MedCity Influencers, Pharma, Policy

The man Trump is considering for FDA chief has radical plans, but his impact would be limited

Jim O’Neill’s point of view on the regulatory approval process may seem radical, but just because a drug or device is FDA approved does not mean payers will pay for it.

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Totally radical, dude!

Trump considers naming FDA chief who would radically overhaul the agency, blares the headline from STAT. The candidate, Jim O’Neill is indeed a radical: he wants to eliminate the requirement for drugs to demonstrate efficacy in order to gain approval, favors payments for organ donors, and is part of a group that wants to create sea-based libertarian communities.  He also doesn’t seem to know much about the FDA and its people. He said, “one thing that surprised me is that the actual human beings at the Food and Drug Administration like science; they like curing disease and they actually like approving drugs and devices and biologics.”

As scary as the guy sounds, in practice he probably would not have much of an impact. Here’s why:

Just because a drug or device is FDA approved does not mean payers will pay for it. Pharma and device companies have to demonstrate that their products work and that they are cost effective before they will be reimbursed.

Since the biggest payers are Medicare and Medicaid, even if you take FDA out of the business of judging efficacy the government is still heavily involved. However, some Republicans including the likely HHS Secretary look favorably on eliminating Medicare and Medicaid, which I guess would negate my point.

O’Neill still thinks products should be shown to be safe before they gain approval, and that’s arguably more important than efficacy in terms of saving lives. But safety can’t be fully evaluated without considering efficacy. A really effective drug that’s active against a serious illness can be considered “safe” even if there are occasionally serious side effects and even deaths. But we wouldn’t accept the same safety profile as “safe” for more benign conditions.

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O’Neill says FDA is under too much pressure from Congress in its current structure. Whenever there is an unpopular decision the commissioner has to testify before Congress, where he’s raked over the coals. I think the same thing will still happen –the public will rise up, perhaps even more, if FDA backs off its traditional role.

Ted Cruz actually had an even more radical approach.

So, rest easy for now.

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