For biotech companies, the Food & Drug Administration holds an exalted place somewhere between the Oracle of Delphi and an angry God. The mere whisper that the agency might quickly approve an experimental new drug can send stocks soaring. Rejection can dump years of hopes and dreams -- and millions of investor dollars -- into the dustbin of failed biotechs.
That's why execs scrutinize the agency's every pronouncement. And it explains why they worry so openly that the FDA's natural tendency, like that of any bureaucracy, is toward caution -- slowing down drug approvals. Small wonder so many were so fretful in the first year and half of the Bush Administration, as the agency was left without a leader.
Then along came Dr. Mark B. McClellan, the White House's choice to head the FDA late last year. McClellan's credentials certainly were impressive: An economics professor from Stanford, he was a member of Bush's economic advisory team, with a PhD from MIT and an MD from Harvard Medical School. Surely McClellan would understand the benefits of new medical technology and in getting new drugs to patients, industry execs figured. Indeed, his academic research had focused on that very question.
"TERRIFIC START." McClellan quickly sought out industry groups and listened to their concerns. Now six months later, the biotech field has some relaxed smiles. "The new FDA director has made a world of difference, in changing the agency's processes, procedures, and attitude," says William A. Haseltine, chairman CEO of Human Genome Sciences (HGSI) in Rockville, Md. Adds Carl Feldbaum, president of the Biotechnology Industry Organization (BIO): "He has gotten off to what has to be called a terrific start."
Most important to the industry, the FDA under McClellan is showing the first signs of getting drugs to patients faster. One example: Genzyme's Fabrazyme for treating Fabry's disease. It's a rare, inherited metabolic disorder caused by the deficiency of an essential enzyme. Genzyme's drug -- and a similar one being developed by Transkaryotic Therapies (TKTX) -- supplies the missing enzyme.
Initially, the FDA had concerns about the drug's safety and rejected it twice. Then McClellan took over. His agency O.K.'d it in April -- with no new data. "The Fabrazyme approval is clearly the result of his direct intervention," says one biotech executive. "It's a sign that standards have changed for new-drug approvals."
SKIPPING STEPS. The new commissioner is also exploring innovative ways to evaluate drugs. Typically, clinical-trial data for an important and controversial new drug are scrutinized by an FDA advisory committee -- a group of outside experts -- before the agency decides yea or nay. The process is seen as giving the FDA political cover for controversial approvals.
McClellan's agency decided to skip this process, however, with Velcade, a new cancer drug from Millennium Pharmaceuticals (MLNM) in Cambridge, Mass. Instead, the FDA worked in tandem with experts at the National Cancer Institute. The drug gained approval on May 13, after less than four months of review. "As a result of close collaboration among the company, the National Cancer Institute, and FDA in the development and review of the drug, FDA was able to make this novel therapy available sooner to help many thousands of patients suffering from multiple myeloma," declared McClellan.
In characteristic fashion, McClellan declines to claim credit for the FDA's new responsiveness. The ideas he's implementing, he says, bubbled up from staffers over the last six months as part of a strategic review of the agency. "At the FDA, one person does not make a huge difference," he told BusinessWeek. It's the reviewers and other staffers who do the real day-to-day work, he insists. "My role is to help set a clear vision, get resources, focus attention where needed, and provide support."
TOO SPEEDY? However, under McClellan, the agency has moved so swiftly in some cases that it now finds itself under attack for putting what critics call "bad" drugs on the market. They question AstraZeneca's (AZN) Iressa, approved by the FDA on May 5. This drug targets a receptor on cancer cells for treatment. But trials have shown that tumors shrink in only about 10% of patients. And in one trial, where Iressa was used in combination with standard chemotherapy, no increase in lifespan compared to the standard drugs was noted.
For some, drug approvals have no justification without thorough testing and clearly shown beneficial results. "The decision to approve Iressa was just outrageous," fumes one congressional critic. "One big study shows no efficacy at all. Now [by approving the drug] the FDA has committed insurers and the government to pay thousands of dollars for something that does not work and -- if you believe the mortality statistics from the drug's use in Japan -- may cause harm." This critic compares Iressa treatment with "apricot pits," an unproven treatment for some cancers.
AstraZeneca retorts that the trial showing no increase in survival with the drug isn't relevant. It says the FDA's approval is for the use of Iressa alone in patients with advanced non-small-cell lung cancer who had stopped responding to standard drugs.
FOLLOW-UP STUDIES. Besides, AstraZeneca notes, under McClellan the agency is becoming more aggressive at requiring additional trials after a drug is approved. And in the case of Iressa, AstraZeneca was asked to do more studies on its efficacy. Such studies can be costly -- and the drug industry has traditionally opposed agency efforts to require them. But McClellan sees them as a valuable tool.
He has other ideas for speeding up the drug-approval process. He wants to beef up the reporting of so-called adverse events once a drug is on the market. In many cases, drugs have rare side effects that show up only after they've been taken by hundreds of thousands of people. The existing system for spotting and reporting these side effects is woefully inadequate, many experts believe. And some drugs actually have killed people before the side effects are noticed.
McClellan proposes stronger monitoring to spot these dangers sooner. Once such a system is in place, FDA watchers say, the agency can risk approving drugs faster, knowing that fewer patients will be harmed if the drugs are on the market. "No matter how big a clinical trial is, it isn't going to pick up every side effect," says HGS's Haseltine. So requiring greater scrutiny after approval "is a very positive move. It can be very costly, but it will get drugs to patients faster."
"NO-NONSENSE GUY." Not that the biotech industry sees eye-to-eye with McClellan on everything. Take generic biotech drugs. The FDA doesn't allow generic-drug makers to produce cheaper copies of biotech medicines. The longstanding reason: Biological drugs are typically much harder to make than the chemicals that make up a typical drug.
Technology has now simplified the process enough to make generic biologics feasible, many experts say. And McClellan says he's considering the move as a way to lower the nation's health-care costs. But the industry remains opposed, since it would cut into their sales. No decisions have been made yet.
It has been only six months, but so far McClellan appears to be up to the challenge of one of the hottest seats of regulatory power in Washington. "It takes a tough guy to run the FDA these days -- and he's one tough, no nonsense guy," says BIO's Feldbaum. "There's not much diplomat-ese. He says what he means and means everything he says." For the most part, the biotech industry likes what it hears. By John Carey in Washington