1. P HILLIPS C ONSULTING G ROUP, LLC 513(g)s and Marketing Applications for 513(g)s on The "FDA Effect": Tough Going for Medical Innovation? AAAS 2015 Annual Meeting San Jose Convention Center San Jose, California February 12-16, 2015

2. P HILLIPS C ONSULTING G ROUP, LLC The Short Answer … Achieving FDA authorization to market innovative technology in the US is extremely difficult and challenging! This said, my objective is to provide insight into the factors that influence FDA decision-making and behavior and to foster an understanding and appreciation for why FDA does what it does. 2

3. P HILLIPS C ONSULTING G ROUP, LLC Outline  FDA’s Mission and Proclaimed Performance  The “FDA Effect” Today’s regulatory landscape The US Regulatory Pendulum  Determinants of Agency Performance FDA culture – factors that impact agency risk tolerance Law and administrative procedures Regulatory Science  Closing Remarks 3

4. P HILLIPS C ONSULTING G ROUP, LLC FDA’s Mission 1 The Administration shall— (1) promote the public health by promptly and efficiently reviewing clinical research and taking appropriate action on the marketing of regulated products in a timely manner; (2) with respect to such products, protect the public health by ensuring that— (B) human and veterinary drugs are safe and effective; (C) there is reasonable assurance of the safety and effectiveness of devices intended for human use; (3) participate through appropriate processes with representatives of other countries to reduce the burden of regulation, harmonize regulatory requirements, and achieve appropriate reciprocal arrangements; and (4) … carry out paragraphs (1) through (3) in consultation with experts in science, medicine, and public health, and in cooperation with consumers, users, manufacturers, importers, packers, distributors, and retailers of regulated products. 4 1 21 U.S. Code § 393(b)

5. P HILLIPS C ONSULTING G ROUP, LLC The Administrations FY 2015 Budget 2  FDA’s Scope is Vast, Complex, and Evolving Rapidly The products FDA regulates represent >20 cents of every consumer dollar spent on products in the US.  FDA is a Bargain Every American pays about $8/year for the vast array of protections and services FDA provides.  FDA Delivers Results FDA’s drug approval system continues to lead the world in both quality and speed. - Three quarters of all significant pharmaceutical advances that were approved anywhere in the world in 2013 were approved first by FDA. FDA also achieved significant reductions in medical device application review times and application back logs. 5 2 http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM388309.pdfhttp://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM388309.pdf

6. P HILLIPS C ONSULTING G ROUP, LLC Today’s Regulatory Landscape  Entering a period of political uncertainty 2014 is the start of year 3 in a 2 nd term of the administration The 114 th Congress has the largest Republican majority since 1931 Will the current FDA leadership remain steadfast and engaged?  Agency tolerance for “risk” is low 3 FDA management reluctant to make difficult decisions Scientific reviewers consistently require additional information  Inadequate FDA resources Aspects of the infrastructure have improved, but remain subpar Recruitment is good, but retaining talent is problematic  Substantial industry unrest exists Complaints/appeals related to FDA decisions are substantial Attracting investment in new technology remains a challenge 3 In this context, “risk” refers to being held responsible for an untoward outcome related to exposure to an FDA regulated product..

7. P HILLIPS C ONSULTING G ROUP, LLC The Regulatory Pendulum 7

8. P HILLIPS C ONSULTING G ROUP, LLC The Regulatory Pendulum  The culture of the organization drives FDA to the left whereas budget constraints and economic reality drive FDA to the right  Leadership dictates the direction/length of swing Consider the David A. Kessler, MD 3 era: - Strong leadership skills - Avid supporter of a “strong FDA” with emphasis on enforcement - Drove pendulum to the far left Contrast with Bruce Burlington, MD 4 - Strong leadership skills - Demanded scientific rigor and timely decisions - Drove pendulum toward the center 3 FDA Commissioner 1990-1997 4 CDRH Director 1993-1999

9. P HILLIPS C ONSULTING G ROUP, LLC The Regulatory Pendulum (continued)  FDA turns sharper and faster to the left than to the right Deputy Commissioner Jane E. Henney, MD 5 - “I will take the heat”  FDA is an easy target Sherwin Gardner 6 - “FDA is a slow moving target that bleeds profusely when hit” The actions of Senator Charles E. Grassley (R) and Representative Henry A. Waxman (D) have pushed the pendulum to the left 5 Deputy Commissioner of Operations from 1992-1994; FDA Commissioner 1999-2001 6 Deputy Commissioner 1972-1979

10. P HILLIPS C ONSULTING G ROUP, LLC FDA Culture  Traditionally FDA is very conservative (i.e., slow and deliberate)  Order achieved through “control” is the objective, unless external forces dictate otherwise  Risk averse, particularly during periods of oversight and criticism  Under-funding is always the “excuse” for poor performance

11. P HILLIPS C ONSULTING G ROUP, LLC FDA Culture (continued)  Science emphasized over law  The FDA realities deregulation stifles agency growth and limits employee opportunities citing deficiencies and documenting observations demonstrate scientific rigor and commitment to public health procrastination rewarded over decisiveness FDA personnel leverage industry’s desire for FDA market authorization to achieve objectives 11

12. P HILLIPS C ONSULTING G ROUP, LLC Law and Administrative Procedures  All FDA actions are subject to the law and implementing regulations The agency regulates specific products … data that should be relevant may not be for decision-making There are limits on how FDA can use information … in general, data in regulatory submissions cannot be used for purposes not intended by submitters The processes by which regulatory decisions are reached are governed by strict procedures  The promulgation, implementation, compliance, and enforcement of regulations consume time and resources 12

13. P HILLIPS C ONSULTING G ROUP, LLC Regulatory Science  Science is most often limited by the human mind, current technological capabilities and funding  The science that fuels regulatory processes (i.e., “regulatory science”) is further encumbered by law and regulations Regulatory science refers broadly to the scientific and technical foundations upon which regulations are based  Scientific investigators have freedom, but not when the output is the basis for FDA decision-making 13

14. P HILLIPS C ONSULTING G ROUP, LLC Closing Remarks  FDA is here to stay and achieving FDA approval is a challenge and it will remain a challenge … the agency’s value is linked to the difficulty associated with navigating the regulatory processes  The best that we can hope for is reasonable regulation, coupled with clarity and predictability  No drug, device or biologic is absolutely safe and effective … judgment is required to determine if the regulatory threshold for approval is met.  Understanding the factors that impact FDA can steady the pendulum 14