above)

16

________________________________________

Edward E. Berger, Ph.D.Larchmont Strategic Advisors2400 Beacon St., #203Chestnut Hill, MA 02467Tel: 617-645-8452Email:eberger@larchmontstrategic.com

Thank You

17