Remarks to the Jax Forum October 24, 2018

Speech | In Person

• Speech by: Anna Abram

Remarks by Anna Abram
Deputy Commissioner for Policy, Planning, Legislation and Analysis
The JAX Healthcare Forum
Hartford, CT

(Remarks as prepared for delivery)

Thank you for that kind introduction. It’s a pleasure to be here in Hartford to participate in this lively discussion on Healthcare Innovation hosted by The Jackson Laboratory, one of our nation’s leading centers for biomedical research. An ongoing purpose of this forum is to help promote a new paradigm for biomedical innovation where payers and providers work together with innovators and investors to identify specific problems that, if solved, would improve patient care and lower health care costs.  It’s been argued that including payers and providers at an earlier stage of development would reduce the failure rate for new approaches since the judgments of payers and providers often determine which innovations will ultimately survive in the healthcare marketplace.

But there are other important players in the biomedical ecosystem – including patients themselves - and I’m glad that the Forum, in inviting me to speak this year, recognizes that FDA is also an essential player in promoting health care innovation – and potentially reducing health care costs. The fact is, innovation is part of FDA’s DNA. Embedded in the agency’s mission statement is the pledge to promote as well as protect the public health and to do so requires doing what we can to help advance medical products in a timely manner to the people who need them. And we take it to heart. In my remarks today, I’d like to talk to you about FDA’s ongoing efforts to advance innovation specifically intended to improve the health and wellbeing of patients and consumers, to discuss FDA’s indirect role in reducing healthcare costs, and describe how FDA is collaborating with other participants in the biomedical ecosystem, including patients.

FDA has adapted to the regulatory demands of specific evolving technologies

FDA has long been recognized as setting the gold standard for medical products. Our standards instill consumer confidence and set a level playing field for business that spurs industry to excellence and results in a biomedical industry that is the envy of the world.

But FDA recognizes that regulation must be modern, flexible, able to respond to changing science, changing needs and changing circumstances, while still fulfilling our public health mandate. New and emerging technologies offer potential transformative opportunities, but they also challenge FDA to modernize its approach to evaluating innovations. Or more simply stated, to keep up.  This has meant, in many cases, creating new approaches that are better suited to the efficient evaluation of these advances without compromising FDA’s science-based standards.
Consider an example that will certainly resonate here at the Jackson Laboratories. Twenty years ago, in September of 1998, FDA approved a monoclonal antibody, Herceptin, for the treatment of HER2 positive metastatic breast cancers. On that same day, we approved a test to detect HER2 protein overexpression in breast cancer cells. These simultaneous approvals marked the beginning of what many hoped would be an exciting trend toward co-development of gene-based therapies with tests to detect the drug targets, in order to identify the right therapies for the right patients.

FDA prepared for this new era by moving quickly to build and shape a regulatory infrastructure to help make personalized medicine possible. More recently we’ve taken steps to advance the creation of genomic-based tests by creating a modern and flexible approach for next generation sequencing. We issued final guidance in April that explains how test developers may rely on clinical evidence from FDA-recognized public databases to support clinical claims while providing assurance of the accurate clinical evaluation of the test results. A second guidance provided recommendations on the design, development and analytical validation of these tests. They are the latest example of FDA’s efforts to create regulatory efficiencies in the development and review of NGS tests. In 2017, we authorized a third-party option for conducting reviews of NGS tumor profiling tests and outlined standardized development criteria for carrier screening tests to allow for their marketing without prior agency review.

What FDA is doing regarding cell-based regenerative medicine is another example of how we are adapting our regulatory approaches to best suit a new technology but without compromising our science-based, regulatory standards. Last November, FDA released a comprehensive policy framework for the oversight of regenerative medicine products that include cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, as well as gene therapies that lead to a durable modification of cells or tissues (including genetically-modified cells). The framework includes two final and two draft guidance documents that, among other things, more clearly describe the distinction between products that require premarket authorization and those that do not.  In addition, we articulated a risk-based compliance and enforcement policy so that, for the first 36 months following issuance of the final guidance, developers of certain human cell and tissue products will have time to determine if they need to comply with the premarket approval requirements and if such preapproval is needed, to prepare an investigational new drug application or a marketing application. One of the two draft guidance documents proposes a novel and efficient clinical development model by which promising cell-based products could pursue review and approval by FDA.

We recently followed that up by issuing a complementary policy framework for the development, review and approval of gene therapies. As you may know FDA has approved three separate gene therapy products in little more than a year, reflecting the rapid advancement in this field. The suite of six scientific guidance documents we issued in July are intended to serve as the building blocks of a modern, comprehensive framework for this new field. In contrast to traditional drug review, some of the more challenging questions relate to product manufacturing and quality or questions about the durability of response, which often can’t be fully answered in any reasonably sized pre-market trial. Thus, for some of these products, we may need to accept some level of uncertainty around these questions at the time of approval with effective tools for reliable post-market follow-up.

What FDA is doing to help with medical product translation

So far, I’ve provided some case studies of how FDA adapts to the regulatory demands of evolving technologies. Let me turn now to the more general steps we’ve been taking to advance innovation.

Spurred by the AIDS epidemic in the 1990s, FDA established the accelerated approval program to speed new treatments for serious or life-threatening illnesses for which there are no adequate therapies. Approval was based on a surrogate endpoint reasonably likely to predict clinical benefit, which are sometimes used when clinical outcomes take a long time to study. One of the earliest surrogate endpoints was an increase in certain white blood cells or CD4 cells in AIDS patients. This approach was codified in the 1997 Food and Drug Administration Modernization Act which also established programs such as fast track and priority review for serious conditions. These programs continue to be highly effective. In 2017, CDER used at least one expedited development and review method to advance approval for 61% of all the novel drugs approved by FDA in 2017. That includes another expedited program adopted in 2012 – the breakthrough therapy designation. And the programs have also paid off in how we stack up internationally. Although regulatory processes differ widely between FDA and those of regulatory agencies in other countries, 36 of the 46 novel drugs approved in 2017 - or 78 percent - were approved first in the United States before receiving approval in any other country.

There are other ways we can help close the gap between scientific discoveries and their translation into innovative medical products. In 2004, amid a 20-year low in introductions of new chemical entities worldwide and the rising cost of drug development, FDA established the Critical Path Initiative, with the intent of modernizing medical product development. Among other things, the Critical Path called for clinical trial modernization; the targeted use of bioinformatics, including quantitative models of disease processes; advanced drug manufacturing; and the development and qualification of new biomarkers, including surrogate endpoints. All four topics remain of vital interest to FDA today and their continued implementation will likely have a significant impact on advancing medical product innovation.

Consider clinical trial modernization. The traditional drug development paradigm calls for three clinical trial phases - a small phase one tests safety and dosing, phase two tests short-term side effects and effectiveness over a range of doses and the large phase three assesses whether the product’s benefits outweighs its risks. However, clinical trials are becoming more costly and complex to administer, which can make drug development more risky, uncertain and time consuming. Overly complex trials can also deter enrollment and delay completion. Adding to complexity is “endpoint creep,” with pharmaceutical companies spending $4-6 billion annually on non-core or exploratory endpoints that aren’t related to primary safety or efficacy endpoints, according to the Tufts Center for the Study of Drug Development.

As a result, costly and complex trials have contributed to spiraling drug development costs, far beyond what was identified when the Critical Path Initiative was first launched. The Tufts Center estimates that drug development climbed by 145% from 2003-2013 to an inflation-adjusted $2.8 billion, a staggering pace.

Modern approaches to designing and conducting clinical trials can address some of these challenges. Today, the FDA is working across its medical product centers to facilitate innovative designs and patient-centered endpoints for drugs, biologics and medical devices.

This includes the use of master clinical trial protocols, such as basket, umbrella and platform trials, which involve a common clinical trial infrastructure to study one or more interventions in multiple diseases or a single disease with multiple interventions, each targeting a biomarker-defined population or disease subtype.  For example, I-SPY 2 compares up to 12 experimental therapies in subgroups of patients with metastatic breast cancer with 10 distinct biomarker signatures. This hub and spoke design uses a common control, reducing the overall number of patients to be recruited and enrolled.

Seamless trials, used in oncology, are another novel approach. They compress the trial phases into one large, continuous trial. Since a lot of time and cost is spent between the starting and stopping of the traditional three phases, a seamless trial may be able to save time and reduce the number of patients needed for clinical development, thus reducing costs, while also enabling investigators to learn about a product’s efficacy and safety and help regulators and sponsors detect efficacy and safety signals earlier in the development process.

Surrogate endpoints are an important tool that can be used instead of clinical outcomes to support accelerated approval but can also be used for traditional approvals, if validated. In cancer these innovative endpoints are putting promising treatments into the hands of high-risk patients, years before they would’ve been available using previous endpoints. FDA just published a list of surrogate endpoints which were the basis of approval or licensure of a drug or biologic product under accelerated or traditional approval. It provides useful information for drug developers on endpoints that may be considered.

FDA is also exploring the development of predictive models based on natural history data, which may be able to obviate the need for placebo arms in some clinical trials for rare diseases by allowing researchers to estimate what a subject’s outcome would have been if they had not received an experimental therapy. And we’re encouraging more widespread use of modeling and simulation in both new and generic drug product development that can be used to organize diverse data sets, explore alternate study design strategies, and predict performance. In our device center, scientists and engineers are building in silico regulatory models for product design and evaluation, including the development of a digital library of models and a family of virtual patients for device testing. To assist sponsors in incorporating modeling and simulation, FDA is currently updating guidance on this topic.

Clinical trials are often conducted in specialized and controlled research settings and can still leave critical questions unanswered, particularly about the effects of a medical product after it is used by a broader population over an extended period of time. Over the past decade, FDA has begun to harness real world data to help us answer some of these questions. As I’m sure many of you know, our Sentinel System accesses large amounts of healthcare data, such as electronic health records, insurance claims data and registries. Our work with Sentinel was initially focused on postmarket surveillance –but FDA is actively evaluating the potential uses of real-world evidence to support pre-market regulatory decisions.  And FDA’s Center for Devices and Radiological Health recently issued guidance that provides recommendations that will enable clinical investigators to understand how FDA will evaluate data collected from routine medical care and how FDA will determine whether the collected evidence is appropriate to support regulatory decision making.

Another promising area for promoting innovation is advanced manufacturing, including continuous manufacturing, which integrates a series of manufacturing steps into one single continuous process that utilizes modern monitoring and controls. Under this closed-loop system, there is a steady output of finished drug products even as raw materials are continuously added. The process allows for more nimble control, requires smaller footprints and is far more efficient than conventional manufacturing.

FDA has approved several New Drug Applications and supplements that utilize continuous manufacturing technology and we’ve issued guidance to further encourage the adoption of innovative manufacturing approaches. In addition, we established a multidisciplinary Emerging Technology Team in 2014. The team works collaboratively and closely with companies for both currently marketed and new drugs to support the use of advanced manufacturing, novel product design, and new product testing methods.

FDA’s role in healthcare costs

I’ve been talking about the many ways FDA is helping to advance the translation of scientific discoveries into products. You’ve probably noticed that our efforts to create flexible regulatory frameworks, modernize clinical trials, encourage the use of scientifically-validated surrogate endpoints, tap into real world evidence and promote advanced manufacturing can all result in greater efficiencies, which in turn can potentially result in lower health care costs.

Indeed, to the extent that the FDA can ensure that our regulatory requirements are streamlined, predictable and science-based, we can help reduce the time, uncertainty and cost of product development.

At the same time, we can help prevent the kinds of anticompetitive forces that can push effective treatments out of the reach of patients and prevent the full benefits of innovation from positively impacting the public health. And by helping lower the direct costs of medical product development, as well as the time and risk embedded in these important efforts, we may also help reduce the cost of the capital needed to underwrite new discovery, which in turn can translate to lower costs and greater opportunities for patients to afford and get the treatments they need.

One area where we are trying to make a difference in this way is with generic drugs, which typically cost 75 to 90 percent less than their brand-name competitors. Generic drugs currently account for 90 percent of the prescriptions dispensed and have saved the U.S. health care system more than $1 trillion over a decade. Last year, to further encourage competition and help bring greater efficiency and transparency to the generic drug approval process, we introduced our Drug Competition Action Plan. It includes streamlining the generic drug review process  - including  prioritizing the review, in certain circumstances, of generic applications up to the third generic approval; seeking to reduce so-called gaming that can frustrate and delay generic drug approvals and extend brand monopolies beyond what Congress intended with the Hatch-Waxman Amendments of 1984; and finally, supporting the development, and enhancing the review, of complex generic drug products.

Being able to “genericize” a complex drug can be a high-value opportunity for a generic drug developer. These higher value generic business opportunities can help underwrite the costs of other generic applications at a time when we believe the generic industry is facing new economic pressures from rising costs, supply chain consolidation, increased competition and declining reimbursement for many generic medicines. Moreover, because brand-name versions of complex drug products are often higher-priced than many other brand name drugs, any steps we can take to encourage the development of generic competitors for complex drugs may have an outsized impact on access, and drug spending.

There are potentials for great cost savings in biologics as well. Early on, I mentioned Herceptin.  About one out of every three new drugs approved by the FDA is a biologic, which includes monoclonal antibodies like Herceptin. But biologics have an outsized effect on drug costs, accounting for 70 percent of the growth in drug spending from 2010 to 2015, according to a RAND study.

It’s been over eight years since Congress paved the way for more competition in the biologics marketplace by establishing an abbreviated pathway to approval for certain biologics, called biosimilar and interchangeable products. Since then, the FDA has approved 12 biosimilars, including the first biosimilars for cancer, and interest remains high in these products with over 60 development programs enrolled in FDA’s Biosimilar Biological Product Development Program. While that’s good news, so far, only a fraction of the biosimilars approved have actually gone to market due to dynamics in the marketplace.

To support biosimilar development, FDA in July announced a 4- pronged Biosimilars Action Plan that strives to enhance regulatory predictability and encourage greater understanding of these products in the marketplace. It focuses on greater review efficiencies, more regulatory clarity through guidance and reducing gaming to unfairly delay market competition by biosimilar products. We held a public meeting in September on FDA's approach to enhancing competition and innovation in the biological products marketplace and we are reviewing the public feedback. One final element of the plan is education – and certainly payers and providers can help with biosimilar adoption. We are actively engaging with stakeholders to identify knowledge gaps and develop appropriately-tailored materials.

Collaborating with Payers

FDA knows we can’t go it alone to advance innovation. We collaborate with a wide variety of medical and scientific organizations including those in biomedical research, the drug, biologics and medical device industries, academia, global organizations, health care providers and payors as well. For example, we work with the Clinical Trials Transformation Initiative and the Medical Device Innovation Consortium to consider ways to advance clinical trial modernization and the Biomarkers Consortium to develop and validate new biomarkers. And, certainly, the Sentinel System relies on partners, including both public and private providers.

We’re collaborating with payers in other important ways as well. Late last year FDA approved an NGS-based cancer profiling test on the same day that the Centers for Medicare and Medicaid Services proposed coverage, using the voluntary FDA and CMS Parallel Review program. Parallel review can help reduce the time between approval and coverage. Since the program was piloted in 2011 and fully adopted in 2016, the FDA has received more than 75 inquiries into the process and 36 formal applications to participate. Building on the lessons learned through Parallel Review, in 2016 the FDA launched a new program aimed at engaging private payors and Health Technology Assessment groups through the Private Payor Program. The program provides a voluntary opportunity for manufacturers to receive feedback from the FDA and other non-governmental health technology assessors/payors during their FDA pre-submission meetings on what’s needed in order to develop more efficient evidence generation strategies.  By facilitating communications between device makers and payors, the FDA hopes to shorten the time between FDA approval and coverage decisions. This can be particularly beneficial for manufacturers creating new and innovative devices who also need to secure coverage of their devices by payors.  For payors, the program can mean learning about new technologies beyond their current horizon scanning and being able to provide suggestions about what data and analyses would be useful for evaluation, gaining insight and increased understanding of the FDA review process. I understand that some of the payers in the room participate in this program.

The Patient Voice in Product Development

FDA’s most important stakeholder are patients. At FDA, we are committed to collaborating with patients, caregivers, and advocates, as well as incorporating the various perspectives from these groups into our regulatory decision-making processes. The fact is, patients bring a unique perspective about what is most important in regard to treatment benefits, risks and disease burden. To date, the FDA has conducted patient-focused drug development meetings in over 20 disease areas, where we’ve heard directly from those impacted by diseases, including opioid use disorder, autism, HIV, and Parkinson’s disease. These meetings have given the FDA’s professional staff a deeper understanding of patient and caregiver experiences and from this have concluded that patient input can provide a direct source of evidence regarding a product’s benefit and risks, if methodologically-sound data collection tools could be developed and used within clinical studies of an investigational therapy. We recently issued draft guidance on how patient experience data and other relevant information from patients and caregivers can be collected and used for drug development and regulatory decision-making. Efforts are also underway to incorporate the patient voice in our medical device center, through the Patient Preference Initiative.  A final guidance document, issued in 2016 includes recommendations on patient preference studies that may result in valid scientific evidence and how stakeholders can voluntarily collect and submit to FDA patient preference information.

Today I’ve taken you through 20 years of FDA history to illustrate how innovation is truly part of FDA’s DNA. FDA plays an important role in the biomedical ecosystem, working with scientists, other government agencies, nonprofits, industry, health care providers and payers to help bring innovative products to patients and consumers. We are hard at work at optimizing our regulatory paradigms to fulfill our public health mission, and in the process improving patient care, creating important efficiencies and potentially lowering healthcare costs.

Thank you.