A Bold Move: the FDA Suggests that Drug-Makers and Device Makers Share Information

Summary:  When it comes to regulating drugs and devices, FDA Deputy Commissioner Joshua Sharfstein is the agency’s point man. Recently, he co-authored a “Perspective” for the New England Journal of Medicine which outlines the FDA’s proposal for greater transparency, both within the drug and device industry, and at the FDA.

When Sharfstein was tapped for the job, his critics described him as “hostile” to industry. But when you consider who his critics are, you recognize that they are “hostile” to virtually any form of government regulation, even when it is designed to protect the innocent. By requiring manufacturers to disclose details about their clinical trials—their failures as well as their successes—the FDA aims to make sure that these companies are not hiding information about risks. Moreover, the FDA argues, if device-makers and drug-makers share what they know, they can learn from each other.

The FDA proposal signals that this administration is serious about regulating the health care industry. The time has come to implement reform, and this means insisting that stake-holders collaborate to create a health care system that is patient-centered, not profit-centered.

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When President Obama tapped former Baltimore Health Commissioner Joshua Sharfstein to become Deputy Commissioner of the Food & Drug Administration fourteen months ago, Sharfstein’s harshest critics called him “an inconceivably poor choice.”  They were particularly upset that the administration had “decided to divide responsibilities at the FDA, giving Margaret Hamburg, the newly appointed FDA Commissioner,  responsibility for regulating food and tobacco, while making Sharfstein the point man overseeing drugs and devices.” At first, I was dismayed at the suggestion that the White House had selected a weak candidate to oversee drug-makers and device makers, but as I read why they objected to the appointment, I began to smile.  (See this HealthBeat post.)  Since then, I have been waiting for Sharfstein to make his move.

My  patience was rewarded  last week when I read a “Perspective” in the May 19  New England Journal of Medicine  titled “Transparency at the FDA,” authored by  Dr. Sharfstein and Afia K. Asamoah, J.D., director of the FDA’s Transparency Initiative. What they propose is nothing less than full disclosure of the details of the industry’s clinical trials including “when an application for a new drug or device has been submitted or withdrawn by the sponsor, and whether there was a significant safety concern associated with the drug or device that caused the sponsor to withdraw its application.”   They also recommend making the full text of so-called “complete response” letters from the FDA available. The authors suggest that the public has a right to know how medical products are made—and why the FDA did or didn’t approve a new drug or medical device. Moreover, they argue, if this information is made public, “companies [can] learn from the successes and failures of other products.” Their recommendations are open for comment until July 20.

Most likely, many in the industry will howl “trade secrets,” and argue that such disclosure would destroy free market competition. As Merrill Goozner puts it: “While companies could make their own R&D activities  far more efficient  by learning about other companies failures, those benefits pale besides the fear of standing naked on the field of failure before investors and peers.” (Thanks to Merrill for calling my attention to the FDA’s call for transparency.)

The proposal deserves attention because it signals that that this administration is serious about regulating those who have a stake in our $2.6 trillion health care industry.

Whether requiring that hospitals reveal infection rates or insisting that insurers spell out what percentage of health premium dollars they are spending on “administration,” the theme is consistent: sunlight is always the best disinfectant. And collaboration, not competition, will be the order of the day. Those who believe that they can continue to do business in the same old way will fail.                             

Sharfstein’s Critics

Before detailing what the FDA has in mind, let me explain why I was so optimistic when I read that the President had chosen Joshua Sharfstein to become Deputy Commissioner of the FDA . Sometimes you can know a man by his enemies.

When Sharfstein’s appointment was announced, Henry Stier,  Associate Director of the American Council on Science and Health (ACSH) and Jeff Miller, a scientist a Stanford’s conservative Hoover Institute, published an opinion piece in the Guardian.Co.UK  headlined “The Wrong Way to Fix the FDA.”  This is where they labeled Sharfstein an “inconceivably poor choice,” and went on to argue that “the new FDA leadership must  . . . confront a trend that has become popular – especially among members of Congress and the media – of vilifying drug companies, and even alleging that regulators have become too cozy with industry.” As a result, “the FDA has battered the pharmaceutical industry with overly risk-averse, burdensome new policies, as well as erratic and dubious decisions on individual products.”

They expect us to believe that Sharfstein is inheriting a legacy of excessive regulation?  This is not the Bush administration I remember.

Just who are Henry Stier and Jeff Miller, and why are they saying these things? To appreciate their point of view you must understand how they feel about government regulation. As the Associate Director of the ACSH, a not-for-profit supposedly “dedicated to promoting sound science in public health,” Stier recently railed against the President’s Cancer Panel for reporting that “Unchecked Chemicals” in the environment can cause “Grievous Harm.”  (See Naomi’s post below.) Stier called the report “spin” and argued that the “activist media” who have informed the public about the panel’s findings are “the real cancer.” (Sorry, Naomi.) 

As for Miller, he is a physician and molecular biologist at the Hoover Institute who believes that organic foods represent a wanton waste of money. He prefers that his vegetables be genetically engineered, thank you. He also believes that the President’s scientific advisers should not “emphasize the pursuit of knowledge about how the biosphere works” and instead should focus on “manipulating pieces of nature for human benefit.”                        

Sharfstein’s Sins

In the Guardian, Stier and Miller portray Sharfstein as someone “who has a long history of hostility toward the pharmaceutical industry.” Their evidence: “while a medical student at Harvard . . . he led a campaign urging classmates to return textbooks donated by a pharmaceutical company.  . . Sharfstein and his group alleged that the texts ‘are paid for by consumers in the form of higher drug prices. Accepting gifts from companies violates an ethical obligation to our future patients.’ They set up a drop-box, where, like a gun amnesty program, students were urged to return the books.”

Sharfstein went on to work as health policy advisor to Democratic congressman Henry Waxman of California, who, according to Stein and Miller, personifies “the divisive approach that castigates and persecutes innovative pharmaceutical companies." Then he become Baltimore’s public health commissioner where he fought against lead in candy and advocated against marketing cold medications to children under four. (Here, I’m happy to report, Stein and Miller found no fault.)

But they do insist that in his new job Sharfstein needs to “rebuild trust and credibility with stakeholders, i
ncluding companies and investors.”  And they are particularly upset that he has been given the responsibility of overseeing approval of drugs and devices, making him “a far more influential figure than his nominal boss, but without requiring confirmation by the Senate.”  (Only the FDA Commissioner must be approved by the Senate.)

I’m not at all sure that Sharfstein has the more important job. Some of us think that making sure that food is not contaminated is terribly important. But it’s true that the Big Money is to be found, not in bins of contaminated spinach, but on the balance sheets of drug-makers and device makers that enjoy 16% to 18% profit margins. And to Stier and Miller, the ability to regulate Big Money equals Power.

That said, l should acknowledge that the administration made a particularly savvy decision when it decided to name Sharfstein, to a position that would not have to be confirmed. Given his association with Waxman, he was likely to be a controversial figure. No doubt some Senators would be gunning for him. Meanwhile, the administration chose Hamburg for the spot that would require a Senate hearing. An equally good pick, she was not likely to face stiff opposition.

The FDA’s Proposal: A Bold Move

Today, the companies that manufacture drugs and devices maintain nearly complete control over information about their clinical trials. If you want to know more about their research and development, you have to go to a database on the Pharmaceutical Research and Manufacturers Association (Pharma) website where they self-report. They also file with the  Securities and Exchange Commission (SEC),  but these filing are aimed at stockholders, not doctors or patients, and are not submitted until close to the end of the process.

Moreover, manufacturers rarely share the “complete response”  letter  from the FDA with the public or the press.  When explaining why a product wasn’t approved, they like to avoid talking about risk to patients. They prefer to say “the FDA was concerned about manufacturing problems.”

Even when a product is approved, often companies bury the bad news and present only the most successful trials. As Pharmacy Europe notes, the FDA’s Transparency Proposal “comes after doctors and consumer groups criticized the FDA under former President George W Bush for failing to disclose heart risks with GlaxoSmithKline's Avandia and Merck & Co's Vioxx. In addition, the online news service notes, “in December, the FDA complained that 70% of new drug applications had missing data.

Under the proposal, the FDA would fill in the blanks by disclosing “whether there was a significant safety concern associated with the drug or device that caused the sponsor to withdraw an application . . . If a report that is published by a sponsor were to contain an incomplete picture about the safety or efficacy of a product, the FDA would be able to provide its analysis to contribute to the scientific discussion. “

The FDA also would generate and share with the public information about inspections of manufacturing facilities and “the most common objectionable conditions or practices found by agency staff during inspections. This information could be very useful to consumers and purchasers of medical products and food. “

But the FDA is not simply recommending that manufacturers be more open. The Commission is inviting the public into its own inner sanctum. In January 2010,  the FDA released a Web-based resource called FDA Basics. This site aims to answer fundamental questions about how the agency does its work, covering such topics as the product-approval process, inspections, and adverse-event reporting. To date, the site has had more than 165,000 unique visitors, who have left more than 4000 comments.

The second step came in April 2010, when, as part of the open-government efforts of the Department of Health and Human Services, the FDA launched a program-performance system called FDA-TRACK. This system discloses specific measures of workload and results for more than 100 offices at the FDA.

Here, Sharfstein  and co-author Asamoah quote former  FDA Commissioner Donald Kennedy :  “‘a basic principle of our political system [is] that people affected by governmental decisions have a right to know the basis on which they are made.’ With the daily practice of medicine routinely affected by the decisions of the FDA,” the authors add, “the medical community has a large stake in transparency at the agency.”

New management has lifted the veil that shrouded some decision-making at the FDA. But the question remains: Will the Agency’s proposals for industry become a reality? While the recommendations asking for greater disclosure from industry have “the full backing of FDA Commissioner Margaret Hamburg,” Sharfstein and Asmoah acknowledge that:  “Not all these proposals will necessarily be implemented. Some may require changes in law or regulation, and some may require substantial amounts of resources. The agency is now accepting public comment on the content of the proposals, as well as on which draft proposals should be given priority.”

But its worth noting that so far, responses from Wall Street and in business publications like Forbes have been surprisingly positive. “FDA Transparency is Going to be Great” writes Forbes senior editor Matthew Herper.

Moreover, manufacturer and lobbyists may be less than thrilled by the proposals, they are going to find it difficult to explain why companies are loathe to share information, with the public, or with each other. Secrecy only slows the process of developing potentially life-saving products.

An Administration Ready to Regulate Health Care

President Obama’s most liberal critics have suggested that by making “deals” with those who profit from U.S. health care, the White House cut the heart out of reform. But as I argued last winter, not all plans for improving our health care system needed to be stipulated in the legislation, or voted on by legislators. The less that Congress has to do with micro-managing reform, the better.  Discussion of details only provides openings for lobbyists eager to dilute the legislation.

There is much that the FDA Commissioner and Deputy Commissioner, the director of the Centers for Medicare and Medicaid, and the Secretary of Health and Human Services can do to overhaul the system, simply while fulfilling their administrative duties. They can call for needed changes in existing law to help them implement reform.  In this case, I think opponents will be hard-pressed to make the argument for secrecy—particularly if investors want more information.

A year ago, while fighting the battle for health care reform, the White House reached out to the health care industry and asked for support. This was not the time to rattle cages, or to try to persuade the industry that it would have to change the way it does business. The administration needed and got co-operation. Given the intransigence of Congressional Republicans, who put ideology ahead of pragmatic politics, some backing from industry was critical. If both Republicans and key stakeholders had fought tooth and nail against reform, no doubt it would have gone down in flames. And it might easily have been years before anyone dared to tread on scorched earth again.

For everything there is a season. Now, the legislation has passed, and reformers in government are back to
the hard business of regulation– you know, making sure that those in our medical/industrial complex who view the mortal condition as a business opportunity don’t simply run over the rest of us.

We have entered the second stage of the process: implementation. The time has come for government to begin to make reform a reality, and this means letting stakeholders know that the days of unfettered self-interest have ended. The goal of reform is affordable, evidence-based, patient-centered medicine.

The FDA is telling drug and device-makers that they can learn from each others’ mistakes. We cannot afford to have them continue to do their research in separate silos, jealously guarding what they know. When they repeat each other’s mistakes, this only adds to the cost of development, making products more expensive.

Some claim that competition is necessary for “innovation.” There has to be a race, they say and a large Cash Prize.  Otherwise, no one will care.

Over at The Health Care Blog Jennifer Ruzek Liebermann, director of Kaiser Permanente’s Sidney R. Garfield Health Care Innovation Center, lays that canard to rest. “Be aware that monetary incentives are not the primary drivers for innovative thinkers,” she writes. “Autonomy to innovate” and “professional development opportunities” are what motivate inventors.

She also explains: “Research shows that innovation is rarely the product of a lone genius—instead it comes from allowing diverse and divergent opinions to come together to holistically solve problems. This is something we do really well at Kaiser by encouraging networking both within and beyond Kaiser Permanente.”

The Money is not always the Prize. Collaboration is more productive than completion. These are lessons that U.S. drug and device makers need to learn. Ideally, regulators can lead the way.

4 thoughts on “A Bold Move: the FDA Suggests that Drug-Makers and Device Makers Share Information

  1. I cannot agree with you more Maggie about “This is not the Bush administration I remember,” in regard to a legacy of excessive regulation.
    In regards to the nursing home industry, according to government documents back in 2001, the Bush administration, through Thomas A. Scully, then administrator of CMS, wanted to ease regulatory requirements on nursing homes, reducing the frequency of inspections and lessening or eliminating some penalties (meaning deregulation).
    The Bush administration wanted to move away from adversarial enforcement toward a so-called collaborative one, in which regulators would work with nursing homes to improve care. In other words, the “fox guarding the hen house” routine.
    And you saw where that got us in the market meltdown and economic crisis!

  2. Are there any politicians or sane Americans left out there who believes in fewer or weaker federal regulations on large US or multinational corporations?
    Is so – see me for meds
    Dr. Rick Lippin
    Southampton,Pa

  3. Greg & Rick
    Greg–Yes, all of the economic pain that we’re experiencing now should make it clear that Reagan and his advisers were wrong about deregulation.
    We’ve followed the path of deregulation for 30 years, and the result has been the S&L debacle, the corporate fraud unveiled during and at the end of the 1990s, Enron, the banks . . . .
    Deregulating nursing homes– that’s rich. There, you are talking about people who, in many cases, can’t complain because they are senile, very, very sick, or not fully conscious.
    This is why abuse in our nursing homes has been such a problem for such a long time. Nursing home patients need more protection than the average patinet, not less.
    Unannounced inspections, closing down homes where patients are mistreated . .
    Rick,
    Yes, defitely overdue, but very smart. Rather than saying: “We’re going to bear down on you and regulate you” the administration is saying “We’re going to insist that you disclose full information about what you’re doing.”
    So instead of sounding like the police, the regulator is simply making a perfectly reasonable request.
    I’m very excited about Sharfstein. . .
    Re your second post. Sad to say, there are still many politicians out there who believe in deregulation. For conservatives, it’s an article of faith. Meds won’t help.
    And I’m afraid that a great many Americans believe that government shouldn’t interfere with business. But in hard economic times, Americans do look to gov’t to provide a safety net . . .
    And that means govt’ involvement.