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FDA Faces Succession Questions As Hahn’s Departure Nears
BY DERRICK GINGERY
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Executive Summary
Plan specifying the acting head of the US FDA until new commissioner is confirmed references senior positions that no longer exist. Commissioner Stephen Hahn plans to leave US Food and Drug Administration when President-elect Joe Biden is inaugurated, but the choice of a temporary replacement is not clear – in part because agency succession plans are outdated.
As is tradition, political appointments offer their resignation when a new administration takes office. The incoming president can ask them to stay in their positions, but often they are let go.
Hahn is expected to be among the many Trump administration agency heads and other officials that will depart. The agency confirmed that he plans to serve the remainder of his term, which will expire at 12:01 p.m. on 20 January.
But the FDA was not forthcoming on who will be Hahn’s replacement until a new commissioner is confirmed by the Senate. An agency spokesperson said there was no information to share and the Department of Health and Human Services, the overseer of the FDA, did not respond to questions about Hahn’s replacement.
The FDA’s succession plan also does not appear to offer much help. The agency Staff Manual Guide states that when a commissioner leaves office as described in the Vacancies Reform Act and the president does not appoint someone, the deputy commissioner for Foods and Veterinary Medicine becomes the acting commissioner.
Currently there is no one at the agency with that title. The Staff Manual Guide was last updated in 2016 and the agency senior leadership has been reorganized since then.
Former commissioner Scott Gottlieb eliminated the deputy commissioner for foods and veterinary medicine and other directorate layer positions just before his departure in 2019. The White House avoided the succession planning problem when Gottlieb left, naming National Cancer Institute director Norman Sharpless as acting commissioner.
Biden also could appoint a temporary commissioner upon taking office. A similar approach was used at the beginning of the Obama administration, when Josh Sharfstein was tapped to be principal deputy commissioner and acting head of the agency while Margaret Hamburg awaited confirmation.
Whatever approach is used, extended uncertainty at the top of FDA would be concerning, especially as the agency continues juggling its response to the coronavirus pandemic with its many other regulatory duties.
Abernethy, Other FDA Officials Could Take Over
Several career and other senior leaders at the agency could take charge at the FDA until a commissioner nominated and confirmed.
The agency’s second in command, principal deputy commissioner Amy Abernethy, may be the most obvious choice to take over. As a career employee, Abernethy is planning to stay at the FDA after the administration changes. Gottlieb hired Abernethy and she was thought to be a potential commissioner-in-waiting.
The position closest to the description in the succession plan is deputy commissioner for food policy and response, which is currently filled by Frank Yiannas.
Deputy commissioner for Medical Products and Tobacco, another eliminated position, is listed in the succession plan as the second choice when the commissioner is absent or otherwise unable to perform their duties and the Vacancies Reform Act does not apply.
That is followed by the FDA chief of staff, which is currently filled by Keagan Lenihan. However, the position is considered a noncareer appointment, which means Lenihan can be removed at any time, such as because of a change in policy or loss of confidence, without a right to appeal.
After chief of staff is the deputy commissioner for operations and chief operating officer, which is currently filled by James Sigg.
The FDA invoked its succession plan when commissioner Robert Califf resigned at the end of the Obama administration. Then deputy commissioner for Foods and Veterinary Medicine Stephen Ostroff became acting commissioner until Gottlieb was confirmed.
With US Senate Wins In Georgia, Democrats Gain Path For Rx Price Reform, But It May Be Lower Priority
BY CATHY KELLY
Executive Summary
Razor-thin majorities in both chambers of Congress mean Democrats can’t enact a bold agenda, and the pandemic and attendant recession mean that the initial legislative focus won’t be on Rx issues. Jon Ossoff and Raphael Warnock have won their Senate runoff races in Georgia, and that means the pharma industry lose when it comes to drug pricing legislation – if Democrats can contain their infighting, resolve the pandemic, and restore the economy first.
With Joe Biden heading to the White House and Democrats controlling the US Senate as well as the House, the stage may set for reforms to the prescription drug pricing system in the US. But razor thin margins that Democrats have in both chambers suggests that legislation – if there is any at all – will likely be limited in scope.
The Senate Republican majority that has reliably protected biopharma from government price controls is gone, which is bound to make industry nervous. Although Republicans in Congress will probably revert to more traditional pro-pharma positions in the post-Trump era, they will no longer be in charge.
But the economic recession caused by the pandemic has reordered policy priorities. Instead of drug pricing or health care more broadly, front burner issues will include another COVID relief package and Biden’s ambitious Build Back Better infrastructure plan.
Health care issues may resurface with the Supreme Court’s decision on the future of the Affordable Care Act, expected in the spring. But it’s unclear when drug pricing reform will be taken up again in a major way.
If and when it does become the drug industry’s turn in the spotlight, there are several legislative possibilities: • The Senate Finance bill, which had bipartisan support, although whether that is retained in the new Congress remains an open question.
Most worrisome for industry are the price inflation rebates that would be created for
Medicare. (Also see “Medicare Could Save More than $80bn With Price Inflation Rebates – CBO
Score of Senate Bill” - Pink Sheet, 17 Mar, 2020.) • A redesign of Part D to cap out of pocket costs might also advance as a separate bill (it’s in the
Finance bill too) but how much industry might have to pay for what has been one of its favorite talking points and is the major complication. (Also see “Part D Redesign: MedPAC Finalizes
Recommendations To Congress But COVID-19
Will Get In The Way” - Pink Sheet, 9 Apr, 2020.) • Medicare Part B might see reforms that eschew international comparisons, which invite charges of socialist price controls, and instead revive the competitive acquisition program. CAP uses a third party vendor to negotiate prices and was implemented in 2006 but pulled in 2009 because there was too little participation by vendors or physicians.
As hard as some of those changes may be to swallow, they might actually be good for industry compared to the alternatives.
There’s Still HR 3 To Reckon With
The Democratic sweep raises the possibility that the Senate would take up HR 3, the draconian drug pricing bill championed by House Speaker Nancy Pelosi, D-CA, and passed by the full House in December 2019.
Assuming that the diminished House majority could pass it again, the bill would set up a federal “negotiation” process requiring a drug’s price to be set between the lowest price in six high income countries and 120% of the average price across those countries. The resulting price would apply to Medicare and the private market. (Also see “House Price ‘Negotiation’ Plan: It Is Even Worse Than It Sounds” - Pink Sheet, 24 Sep, 2019.)
Up to 250 high-cost drugs without price competition would be targeted annually. Companies that decline to negotiate or fail to reach a pricing agreement would be subject to an excise tax that starts at 65% of sales in the US and rises quickly to 95%. The bill would also establish price inflation rebates in Medicare.
The Congressional Budget Office estimated in a final score released in December 2019 that HR 3 would reduce federal spending by about $456bn over the 2020-2029 period, mainly in Medicare. It would also lead to eight fewer drugs being developed during that time and 30 fewer drugs over the subsequent decade, CBO predicted.
In a preliminary version of the score issued in October 2019, CBO had projected the bill would result in a reduction in pharmaceutical industry revenues of $500bn to $1tn over 10 years. The final score omits the eye popping $1tn projection but biopharma will no doubt continue to quote that figure as it marshals opposition to the bill.
Will Biden Push Bill In More Moderate Direction?
President-elect Joe Biden endorses a number
of the drug pricing policies that align with HR 3. They include removing the legal prohibition that prevents the Health and Human Services Department from negotiating drug prices in Medicare Part D, international reference pricing and price inflation penalties.
But assuming the country and world moves on from COVID-19 thanks to swiftly developed vaccines, industry’s innovation argument against the bill may carry more weight. And Biden could chart a more moderate course on drug pricing and work with Congress on less extreme measures than HR 3 in its current form.
For example, Biden recently signaled support for another approach to drug price negotiation that is based on an independent assessment of comparative effectiveness data, as is done in Germany. (Also see “Biden, Germany And Bringing A National Drug Pricing Negotiation Process To US” - Pink Sheet, 22 Oct, 2020.)
Launched in 2011, the German approach is based on a centralized assessment of manufacturer dossiers and other information on new drugs, a determination of how much added benefit they offer, and negotiation on a national price.
The process is overseen by a legal public entity known as the Joint Federal Committee, which governs physicians, providers and health insurance funds in Germany. The committee contracts with the non-governmental Institute for Quality and Efficiency in Health Care, known as IQWiG, for the dossier review and then makes a determination of value based on IQWiG’s assessment.
If a drug is shown to offer added value, the national organization representing insurers negotiates with manufacturers on a price. If no value is demonstrated, the drug’s price is capped at what is being charged for comparable drugs. The pharma industry believes that criteria for demonstrating value in the German system is too restrictive. But it may not look so bad compared to HR 3.
BY DERRICK GINGERY
Executive Summary
Plan specifying the acting head of FDA until new commissioner is confirmed references senior positions that no longer exist. Commissioner Stephen Hahn plans to leave US Food and Drug Administration when President-Elect Joe Biden is inaugurated, but the choice of a temporary replacement is not clear – in part because agency succession plans are outdated.
As is tradition, political appointments offer their resignation when a new administration takes office. The incoming president can ask them to stay in their positions, but often they are let go.
Hahn is expected to be among the many Trump Administration agency heads and other officials that will depart. The agency confirmed that he plans to serve the remainder of his term, which will expire at 12:01 p.m. on 20 January.
But the FDA was not forthcoming on who will be Hahn’s replacement until a new commissioner is confirmed by the Senate. An agency
spokesperson said there was no information to share and the Health and Human Services Department did not respond to questions about Hahn’s replacement.
The FDA’s succession plan also does not appear to offer much help. The agency Staff Manual Guide states that when a commissioner leaves office as described in the Vacancies Reform Act and the president does not appoint someone, the Deputy Commissioner for Foods and Veterinary Medicine becomes the acting commissioner.
Currently there is no one at the agency with that title. The Staff Manual Guide was last updated in 2016 and the agency senior leadership has been reorganized since then.
Former Commissioner Scott Gottlieb eliminated the deputy commissioner for foods and veterinary medicine and other directorate layer positions just before his departure in 2019. (Also see “US FDA Reorg: Defining The “Central” Purpose Of A Commissioner” - Pink Sheet, 22 Mar, 2019.)
The White House avoided the succession planning problem when Gottlieb left, naming National Cancer Institute Director Norman Sharpless as acting commissioner. (Also see “Sharpless Calls For A Nimble, Flexible, More Efficient US FDA” - Pink Sheet, 2 May, 2019.)
Biden also could appoint a temporary commissioner upon taking office. A similar approach was used at the beginning of the Obama administration, when Josh Sharfstein was tapped to be principal deputy commissioner and acting head of the agency while Margaret Hamburg awaited confirmation. (Also see “Hamburg, Sharfstein Appointments To FDA Shift Focus To Future Plans Of Career Officials” - Pink Sheet, 14 Mar, 2009.)
Whatever approach is used, extended uncertainty at the top of FDA would be concerning, especially as the agency continues juggling its response to the coronavirus pandemic with its many other regulatory duties.
Abernethy, Other FDA Officials Could Take Over
Several career and other senior leaders at the agency could take charge at the FDA until a commissioner nominated and confirmed.
The agency’s second in command, Principal Deputy Commissioner Amy Abernethy, may be the most obvious choice to take over. As a career employee, Abernethy is planning to stay at the FDA after the administration changes. Gottlieb hired Abernethy and she was thought to be a potential commissioner-in-waiting. (Also see “Commissioner Succession Plan? Abernethy As Gottlieb’s Number Two Offers One Option” - Pink Sheet, 17 Dec, 2018.)
The position closest to the description in the succession plan is deputy commissioner for food policy and response, which is currently filled by Frank Yiannas.
Deputy Commissioner for Medical Products and Tobacco, another eliminated position, is listed in the succession plan as the second choice when the commissioner is absent or otherwise unable to perform their duties and the Vacancies Reform Act does not apply.
That is followed by the FDA Chief of Staff, which is currently filled by Keagan Lenihan. However, the position is considered a noncareer appointment, which means Lenihan can be removed at any time, such as because of a change in policy or loss of confidence, without a right to appeal.
After chief of staff is the deputy commissioner for operations and chief operating officer, which is currently filled by James Sigg.
The FDA invoked its succession plan when Commissioner Robert Califf resigned at the end of the Obama Administration. Then Deputy Commissioner for Foods and Veterinary Medicine Stephen Ostroff became acting commissioner until Gottlieb was confirmed. (Also see “US FDA Might Be Temporarily Headed By Ostroff As Califf Sets His Departure” - Pink Sheet, 5 Jan, 2017.)
Woodcock Gains Another Title At FDA
Janet Woodcock also has a new role at the FDA, in addition to her ongoing detail to Operation Warp Speed.
Hahn recently named Woodcock principal medical advisor to the commissioner. The agency said Woodcock will work with Deputy Commissioner for Medical and Scientific Affairs Anand Shah “to advance the FDA’s COVID-19 Pandemic Recovery Preparedness Plan.”
Woodcock also will retain her role at Operation Warp Speed, where she is in charge of coronavirus therapeutic development. As is the case with her OWS duties, Woodcock also will be “recused from participating in any regulatory decisionmaking regarding specific COVID-19 therapeutics, including decision-making about therapeutics within the FDA’s Coronavirus Treatment Acceleration Program.” Patrizia Cavazzoni remains acting Center for Drug Evaluation and Research Director, but the agency spokesperson said there was no additional information to share on whether or when Woodcock would return as CDER director.
Upon taking the OWS position in May 2020, Woodcock temporarily moved to the FDA Commissioner’s office to ensure her attention was focused on that role. Cavazzoni was named acting CDER director at that time.
In an interview during the December 2020 FDACMS Summit, Cavazzoni said Woodcock’s return to CDER will depend on how her work at OWS progresses and when she can move out of the role. Cavazzoni said she chats with Woodcock on occasion, although discussion topics are limited.
Center for Biologics Evaluation and Research Director Peter Marks also was given an OWS position overseeing vaccine development, but he quickly returned to CBER to focus on the assessment of vaccine applications and avoid perceived conflicts of interest. (Also see “COVID-19 Staff Shakeup: Woodcock Moves to Commissioner’s Office As Marks Drops Out Of ‘Warp’” - Pink Sheet, 22 May, 2020.)
