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FDA funding a critical issue in drug, device approval process
Assuring the safety and efficacy of the drugs and devices that we use to treat our patients for maladies large and small is clearly important to every citizen of every country.
 Richard L. Lindstrom |
In the United States, the responsibility for this enormous and challenging task has been delegated by our elected representatives to the U.S. Food and Drug Administration. This task includes not only premarket approval of new drugs and medical devices, but also postmarket approval surveillance for issues not discovered in the approval process.
The FDA’s mandate includes not only medical drugs and devices, but also assuring the safety and quality of our food supply. By any measure, this is a daunting, enormous and thankless task. Having come to know several of the individuals who have dedicated their careers to this challenge, I remain amazed at their commitment and can only say: thank you.
The FDA’s importance is critical not only to our country’s citizens and medical care providers, but also to those who manufacture and distribute medical products worldwide. The same is true in the food industry. So, no argument, the FDA is a powerful and important agency that affects every one of us every day.
Still, there are issues that should concern us all. Let me mention one in particular: funding.
As we all know, it is easy for Congress to mandate actions, but every year it becomes more difficult for lawmakers to fund their mandates. The FDA is, in my opinion, significantly underfunded for the level of responsibility it has been asked to assume. Our federal government loves to mandate “white hat” activities such as assuring the safety of our drugs, devices and food supply, but it hates to pay for them.
As we all know, our federal government is spending far more than it generates each year in taxes by borrowing both abroad and from the Federal Reserve. As a creative solution, Congress enacted legislation that passes a significant portion of the expense for regulating drugs and devices off to the manufacturers that are seeking approval. From some perspectives, a brilliant move, but there are potential significant negatives. Some would consider this a conflict of interest. But more important, the costs for bringing a new drug or device to market are increased both by these “user fees” and the slowly growing barriers to approval.
It is estimated that the typical cost to bring a new class 3 medical device to market is more than $100 million, and for a drug, well more than $500 million. To date, for quality products, manufacturers have still been able to bear these costs and operate profitably, but there is a limit.
At the same time, costs to bring a new device or drug to market are escalating exponentially, our federal government is squeezing hard on the reimbursement side as it assumes more and more of the cost of health care nationwide. In the U.S., we have only a few remaining industries that generate a positive balance of trade. Medical devices and drugs is one of them. The reason for this is that the U.S. medical device and pharmaceutical industry continues to invest more in research and development than any other country. This results in innovative products that are in demand worldwide, generating profitable American companies and a positive balance of trade.
We all remember the fairy tale about the goose that laid the golden egg. I fear for the future global success of our medical device and pharmaceutical industry if the costs of obtaining and retaining approval of products continue to escalate. If the “innovation cycle” in America is breached at any level, it will not only be bad for our economy, but also for the millions of patients who pray daily for enhanced treatments for their diseases.
It seems to me the business cycle in America is often defined by governmental support at the startup level, followed by escalating taxation and regulation until the industry is destroyed, followed by bankruptcy, or in recent times a government (taxpayer) bailout. I hope that our currently healthy medical device and pharmaceutical industry does not go the way of other once successful industries in the U.S., such as the automobile manufacturers.
If wiser heads prevail and our federal government helps fund the FDA’s important regulatory mandate so the financial burden imposed on our health care industry does not destroy it, we will all be the beneficiaries. The alternative is clearly capable of doing much damage to future generations.