Change at the FDA

Change at the FDA

As President elect Obama continues to build his cabinet, one of the most important positions open is just who will head the Food and Drug Administration. Although not a cabinet level post whoever takes the job will face a host of issues. The agency has publicly acknowledged they are under-staffed, under-funded and ill-equipped to handle the approval of new drugs and medical devices.

Novo Nordisk (NYSE:NVO) has already experienced the agency’s inability to function when their panel meeting for liraglutide was pushed back a month. While this may not seem like a big deal, each delay is potentially costing Novo millions of dollars and allows Amylin (NASDAQ:AMLN) an opportunity to strengthen sales of Byetta.

Amylin too is being impacted by the slowdown at the agency as they anxiously are awaiting news on what type of label change the agency will require for Byetta. The folks in San Diego are also curious as to how an agency in transition will be able to handle the NDA for the once-weekly version of Byetta, Byetta LAR. As everyone knows, assuming the label change to Byetta is not a Black Box, LAR is the key to Amylin’s future. It’s quite possible that Amylin will be ready to go but the agency won’t be. While this would not be a negative reflection on Amylin there’s no question their share price would be impacted.

While no one knows who will be the new commissioner a name being thrown around is Steven Nissen, chief of cardiovascular medicine at the Cleveland Clinic. If that name sounds familiar it should, Dr. Nissen was at the center of the Avandia controversy.  Should Dr. Nissen get the job Diabetic Investor believes this would have a dramatic impact on the approval process for diabetes drugs.

Lost in all this concern over the drug approval process is the equally important impact this appointment will have on medical devices. Recently the FDA meet with industry leaders from insulin pump and continuous blood glucose monitoring companies to discuss how pumps and CGMS are approved. At this meeting the agency basically acknowledged they are not able to handle the approval process as they lack the necessary expertise. Given the move towards closed or semi-closed loop insulin delivery systems this admission by the agency sends a dangerous signal.

Are we headed back to the days when patients scream bloody murder that the approval process is overly burdensome and preventing new drugs and devices from reaching the people who need them? This would not be unrealistic given that the strongest compliant heard over the past few years is that the agency is too close to the companies they are supposed to regulate.  Rarely in Washington does the pendulum swing to the center when change comes.

Diabetic Investor understands that we’re in the midst of one of the most serious economic crisis seen in our lifetime.  The economy is in a recession that is likely to last well into next year. However, recessions don’t last forever and as bad as things seem today the economy will recover.  Let’s hope for that President elect Obama has the good sense not to ignore the importance of the FDA top spot. While this may not be on top of his list of priorities his decision here will have a lasting impact.  Choose wisely Mr. President elect.