PUBLIC POLICY

Throughout the life sciences industry, companies are expressing increasing interest in cross-sector ventures to develop innovative combination products. While exploring ways to create productive partnerships, companies and their investors are very concerned about the shape of the public policy environment for such new business ventures.

In this keynote presentation, former FDA commissioner and CMS administrator Mark B. McClellan, MD, PhD, examines today's changing regulatory and reimbursement environments, offering observations about where current trends are heading and how companies can help to shape that evolution. The presentation will cover the following topics.

In the following interview with MX editor-in-chief Steve Halasey, McClellan describes some of the key areas where public policy is undergoing significant changes.

MX: How would you assess the status of the current regulatory and reimbursement environments as they relate to the development of combination products?

Mark B. McClellan: As we are speaking, the most important FDA-related legislation in four years is moving through Congress. It will certainly be enacted before October.

Although the focus of this legislation isn't on combination products per se, it includes some major elements that might help speed the regulatory pathway for combination products. This new legislation includes a lot of support for the critical path initiative, which will create opportunities for FDA to strengthen its activities related to developing guidance and providing greater support for innovative areas such as combination products.

The exact form of the final legislation will be known by October, and then it will begin to be clear what FDA is planning to do in response to the new legislation.

On the CMS side, last year, while I was still there, we put together a plan for developing a framework for combination products. That framework hasn't been released yet, but agency staff are working on it. So again, by October there may well be more policy and guidance information.

So overall, it would be fair to say that the regulatory environment and the reimbursement environment are both changing, and a lot of new influences will be shaping those environments before the end of this year.

From your perspective, what are the key areas that should concern companies that might be involved in cross-sector partnerships or combination product development projects?

Overall, looking at the flow in existing regulatory and reimbursement pathways, there isn't a lot that one would considerable a desirable set of precedents. So, for instance, the gap-filling approach that CMS has attempted to use for diagnostic products doesn't seem like it's going to work very well, and CMS has acknowledged that.

But there has also not been as much specific information as people would like about what kinds of procedures are going to evolve in place of current processes. And because these are new areas, there haven't been many cases to look at—whether successes or failures.

Again, this is a dynamic process. By October, it will be yielding a lot of interesting things to talk about.

When you were FDA commissioner, you stimulated the agency's critical path initiative with the observation that the healthcare system isn't getting a lot for its investment in medical research. Do cross-sector development projects have the kind of potential that will repay efforts to streamline their path to market?

Yes, absolutely. There is tremendous potential for these technologies to produce the more-effective treatments that are going to really make a different in the patients who receive them, while also avoiding side effects and risks.

But when you look at the actual record of accomplishments, there aren't a whole lot of products on the market that are successfully achieving this goal. And part of the problem is that combination products require a different kind of development paradigm that our regulatory and reimbursement processes aren't traditionally very well suited to address.

But there are some important opportunities with the new FDA legislation and with FDA's new efforts to develop better regulatory pathways in this area. And CMS is pitching in through its efforts to provide guidance and build a framework for thinking about targeted therapies and codeveloped products, so that future coverage can be broader.

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