Integrity Issues at the FDA – Imagine That
According to an article in today’s Wall Street Journal, “a congressional committee plans to release a report by the Government Accountability Office that says the FDA risked giving the appearance that it had compromised its integrity because of its dealings with the company, Momenta Pharmaceuticals Inc.”
Although Diabetic Investor has not yet seen the report which is supposed to be released today, the controversy centers on work Momenta performed for the FDA, while at the same time the FDA was considering an application from Momenta for a generic version of heparin. Momenta did not charge the FDA for the services they performed and an ex-FDA official believes the agency at minimum should have disclosed this fact and also believes the agency was biased in reviewing Momenta application.
This report comes on the heels of last Tuesday’s election results where Republicans retook control of the House and made significant gains in the Senate. Many believe with these changes in Washington Congress will take a harder look at the FDA. A move which would be welcomed by many in the diabetes drug and device arena as the FDA is currently wrecking havoc on the industry.
As Diabetic Investor noted in many past postings these actions by the FDA are not just preventing new drugs and devices from reaching millions of patients, their actions are also destroying share prices and making it even more difficult for companies to raise new capital. A perfect example of this was evident yesterday when Dexcom (NASDAQ:DXCM) announced their plans to sell another 2.85 million shares of common stock. A move that would not have been needed had the FDA acted rationally, instead Dexcom who was due to receive millions in milestones payments must go back to the capital markets.
This afternoon at 5pm EST, Insulet (NASDAQ:PODD) will report their third quarter earnings and could well become the latest company to complain about the FDA. We already know from Dexcom’s call last week, the combination of the OmniPod and Dexcom Seven Plus device has been delayed and that Insulet may well wait to combine the devices as things sort themselves out at the FDA. It will also be interesting to hear if the FDA is preventing the company launching their new smaller PODD, a PODD that carries with it a lower cost of goods.
While no one knows if the release of this report today will serve as the catalyst for major reform at the agency, it would be poetic justice to see Congress go after the agency. While Diabetic Investor does not normally favor this type of grandstanding by Congress as typically nothing substantive results from these hearings, this is one time we’ll make an exception. It’s about time the agency explains why they are at war against the millions of patients with diabetes. Why they are doing everything in their power to prevent new drugs and devices from reaching the marketplace. Why they have strayed from their mission which states they should be using science not fear when making a decision.
The bottom line here is it’s time for the agency to clean up their act and get back to the business of helping patients, not hurting them.