BIO Chair: Trump Should Re-Appoint Califf to Head FDA

Posted 17 November 2016 | By Zachary Brennan 

BIO Chair: Trump Should Re-Appoint Califf to Head FDA

In a phone interview with Focus on Thursday, Ron Cohen, MD, president and CEO of Acorda Therapeutics and chair of industry group BIO, offered his views on increasing funding for the US National Institutes of Health (NIH), what the future may hold for the US Food and Drug Administration (FDA), as well as some new ideas and possible solutions to help contain rising drug prices.

NIH and FDA

For NIH, Cohen echoed sentiments circulating on Capitol Hill around the 21st Century Cures Act and called for significant increases in funding to pay for basic research.

Likewise, Cohen said FDA should also see increased investments from Congress, particularly to hire more skilled and qualified staff as the agency deals with hundreds of vacancies.

“There are very good people at the top there, but they struggle to hire qualified people from the private sector,” including physicians and scientists that can serve as medical reviewers, he said.

And continuity of leadership “has been a sore point for decades” at FDA, Cohen said, praising the work of Robert Califf as commissioner.

“Assuming he wants to stay on, one of the things this [Trump] administration could do is re-appoint him as head of FDA,” Cohen said. “Rob Califf is almost universally regarded as a strong leader, and he could do a lot of good if he were left in his position … and I want to emphasize that this isn’t because he’s unduly friendly to industry – he’s an honest broker with an enormous intellect, tremendous experience running a large organization and a balanced appreciation for the challenges of industry and making sure the drug supply is safe and effective.”

As far as work on the Cures Act and how it might impact FDA’s approvals of new drugs (some critics say the bill could lower the approval bar too far for new drugs and medical devices), Cohen offered support for the legislation and said: “It’s very clear that in the last five years that drugs have been getting through FDA at a much higher clip…there was a period of time five to 10 years ago when industry was extremely concerned.

“After PDUFA V, FDA made such substantial changes. You can see it, not necessarily this year, but we’re seeing over 40 drugs approved every year…and part of it has nothing to do with the FDA, but with the pace of innovation, some years just happen to have a larger crop of drugs,” he added

In terms of the overall arc of industry progress, Cohen pointed to CRISPR, CAR-T and gene therapies as areas of progress, noting, “it’s a geometric progression over where we were five to 10 years ago.” And though he cautioned that the “flood gates won’t open in the next two years,” he said he expects to see a “dramatic increase” in innovative therapies in the future though “there’s a natural limit at the pace these technologies can evolve.”

Drug Prices

On the topic of drug prices, Cohen said “the clearest thing is why people are angry.”

With surveys indicating that 65%-70% of Americans say skyrocketing drug prices is one of their biggest problems, Cohen noted that a lot of that anger is directed at the biopharmaceutical industry, particularly as over the last several years, the patient has wound up suffering when paying for drugs.

“Their hospitalizations and office visits are being covered, but with drugs, co-pays are going up by multiples,” Cohen acknowledged. 

And as far as efforts to draw back the curtain on the details of list vs. negotiated prices, and why drugs cost so much, Cohen said he’s in favor of helping people get a better understanding of the system. 

“Even I have a window only into a little of it. If we rebate 20% to a PBM [pharmacy benefit manager], I have no idea where that’s going, I have no idea what my patients are experiencing at the other end,” he said.

But for some drugs, particularly Gilead’s cure for hepatitis C, Sovaldi (sofosbuvir), Cohen said there has been some major disconnect between price and public reaction.

“If you look at Sovaldi, that should’ve been one of the most celebrated advances in our industry, instead it’s used as a cudgel to beat us over the head,” Cohen said. “And why are so many patients screaming? It’s because so many insurance and Medicaid plans aren’t paying for it, or if they are, they’re charging really high co-pays.

“How does this system work, who’s making the money, that’s what we’re saying at BIO, let’s make it a transparent system, not on a drug by drug basis, but overall, let’s open the kimono and say this is the percentage we’re taking,” he added. “Sunlight is an excellent disinfectant, and we need to sit down collaboratively and say, how do we balance this with innovation and reasonable returns on development programs, most of which fail.”

Possible Solutions

In terms of what Cohen called “green shoots pushing through the frozen tundra,” he pointed to value-based pricing schemes with insurers, whereby if a new treatment does not meet the agreed upon outcomes, companies will rebate the money for the treatment.

“We need to move to schemes where we look at outcomes, if they’re there, we get paid, if they aren’t, we don’t,” he said.

Cohen is also advocating on the Hill and elsewhere for the creation of a new safe harbor space whereby pharmaceutical companies can speak to insurers on what’s coming through their pipelines without violating off-label promotion laws.

“Right now, we have to talk to insurers two years before approval, and their actuaries say this is what we think our medical loss ratio will be two years from now and then they gear premium increases according to that. This was a big problem with Sovaldi, they had certain assumptions with their plans and then all of a sudden it’s a $14 billion expense.

“It seems to me, this [safe harbor proposal] shouldn’t have a lot of resistance, even from FDA,” Cohen added. “FDA is grappling with what is permissible [on off-label promotion], but this one is a very well-bordered proposal, this has nothing to do with talking to physicians or advertising, it’s a specific venue: Insurers and drug innovators.”

Another initiative Cohen said is brewing is centered on drug payment plans.

“The economic benefit of a cure accrues over several or many years, so let’s say I’m Cigna and just paid $50,000 net for a Sovaldi course, I won’t see the $250,000 benefit because 30% of customers turn over and go to other insurers…so you paid for that drug but saw no benefit. One way to address that is let’s do a payment plan,” he said. “That amortizes the cost over time, and it makes it easier for insurer PNL [profit and loss] and planning, and the drug company still gets paid over time. Everyone I know is willing to discuss plans like that.”

He also said that in order for these types of payment plans to work, government would need to amend Medicaid best price rules to enable these amortization-type payment agreements "so that they don't consider a $50,000 drug's 'best price' to be $10,000 because it's being paid in annual installments of, say, $10,000 over five years."


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