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Mark B McClellan, MD, PhD - Biotechnology Industry Org.

This text contains Dr. McClellan's prepared remarks. It should be used with the understanding that some material may have been added or deleted during actual delivery.

Speech before
Biotechnology Industry Organization

Remarks by
Mark B McClellan, MD, PhD

Commissioner, Food and Drug Administration

June 23, 2003

I’d like to thank you all for having me here today, as you work to make a positive difference of the lives of people in this nation and the world. As the President eloquently made clear, we are living in a truly remarkable era in science and in medicine. New treatments and products resulting from biotechnology are not only achieving breakthroughs in the lab. They are making growing contributions to our economy, our homeland and national defense, and our public health – helping us live better lives than ever before.

And despite the tremendous progress of medical care in recent decades, the potential medical benefit of biotechnology is the main reason why most medical experts believe that the most important innovations are still ahead of us - as new scientific insights from genomics, proteomics, information technology and other emerging fields are increasingly translating into better health and better lives for patients throughout the country and the world.

Yet along with these potentially valuable improvements from biotechnology, we are facing difficult challenges. We need to make sure that public concerns about biotech foods and other products are properly addressed through careful attention to the latest and most complete scientific knowledge about their risks and benefits. And we need to do more to help patients suffering from serious diseases today who are worried both about the timely development of these innovative new treatments, and about whether they will be able to afford the treatments.

The affordability of safe and effective new biological treatments is an issue that rightly has the focused attention of policymakers in Washington, right up to Secretary Thompson and the President. We need to take new steps to address the problem of health care affordability, but we need to do it carefully. We need to find better ways to provide access to these valuable new treatments while not putting at risk the tremendous benefits from continuing medical innovation.

There is no time more critical than now to address these problems. On the one hand, this is a time when the potential benefits of modern biological medicine seem greater than ever, with the potential for truly individualized and effective treatments. On the other hand, it appears that the process of medical innovation – of turning sound ideas from insights in the biomedical laboratory sciences into safe and effective products for treatments – is becoming both more costly and less certain.

By some estimates, it costs more than $800 million and typically takes well over a decade to develop a new drug; and by all estimates, the cost of developing safe and effective new medical products has increased greatly, more than doubling over the past decade. In addition, improvements in biomedical science have not translated into a better success rate for investigational treatments. The vast majority of the treatments that enter clinical testing don’t succeed, and even among those products entering phase three trials, less than half result in an application for product approval to the FDA.

So maybe it’s not surprising that, on the one hand, there are more biological treatments under investigation than ever before – more biological INDs – but on the other hand, the number of truly new biologicals approved by FDA has been declining, down to 12 last year, from a high of 27 in 1998. Now, I believe there are a lot of reasons to think that this decline is temporary. After all, it takes some time to turn all of the unprecedented public and private R&D investments now taking place into safe and effective treatments for patients.

And I know many of the people who write and think about the biotech industry are optimistic. I too think that this time, the upswing for the industry is for real. There are a number of effective new treatments that have been approved, and many more that may turn out to add more value to our health care system in the pipeline. The industry has reached a level of maturity. Today, doctors have at their disposal more than 140 biotech-based medicines and vaccines, in addition to a raft of genetic tests and other diagnostic tests to help them use the treatments effectively. Today, we can say more confidently than ever that biotechnology is becoming an integral and growing part of mainstream medical practice.

But we are still early in this process, and so no one should be complacent about the notable recent achievements of the biotech industry. The concerns I’ve raised about rising costs and uncertainty of product development combining with pressures to control medical costs are real, and if not addressed, they could prevent some or many of the further breakthroughs that biotechnology might provide in the years ahead. To make sure that the coming years as well as the rest of this century fulfill biotechnology’s promise of delivering more valuable treatments to patients, there is much more work to be done, both in the government and in industry.

That’s why the President and the Secretary are working hard with Congress to give seniors better benefits under Medicare, including a key benefit that is decades overdue: prescription drug coverage. From a parochial FDA perspective, this is a critical public health measure for two reasons.

First, all the hard work that we do to get safe, effective drugs to the marketplace to benefit Americans only pays off in terms of public health benefits if patients who need them have access to these treatments. So we need modern coverage that makes the benefits of modern medicine affordable for patients who need it. Too many seniors are increasingly struggling to afford the drugs that could benefit them, or even forgoing treatments.

Second, we need health care coverage that encourages innovation as well as affordability. That means reimbursement that reflects the value of innovation to patients, not arbitrary rules set by the government. We need a Medicare drug benefit, and an overall Medicare insurance program, in which seniors have choices. That forces health plans to compete to provide the most effective and up-to-date benefits possible, and that avoids the inflexibility of price controls and other regulatory controls that delay innovation that provides great value to patients.

Thanks to the President’s leadership and hard bipartisan work in Congress, we are making more progress than ever toward reaching this goal. The President’s framework and bills under consideration now in Congress would provide $400 billion in new Medicare spending on updated benefits in a competitive Medicare program, one that includes comprehensive drug coverage for low-income seniors, and large new subsidies for drug purchases as well as badly-needed protection against very high medical expenses for all seniors. This is a big improvement in access to care, while still providing strong incentives for continued biotech innovation. And so, right now, we need your help in making it happen.

Modern coverage is the most important next step forward that biotech needs in the short term, but isn’t enough. We need to do more to increase the value of the biotech treatments being developed – before and after they reach the market. At FDA, we are continuing to work to help make the process of developing and providing new medicines less costly and less uncertain, but we can’t do this alone. We need help from the researchers and product developers involved in the increasingly complex and lengthy R&D pipeline, to find ways to make that pipeline shorter and less risky.

For our part, FDA’s is working hard to fulfill our mission of determining whether products are safe and effective, and doing this at the lowest cost and in the least burdensome manner to the agency but especially to society.

This emphasis on improving the efficiency of our regulatory activities is a key element of FDA’s new strategic action plan – a plan that I’m proud to say reflects the ideas and perspectives of all of our senior professional staff. It’s what we call “efficient risk management,” and I don’t just mean “risk management” programs for avoiding adverse events for the drugs we approve – though that’s a piece of it. In all of our major policies and regulations, we’re seeking to use the best biomedical science, the best risk management science, and the best economic science to achieve our health policy goals as efficiently as possible.

We’re doing this because the public needs us to. If we can fulfill our mission of determining whether products are safe and effective at a lower cost and in less time, then this translates into lower R&D costs for innovating, and greater and earlier use of beneficial new products by more patients.

We’re also doing this because we have to. Thanks to the enormous growth in research investments I described, we’re dealing with more complex and innovative products in development than ever before. As discoveries made in the laboratory are flowing into the medical products consumers are using, it means that we’re challenged to upgrade our own science to keep pace with this new innovation and the growing sophistication of our sponsors.

We’re in a great position to help with the innovation process – after all, we’ve got more experience and data on the factors that influence the success or failure of new treatments than anyone on the planet – but we need to find better ways to share this experience with product developers and outside experts in order to improve the development process. And all this is happening at a time when FDA’s mission is becoming more complex than ever, for example with increasingly diverse food and nutritional products and new threats of terrorism. We have responsibilities over 20 percent of the consumer economy – an amount that’s growing every year. Only by becoming consistently more productive at what we do – always working to get the most public health bang for our regulatory buck -- only in this way can we have the best chance of fulfilling our increasingly complex public health mission.

We have a good opportunity right now, thanks to bipartisan legislation that Congress passed last year, and may build on this year, to put additional resources for FDA from manufacturer user fees to urgent use. As last year’s law directs, these initiatives will help us reduce our “cycle time” for review of product applications. But to reduce the time for approving new products, and to reduce the total time for developing new products, we need to do more.

That’s why we’re taking new specific steps to help foster more and more efficient innovation, especially in emerging areas or those of great medical need.

Back in January, we announced a new FDA initiative on improving medical innovation. That initiative has several elements. One element of our initiatives for improve medical innovation is the development of “quality systems” for our review procedures. The idea is to build on our professional staff expertise to identify and apply best management practices internally to our review processes. Another element is more work to develop new guidance documents that I believe can bring more efficiency and predictability to our regulatory process. We’re doing this with collaboration and new support from outside experts, including support from the National Institutes of Health. Some of the guidances will focus specifically on diabetes, obesity, and cancer. Despite all the innovation that’s already occurred, these are therapeutic areas that remain underserved by effective treatments and that have promising technologies under development today. We’re also developing guidances in new areas of technology development – including pharmacogenomics, novel drug delivery systems, and cell and gene therapy. We intend to complete all of the objectives outlined in our innovation initiative within the next few years, and in many cases, within a matter of months.

As another step that reflects the increasingly mainstream role of therapeutic biologics, I am pleased to tell you that the reorganization and consolidation of our review activities for biologic therapeutics will take place as we promised in January. The consolidation of review responsibilities for certain therapeutic biologics into our drug center will occur as scheduled on June 30. The consolidation of these review functions and personnel is designed to produce a more efficient and effective review program for human drugs and biologics, by enhancing consistency and coordination. It will enable us to make better use of combined expertise and best practices of both CBER and CDER reviewers. Biologic therapeutics are increasingly integrated into mainstream medical care, and the same kind of integration in our review activities will enable us to use and enhance our expertise in evaluating both traditional drugs and biologics.

With this consolidation, we are also undertaking new efforts to help clarify development pathways for the potentially extremely important yet in many ways still unproven biotechnology treatments that CBER is retaining. The dedicated staff of CBER has played an instrumental role in facilitating the development of some of the most important medical innovations in biologics in recent decades, resulting in mainstream patient access to safe and effective biologic therapeutics. Now more than ever, we need that tradition of nurturing the leading edge of the new and emerging medical technology for cell and gene therapies, as well as new approaches in tissue engineering and in innovative vaccines to address emerging infectious disease threats, bioterrorism, and even chronic diseases and malignancies. There is also more potential than ever for advances in blood technologies, including blood substitutes and new approaches to pathogen inactivation. Many of these emerging technologies hold considerable promise, but remain largely at the investigational stage, with key unanswered questions in how to turn the good ideas into safe and effective treatments. Our biologics center is focusing new efforts and new collaborations on these emerging technologies, which could become the most important medical breakthroughs of the 21st century.

To build on all of these steps to improve the speed and predictability of developing new biotech treatments, FDA will very soon announce some specific new performance commitments to improve innovation. While improving review cycle performance is important, that’s not the bottom line. The bottom line is reducing the overall time for development and approval of safe and effective new medicines. To achieve this, FDA will make some new commitments to reduce our total review times for applications, not just cycle times. This reflects our commitment to making the review process smarter and more efficient, similar to what we have recently committed to doing with generic drug reviews.

We intend to shift downward the time that it generally takes to get a safe and effective drug approved by FDA. Technically, we are committing to reduce the total FDA review time by 10 percent or more for the first 50% of applications approved among those submitted in a year. Reducing cycle time alone is unlikely to achieve this goal, and we are not compromising on FDA’s standards for drug approvals – which are the gold standard for the world. Instead, we intend to do this through smarter and more up to date regulation. We will do more than ever to help avoid multiple cycles of review and to increase the likelihood that an application to FDA gets it right the first time. Based on published estimates, a 10 percent reduction in regulatory review time reduces the total investment required to develop a new medication by over $12 million. By shifting down the time and cost of developing new medications, patients will benefit from earlier and greater access to more safe and effective medications.

Another application of our principle of efficient risk management to reduce medical costs is overhaul of the way that medical products are manufactured. We call these guidelines good manufacturing practices, and our GMP regulations for drugs haven’t been updated in 25 years. Meanwhile, best practices in manufacturing technologies and methods have undergone significant progress over that time, particularly in other high-tech industries. For example, the semiconductor industry also has a very low tolerance for impurities and inaccuracies in production. And when its production processes were lagging because of high costs and too many errors that industry helped invent the “six sigma” production methods. Through continuous quality improvement, those methods achieved enormous improvements in production cost and quality, and they have since been widely adopted in manufacturing industries.

We want to make sure that our regulations are encouraging such progress, not standing in the way. So our broad-based program is developing new GMPs based on the latest science of risk management and quality assurance. The new standards are being designed to encourage cost-reducing and precision-enhancing innovation in manufacturing and technology, and to ensure that all three FDA medical centers use consistent and up-to-date methods, including inspectors specializing in particular types of production methods.

We also need improved post market monitoring, especially to help streamline and improve the way industry and the FDA fulfills post market studies. Preventing adverse events, and improving the information on benefits and risks of approved drugs, is so important in improving health care and increasing its value that it’s one of the five key elements of our strategic plan.

It’s true that virtually all medical therapies have side effects, and it is important for these side effects to be well understood so that we can be sure that the benefits of the products we approve outweigh their risks. So we’re doing all we can to help patients get better information about their health and to help doctors get better information about their patients.

The FDA has always relied on voluntary reporting systems to monitor the safety of a new drug. We appreciate all the dedicated physicians who continue to file these reports with us, and they will remain a vital part of ensuring the public safety, but the truth is there are countless adverse events that go unreported. And we know that if we want to be able to better manage the risks associated with a drug, and improve the quality of care, we need a more efficient and effective way to uncover problems early, when we have time to do something about it.

Our goal is to have in place an electronically-based monitoring system that allows us to link into medical records and monitor in real time, or near real time, for signals such as trends on blood tests that could alert us to a potential problem with a new medication. This is a two way street as well. If we can get better information about adverse events, and have in place a more robust system for spotting and reporting these problems, we can increase the value in the use of new treatments. We will also have more confidence during our own review processes that potential problems can be identified and communicated to doctors and patients quickly after a drug is approved.

I’ve described a number of steps that we are taking to respond to the critical challenges we face in an era in which biotech is becoming mainstream. I want to conclude by emphasizing that FDA can’t solve these challenges alone. We can’t guarantee that product developers will use the regulatory guidances that we develop with collaborators at NIH and elsewhere in order to submit higher-quality applications the first time around. We can’t make product developers respond quickly to the deficiencies we are trying harder to identify early on in applications.

Many of you in the room today have both the genius and drive to create a better future, and so I want to let you know that while we’re working harder than ever to find policy solutions, we need you to do your part to deliver greater value in the technologies you create. This is a critical time for the biotech industry because it’s a critical time for the health and well-being of the American public. And I’m optimistic not just about the achievements of the biotech industry to date, but in our ability to work together to meet these still greater challenges to achieving a better future. Thank you very much for having me here today.