Rebuilding FDA’s Small Business Outreach Services
As noted in President Obama's Strategy for American Innovation, the private sector is the engine of innovation, and much of this innovation begins with small business. This is particularly true within the medical device industry, where small businesses play a crucial role, accounting for more than half of all pipeline products. In the recent history of the biomedical industry, small businesses have built much of the foundation of innovative FDA-approved medical products, including drugs, devices, biologics, and diagnostics, such as the first cell-based therapy for cancer, a mobile cardiac monitoring system, and a rapid screening diagnostic for detecting hyperthyroidism. Many relatively young startup companies are now major players in the pharmaceutical industry.
Small biomedical companies have a unique set of needs compared to their larger counterparts. By nature of their size, small businesses are faced with the challenge of raising capital to bring an idea to fruition. Additionally, most small companies lack the regulatory experience to navigate the complexities of the FDA approval process. A recent survey of 123 companies that utilized the resources provided by the Center for Drug Evaluation and Research (CDER) small business office found that a majority sought help to navigate all phases of the approval process and to obtain FDA insight into clinical trial design and implementation. Other common topics of interest included how to obtain user fee waivers and how to increase access to FDA consultation and advice. Of the companies surveyed, 85 percent had never before received an FDA approval, and nearly half had fewer than ten employees.
Many of the challenges faced by the small business community are being broadly addressed through President Obama's Startup America initiative. FDA, which has been working with the Administration on Startup America, is addressing the specific needs of small medical product companies through efforts to make the review process easier and more transparent, as well as by providing information that can help businesses prepare for the final phases leading to product approval and marketing.
Startup America is a White House and interagency initiative to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation. President Obama has called upon agencies across the federal government to dramatically increase the success of entrepreneurs by unlocking access to capital, cutting red tape, and accelerating innovation. Many of these policy initiatives will directly benefit biomedical startups, including new funding and mentorship for teams of entrepreneurial scientists, more control over the speed of patent processing, and new funding to bring research from the lab to the marketplace. As part of the program, the Administration hosted roundtable events across the nation and met with more than 1,000 entrepreneurs, investors, and other participants in the entrepreneurial ecosystem. Senior Administration officials, including Commissioner Hamburg, hosted each roundtable, listening to local entrepreneurs explain the barriers they face while starting and growing businesses and offering potential solutions. For more information, visit www.whitehouse.gov/startupamerica.
FDA already has several existing resources to help small businesses succeed, most of which are focused on helping them understand regulatory review requirements, assisting them with finding information regarding FDA law, and pointing them to resources such as guidance documents. Each of the medical product centers at FDA has an office; such as the Division of Industry and Consumer Education (DICE) in the Center for Devices and Radiological Health (CDRH), dedicated to helping small businesses navigate the Agency and its regulatory approval process.
In addition to addressing the specific questions raised by individual companies the small business office in CDER alone maintains a listserv of 48,000 companies and fields thousands of inquiries per year the small business offices also handle common questions through proactive measures, such as monthly webinars and appearances at medical conferences. They are also in the process of developing a small business blog for the FDA website to help increase and enhance engagement with the small business community.
Despite the currently available FDA small business resources, however, many small businesses continue to file applications or materials that do not meet FDA's written and posted requirements, and many are still not prepared for the process of bringing a product to market. Many companies do not seem to take advantage of the small business resources provided by FDA, which may in part be because these efforts are not successfully reaching the intended audience. There is also a perception among some that while FDA staff understand the regulatory process, they do not have a full appreciation of everything a small business must go through to reach the point of submitting an application. The absence of this business background creates a potential barrier to reaching and assisting small businesses.
After an internal examination of the small business resources at FDA, as well as discussions with small business owners, it became clear that the FDA small business offices and FDA more broadly need to enhance their knowledge of what it takes to start and run a small biomedical business, and to ensure that individuals with small business experience can serve as an FDA resource to others. To address these issues FDA will establish an FDA Small Business Liaison program and a Young Entrepreneurs program, and will set up a partnership with the Small Business Administration.
FDA Small Business Liaison Program
FDA plans to establish a Small Business Liaison (SBL) program to assist its small business offices. SBLs will be business people with experience in starting and running biomedical companies, obtaining venture capital funding, and successfully navigating the FDA regulatory process to bring a medical product to market. SBLs will be responsible for establishing and coordinating more effective interactions between the FDA small business offices and domestic and international small medical businesses.
Additionally, SBLs will train FDA staff on how to engage and network with small businesses more effectively, and will provide staff with a better understanding of the challenges faced by small businesses. This training will help FDA staff better understand the inherent difficulties in running a small business, which will in turn better equip them to hold effective discussions to help small businesses with limited capital make better-informed decisions about their ability to move through the FDA review process given their current resources and potential to raise more capital. In addition, informational seminars and outreach via the SBL program can provide valuable advice for companies at the early stages of product development and help guide their product development planning.
Another element of the enhanced small business program at FDA will involve training young entrepreneurs. FDA will offer fellowships for business, engineering, and science students, or other students who may become entrepreneurs, as part of their educational curriculum. The Agency will work with university business schools to establish a four- to six-month internship or training course within the FDA small business offices to provide future entrepreneurs, venture capitalists, and inventors with first-hand access to information about regulatory review and what it takes to move a product through the FDA approval process. This knowledge base will enhance their effectiveness as future business partners, founders of companies, or investors.
Partnering with the Small Business Administration
FDA is currently engaged in setting up a partnership with the Small Business Administration (SBA) to find innovative, strategic ways to strengthen and support the diverse needs of small businesses. This partnership will be key in assisting small companies to grow and compete in global markets by providing training, counseling, and access to both SBA and FDA resources.
As part of this partnership, we are exploring the feasibility of a full range of creative programs, such as an exchange program for SBA and FDA employees. This program would provide cross-educational training to offer SBA staff a better understanding of FDA requirements, and to provide FDA staff with insight into the unique needs of small companies.
Driving Innovation Within FDA
As a science-based agency, FDA employs thousands of the best and brightest in the science, engineering, and medical fields, creating a fertile ground for ideas for new inventions. Federal agencies are allowed to patent inventions made by federal employees for licensure to industry through the Bayh-Dole Act (P.L. 96-517) and the technology transfer activities under the Technology Innovation Act (P.L. 96-480) and related legislation. To enhance these activities, FDA revitalized support for technology transfer by recruiting intellectual property specialists and raising the profile of the program through internal education and relocation of the effort to the Office of the Commissioner. Since these changes, several FDA inventions have been licensed to small businesses and are currently being developed. For instance, the National Center for Toxicological Research recently filed a utility patent application for a variation of an MRI that can distinguish normal brain tissue and eight different brain pathologies to a 95 percent accuracy level, potentially reducing the need for invasive brain biopsies.