Improving the FDA

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Republicans and Democrats continue to disagree about how to fix the struggling economy, but most members of both parties agree on at least one thing: Technology will continue to drive economic growth in the future. The life sciences sector, in particular, will be as crucial to tomorrow's advances as the physical sciences were in developing yesterday's -- the jet engine, the semiconductor.

This is the good news for American patients and companies, since the United States is the long-standing global leader in fields like biotechnology and drug development. The bad news is that U.S. dominance in the life sciences is now threatened by an outdated regulatory system at the Food and Drug Administration.

Though companies continue to spend billions developing drugs, the pipeline of new medical products might be drying up. In 2010, the number of drugs entering Phase III trials, the pivotal trials required for FDA approval, was down by 55 percent compared with the number in 2007. Phase II and Phase I entrants were down by about 50 percent each as well. In a recent survey, three-quarters of California's biotech CEOs said they had put new projects on hold. Another survey found that nearly 40 percent of venture capital companies have decreased their investment in pharmaceuticals and medical devices companies over the last three years.

At the same time, 44 percent of venture capital firms said they plan to increase their investment in life sciences companies in Asia, while 35 percent said they planned to increase such investments in Europe. Only 13 percent said they planned to increase these investments in North America.

FDA regulation is not the only variable affecting the pace of innovation. Companies must also contend with tight capital markets, a growing number of cheap and effective generic drugs, and increasing barriers to reimbursement due to rising health care costs. But 60 percent of firms surveyed cited regulatory challenges at the FDA as having "the highest impact."

Thankfully, Congress is close to passing bipartisan reform legislation that should give patients faster access to new medicines and medical devices and perhaps streamline the process for bringing life-saving and life-enhancing products to market. It won't transform the FDA overnight, but it would be a major step forward. The new legislation is based on several user-fee agreements (user fees allow the FDA to hire additional staff to review product applications) negotiated by the FDA and the drug and medical device industries. The bill's overarching theme is that better communication between companies and regulators will lead to better outcomes for patients.

For instance, the user-fee agreements mandate additional meetings between companies and regulators to ensure new drug reviews are as seamless as possible; require that the agency develop a benefit-risk assessment model for new medical products; and require ongoing FDA staff training on how to review applications that incorporate biomarkers, which can help companies develop safer and more effective medicines targeted at patient subpopulations based on genetic or other diagnostic criteria. Congress has also added provisions that would improve and make permanent incentives for pediatric drug research; extended incentives for companies researching new antibiotics and antifungals for drug-resistant pathogens; clarified standards for the FDA's "fast-track" and "accelerated-approval" programs for serious and life-threatening diseases; and create a "breakthrough-therapies" designation for expediting development of the most promising medicines.

Overall, the legislation will improve the FDA's ability to bring safe and effective new products to the public in a timely manner. Without these improvements, life sciences investment will increasingly move abroad, and American patients will wait longer for more innovative therapies.

The preservation of American leadership in this vital field will pay enormous dividends in the form of improved health, higher-paying jobs and lower overall health care costs, as diseases are delayed or cured through breakthrough technologies like regenerative medicine. As such, the user-fee legislation is a down payment on a better future for all Americans.

Congress should pass it, and President Obama should sign it.

Paul Howard is the director of the Center for Medical Progress at the Manhattan Institute and managing editor of

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