Medical Device Link.

Originally Published MX September/October 2003

COVER STORY

FDA Commissioner Mark B. McClellan looks at national healthcare policy and his agency's pivotal role in promoting medtech innovation.

Interview by Steve Halasey

During his first 10 months at FDA, Commissioner Mark B. McClellan, MD, PhD, has covered a lot of ground. Moving adeptly among the industries regulated by the agency, McClellan has launched fundamental policy changes in such varied areas as prescription drug labeling, the availability of generic drugs, fraudulent claims about dietary supplements, direct-to-consumer advertising, the monitoring of adverse events involving medical devices and prescribed medications, and the security of the nation's food supply.

Most important for medtech executives, McClellan has also directed FDA to undertake a multifaceted medical technology initiative that seeks to significantly improve and expedite the agency's regulatory processes—including its review of premarket submissions.

It was by no means apparent that McClellan would be able to mount such a wide-ranging effort when President Bush nominated him last October. Disagreements over the qualifications of previous near-nominees had held up appointment of a new commissioner since the beginning of the Bush administration. Several potential nominees were set aside because of Democratic objections to their connections with the pharmaceutical industry. And McClellan's chief virtues seemed to be his close ties to the Bush administration's inner circle and his lack of previous connections with any of the industries regulated by FDA.

Since his confirmation, however, Commissioner McClellan has demonstrated a keen ability to pinpoint areas of greatest concern to FDA's public and industry constituencies, and to marshal agency resources to address those concerns. Along the way, he has also insisted that the agency carry out its responsibilities as cost-effectively as possible—a policy of practical necessity that also has roots in McClellan's previous career in academia.

An internist and healthcare economist, McClellan was appointed to the President's Council of Economic Advisers in July 2001. Before being appointed to the council, he was an associate professor of medicine and economics at Stanford University, where he also served as director of the Program on Health Outcomes Research and was appointed a national fellow of the Hoover Institution.

Although McClellan frequently speaks on behalf of the Bush administration's healthcare policies, he first came to national prominence under the Clinton administration, in 1998, when he was appointed deputy assistant secretary for economic policy at the Department of the Treasury. While there, he supervised economic analysis and policy development on a wide range of domestic policy issues.

In this excerpted interview with MX editor-in-chief Steve Halasey, Commissioner McClellan discusses the policy challenges involved in creating a cost-effective healthcare system while also supporting the development of innovative medical technologies—and how he expects FDA's current initiatives will contribute to both of those goals. The complete transcript of the interview can be accessed via the MX Web site at www.devicelink.com/mx.

MX: In appointing you as FDA commissioner, President Bush saw value in your experience as a physician, health economist, and member of the President's Council of Economic Advisors. What aspects of your background have you found most useful in your first 10 months as commissioner?

Mark B. McClellan: I think it really combines all of the experience that I've had. I've needed my training as a clinician to understand all of the nuances of medical practice in the fields that FDA regulates. I've used my training as a health economist, because we live in a time when the economic pressures on the healthcare system are significant, and FDA cannot act without considering those economic issues. And my understanding of how Washington works, from an administrative perspective, has been essential in helping me to get things done. So I think all of my background and experience is being used in this office. And it's a great time to be FDA commissioner, partly because the challenges that the agency faces are so great, but mostly because the agency has real opportunities to help improve public healthcare.

What expectations of the commissioner's role did you have when you took office, and how have those expectations changed since then?

There is no way to prepare for a job like FDA commissioner, because there's really no job like this. There's no way to prepare for working with a 10,000-person professional agency that has regulatory responsibilities for about a quarter of the consumer products in this country. So I came in with the expectation that I would have some important challenges.

Probably the biggest and best surprise was the quality and dedication of the staff here at FDA. A lot of people view government in general—and agencies like FDA in particular—as black-box bureaucracies where it's very hard to know what's going on inside and where people aren't responsive to the changing needs of the public. And really nothing could be further from the truth here.

The staff here tries very hard to stay up on the latest science. They work extremely hard—many long hours, long nights, and weekends. And they are very committed to the agency's mission. That in itself makes this a great place to work and helps give me the energy I need to get the job done.

Coming into the office, did you have a notion of what you might be able to do for the healthcare system on a large scale?

I had some notion of that. Clearly the agency is extremely important in protecting the public health—giving people confidence that the drugs they use are safe and effective, that the food the public consumes is safe, that cosmetics are safe, and so on. And the agency is increasingly important in keeping the country secure as well—protecting us against terrorist attacks that might involve the food supply, or helping to develop new medications that can be more effective in the event of a terrorist attack.

So coming into office, I was aware that there are a lot of opportunities right now. It's a critical time to be at FDA.

When I first started out, one thing that helped to give me a much better appreciation for what FDA can really do was to go on a retreat with our senior professional staff. Even before I was officially sworn in—soon after the Senate had acted on my confirmation—I went offsite with the heads of all FDA's regulatory centers and a lot of other professional staff. And we spent some time thinking hard about how we can work together to make the greatest difference in the health of Americans. That retreat helped us to crystallize our thoughts about some areas in which we could focus our efforts and hopefully make a significant public health impact.

Some say the U.S. healthcare system is utterly broken and should be replaced, others that it's flawed but can be fixed with government action, and still others that the system can and will fix itself. Did you come into office with definite ideas about what is right and wrong with the U.S. healthcare system, or how to fix the problems?

I don't think I have any one simple, overarching solution that encompasses what's wrong with our healthcare system and what's right about it. We have a very complex system that does some things extremely well, but clearly also has room for improvement.

Our healthcare system is the envy of the world in many respects. Most new medications and new treatments are developed by companies that are based here. In many important fields of medicine, to get care for a whole range of medical conditions, the United States is where people from anywhere in the world would want to come.

On the other hand, the affordability of healthcare is clearly a problem. There are some real problems with access to care as a result of healthcare costs. And we need to keep healthcare affordable while still encouraging innovation.

I think the best approaches would be those that build on the strengths of our system while also addressing some of the problems we're facing today. That's why one of the main areas on which FDA is trying to focus its efforts is on taking steps to help make healthcare more affordable while still encouraging innovation.

But we need to be careful about making sure we accomplish this goal in a way that keeps treatments as affordable as possible. If we develop new technologies that no one can afford, then we're not really fulfilling our public health mission very effectively.

Are there certain principles that you would apply in making some of these changes? In recent speeches, for instance, you've highlighted the importance of science and risk assessment as bases for the agency's activities.

Yes. And putting those together, one of the basic concepts that came out of the retreat with our senior staff was a central philosophy of efficient risk management at the agency and in the agency's activities.

That's kind of a mouthful, but FDA has a long tradition of being at the forefront in using the latest science to help manage the risks facing the public. So we are very good at understanding what health risks the public is facing, performing risk analysis, and conducting risk management—identifying different approaches for reducing the risks facing the public. There are a lot of different ways to address the risks facing the public's health.

On top of that, I've tried to emphasize the notion of efficiency in doing what we do. We need to be sure to take the most cost-effective approach to reducing risk. Cost-effective from the standpoint of the agency, because we have limited resources. And cost-effective from the standpoint of society, because healthcare affordability is a major concern.

Just to be clear though, you've assured industry in a recent speech that just because you're a health economist doesn't mean that you think FDA should be conducting health economics research. But I gather you feel that such research is important. Who should be sponsoring it or conducting it, and at what point in the healthcare system should outcomes research and health economics research be considered?

Well, let me clarify a few things. Clearly, it is outside of FDA's mission to be working on issues relating to the cost-effectiveness or the cost-benefit of the products we approve. That's not our mission. We've got plenty of other things to do in fulfilling our mission.

On the other hand, we do need to be applying cost-benefit principles to our regulatory processes—to our new drug approval process, and to all of the other regulatory activities that we undertake. And that's why it's so important for us to think about the most efficient ways to accomplish our regulatory mission.

So I think there is a role for cost-benefit work in our regulatory approaches. But that's different from doing cost-benefit analysis of the products that we regulate as a condition of approval. We're not going to do that.

Do you see a role for European-style evidence-based medicine in the U.S. healthcare system?

There is certainly a role for better evidence in guiding medical decisions. That's why we're trying to do more work on the postmarket side, and also why we're trying to develop better information about the risks and benefits of the products we approve. Getting better information to guide treatment decisions is a very important part of getting more value out of healthcare today.

However, I'm a little bit reluctant to endorse systems that would perform a simple cost-benefit analysis and then make a treatment recommendation for all patients. Different patients have different risk and benefit profiles, and I think the direction that medicine is moving is actually toward more-individualized therapies through an understanding of the genetic and molecular bases for diseases in individual patients. In the future, we'll probably have even better information to tailor therapies appropriately to individual patients.

So medical decisions should be based on good evidence. But for the future, I don't think that means simple cost-benefit analysis or simple cost-effectiveness analysis is the way to go.

Investment in Innovation

In a recent speech to the Medical Device Manufacturers Association (MDMA; Washington, DC), you highlighted the role of "gutsy investors" in supporting the development of medical technologies. What do you think motivates such investors and keeps them in the market?

From talking to them, I think there are a number of factors. Obviously, the opportunity for financial returns is very important. Today, people care deeply about their health. Consequently, there is strong public interest in the development of new treatments that have the potential to significantly affect the course of many chronic and other serious illnesses. That interest represents a ready market for products that really do add value and really do improve people's health, and therefore also a financial incentive that is an important motivator for product developers.

But I think other motivations are important as well. Being on the cutting edge of science is a strong motivator for some product developers. And finding new opportunities to make the public better off by developing innovative products is also an important motivating factor.

Should policymakers be concerned with the effects of their decisions on the investment community if those policies result in decreased investment support for medical technologies?

The main thing that should motivate policymakers is the goal of protecting and promoting the health of Americans in the most effective ways possible. And clearly, other things being equal, that goal is forwarded by having a more predictable regulatory environment, more-efficient processes for determining whether treatments are safe and effective, and a regulatory process that is quicker and timelier.

All of those things have an impact on public health because they can have an impact on investment decisions by the business community. So I think our focus should be on how to promote the public health. But in some respects, that matches up with promoting investment by the business community.

Sometimes the public interest seems to be at odds with the needs of investors. In the case of generic drugs, for instance, manufacturers and their investors are looking for a longer period of patent protection, and yet the public has a need for access to lower-cost generic equivalents. Are you satisfied that FDA's recent policy action struck the right balance between those contrasting needs; and if that's a good solution in the drug world, how might it be applied to medical devices?

The importance of patent protection and generic competition illustrates the difficulty involved in balancing the goals of affordability and innovation to improve public health. Looked at from the proper perspective—which is the overall, long-term well-being of people in this country—I don't think that patent protection and effective ways of encouraging generic competition after patents have expired should be at odds. What's in the interest of public health and what's in the interest of investors are not mutually exclusive.

Without patent protection, there would be no significant financial incentives for going through that long, difficult, and uncertain process for turning good ideas into safe and effective medical therapies, which are what the public wants.

But when patent protection has expired, that is when we need lower-cost generic competition.

Device development works in a somewhat different way from drug development, in that there is an evolutionary process for devices. The products that get to the market first tend to be modified over time to become safer and more effective. So in many cases, the life cycle for a medical device isn't limited by patent protection so much as by the time it takes for either the original product developer or a competitor to come out with a new and improved version of the device.

Another area that investors say is an obstacle is the Medicare coverage and payment decision process. Is FDA able to work with the Centers for Medicare and Medicaid Services (CMS) to influence the speed at which those processes work?

We've been able to do that on a limited basis, and it's an area where there are some opportunities for improvement. Earlier this year, for example, we approved the first drug-eluting stent for heart disease patients in the United States. In this case, with the manufacturer's support, we shared our review materials about the stent product with CMS while our reviews were still going on. As a result of that timely information sharing, the Medicare program was able to assign a payment code for drug-eluting stents literally within hours of when FDA approved this new product.

Is the current environment in Washington conducive to reforms such as the Medicare reform bills now being considered, which are useful to industry as well as to federal agencies?

Well, it's a difficult time in Washington. There is absolutely a very pressing need to help make healthcare more affordable, particularly for seniors who don't presently have good health insurance coverage. On the other hand, we should not be enacting policies that will get in the way of the much-needed innovations that are likely to occur over the next decade if we make good health policy decisions today.

Overall, does it concern you that some of these obstacles are hindering investment in the medical technology community?

Well, on the one hand, I am not terribly concerned because investment in biomedicine is at an all-time high. On the other hand, all that research and development spending is not yet showing up in an increasing number of products coming into FDA as applications for approval. Last year, the number of truly new drugs that the agency approved was at its lowest level in more than a decade.

So I am concerned that there are a lot of good opportunities for investment in biotech because of all the new medical technologies that are coming along in fields such as genomics and nanotechnology, but that all that investment is not yet translating into safe and effective products for patients.

Getting Efficient at FDA

You've highlighted a number of changes that FDA is putting into place, some of which are dependent on funding mandated by the device user fee act. Are you concerned that Congress hasn't fully funded the user fee program?

I am concerned about making sure that this program works. As I've told a number of members of Congress, this is a critical program for reducing the time it takes to get truly innovative devices to patients. From a public health standpoint, it's an absolutely essential program. We are trying to make sure that the program gets adequate funding, and I've been working with other parts of the administration, including the Office of Management and Budget, to make sure that comes together.

I want to be very clear that I'm fully committed to the goals of this program. I'm certain that we are going to be able to meet the performance goals laid out in the statute, even though the financing for the program has gotten off to a little bit of a rocky start. We're going to make sure that this program works.

With or without funding, one of the agency's goals is to improve the scientific basis for its reviews. Is that possible in the current environment? Is the device center, specifically, going to be competing with other centers for funding if more money isn't forthcoming?

Well, as I said, I think that adequate funds will be forthcoming for us to meet the performance goals envisioned in the Medical Device User Fee and Modernization Act. But one of the things that has been clear to me throughout my time working here, and is increasingly reflected in FDA's activities, is that there is a lot we can do to apply science to make the development process more certain and less time-consuming.

In our medical innovation initiative, all of the medical product centers—including the device center—announced a new set of programs that they are undertaking to improve the speed and certainty of the development process and make it clear to product developers what they need to do.

With regard to some of the new technologies that are in the pipeline, such as molecular diagnostics and combination products, how is FDA working to develop appropriate pathways and to minimize regulatory obstacles?

The area of combination products offers a good example of how we can help make the whole development process more efficient. One of the first things I did as commissioner was to set up a new Office of Combination Products here, within the Office of the Commissioner. Creation of that office reflects the fact that an increasing number of the products we're seeing aren't merely drugs, or biologics, or devices, but combinations of two or more of those types of products.

FDA recently held a workshop on novel drug-delivery systems, in which both product developers and academic experts participated. And the whole point of the workshop was to identify ways in which we could be clearer about what it takes to get a combination product approved.

So, in areas like this, we are doing a lot more work in guidance development. And we are trying to take into account everything we have learned from products that we've seen as well as from those that are in the investigational stages of development.

Where Will We Be . . . ?

You seem to have a very strong and enthusiastic faith in the scientific pursuit of medicine. How do you see the field changing over the next five to ten years? What do you think will come that maybe we haven't thought of yet?

I don't want to come across as someone who's overly optimistic. What I see now is a lot of potential, but not certainty that we're actually going to fulfill that potential. There is more R&D spending today than ever before, and there are also more products at an investigational stage. That's appropriate, because we are seeing new kinds of medical technologies being developed. The insights from genomics, proteomics, and other technologies are just beginning to have an impact on the products being submitted for FDA review and those coming into clinical use.

Back in the 1980s and 1990s the main model for drug development was the blockbuster drug that might be used on 30 million people after it's fully adopted. By contrast, future development seems to be headed more in the direction of individualized therapies that might be used on only 30,000, or 3000, people. The mechanisms that we currently have in place are not as conducive to developing those kinds of treatments as I would like to see.

So although I think the potential is great, I'm not sure we're actually going to be able to deliver on this promise.

Do you think that medical technology developers have equal obstacles on the technical side as on the business and financing side?

My main focus is obviously on the technical side, since FDA is involved in determinations about safety and effectiveness. Our goal is to identify technical improvements in our processes so that we can get to a determination of safety and effectiveness quicker and at a lower cost.

We're not interested in relaxing our standards for safety and effectiveness. But I think there is a lot of potential for determining that a treatment is safe and effective using modern science in a less-costly and more-certain way than has been possible in the past. That is potentially going to be a big help for product developers.

I think that the financing and business decisions may follow from improvements in the technical decisions. It's going to be easier for product developers to get the investments they need to bring their products to market if the regulatory path is clearer, more certain, and less costly.

Photos by JAMES KEGLEY

Copyright ©2003 MX