The New FDA Commissioner

That the appointment of Scott Gottlieb to head the FDA has elicited a decidedly mixed response is a good thing. I fear consensus as much as the late Christopher Hitchens loved dissent which, he believed, was an indicator of a healthy democracy, which means that rather than facing the morgue, the US might be going through her healthiest days in these times.

Gottlieb has served on the boards of industry, and earned a nifty pocket money doing so. Detractors argue that he’s unfit to head the FDA because of his financial conflict of interest (FCOI). I will not revisit the arguments for and against physician’s FCOI with industry, because all arguments for and against have been made, and it’s unlikely that anyone’s mind will change with new evidence or new arguments. Suffice it to say that both sides have plausible arguments, and we’ll never know the truth, because to know the real impact of physician’s FCOI with industry we need parallel universes with everything held constant, except the degree of physician ties with industry, and measure the net benefits to society in terms of morbidity, mortality, drug prices, and innovations.

Further, Gottlieb’s FCOI with industry can work in opposing ways. He may, indeed, favor certain industries because of his intimacy with them, rather than what they do, which will lead to regulatory capture. But he may not. In fact, he may be so aware that his FCOI will invite disproportionate scrutiny that he will overcompensate by being harsher on industry than someone without FCOI. Like Newton’s Third Law of Motion, every action has an equal and opposite reaction, for every eventuality conjectured there’s an equal and opposite eventuality which stands to reason.

Let’s borrow an analogy from foreign affairs. Would you send an envoy to solve a problem in Iran, Yemen or Pakistan who doesn’t have knowledge about these regions? Would you send an envoy to diffuse tensions in Pakistan who is hated or loved by the Pakistanis? Sure, the envoy might have their own biases, but they also have local knowledge, or expertise. Expertise and bias, usually, not always, go hand in hand. To reduce bias, we trade expertise, and vice versa.

Gottlieb’s familiarity with industry means that he knows how they think in the boardroom – where decisions are made. If he knows how they can game the system, he must surely also know how to prevent the gaming. His intimacy with industry is at once his strength and weakness. To assume that his weakness will be exploited is as much an assumption as believing he’ll use his strength. The point is that we just don’t know.

I’m disinclined to leave regulatory capture just yet because it’s important and I believe it exists, but works in mysterious ways. A few years ago, I attended a course in cost-effectiveness analysis (CEA), given by one of the economists who worked for Britain’s National Institute of Clinical Excellence (NICE). The material went above my head, and I fidgeted and checked my e-mail every five minutes. Sitting next to me paying deathly attention was an economist who worked for big pharma. He wanted to understand the method behind NICE’s CEA. The analysis is complex and I won’t bore you with it, suffice it to say he was going to back calculate the minimum sample size for a randomized controlled trial for a new drug which met not just the statistical power, but also NICE’s maximum uncertainty threshold.

Was the economist from pharma gaming the system? Of course, he was. Is this regulatory capture? Technically, no, but the effect is the same. NICE’s transparent, though complex, methods are a boon for pharma, because it knows exactly what to do to meet the CEA threshold. Everyone loves transparency, but many don’t see the merits of caprice. Set a threshold and the threshold becomes the ceiling of aspiration. Transparency is the mother of incrementalism.

I’m more persuaded by Gottlieb’s ideological conflict of interest (ICOI) than his FCOI, because I believe ICOI drives policy more than anything else. You could say that I have an ICOI towards ICOI. Gottlieb, it seems, has a libertarian disposition, and believes in market dynamics. This is relevant, but here, too, the directionality this will take is uncertain.

I believe that we need more libertarian regulators and more bleeding-heart-liberal CEOs in Wall Street. One advantage in having an ideology which contradicts the mission is that it keeps unbridled belief in the mission at bay. Neither regulation, or its absence, is an unlimited good. But, arguably, a libertarian is more likely to see the limits of regulation than a progressive, and a progressive is more likely to keep Wall Street’s Gordon Gekkos in check than a libertarian. Before some smart Alec asks: where’s your evidence? I’ll concede, this is conjecture, as is nearly everything about FDA and pharma.

Another libertarian who headed a regulatory agency was David Brailer. He was appointed by George Bush as the first Czar of the ONC (The Office of the National Coordinator of Health Information Technology) – an agency Brailer believed shouldn’t have existed. But he believed in electronic health records (EHRs) and interoperability. It’s a shame his tenure ended with the Obama administration as, arguably, he wouldn’t have permitted the lunacy of Meaningful Use. Perhaps the history of EHRs would have been different if ONC had a libertarian its helm.

Ideology is neither necessary nor sufficient. I recall how the conservatives lost control of their sphincters when Donald Berwick was made the head of CMS. Why? Because Berwick loved Britain’s NHS, so conservatives feared that he would bring socialized medicine to the US. Did he? Don’t bother answering – that was a rhetorical question.

The danger of unfettered, though understandable, despising of Trump is in believing that everything in the US was utopian in 2016. This clearly is not true. The FDA has several shortcomings, notably the barrier it creates in getting a generic drug to the market. Martin Shkreli exposed these shortcomings when he raised the price of pyrimethamine several hundred folds. The FDA can do better. I’m amazed by the constituency which believes that doctors should constantly strive to be ‘better”, but seems to spare regulatory agencies of this aspiration.

The problem with arguing about the FDA is that arguments devolve into a strawman – should the FDA exist or not? This is silly. Arguments about the FDA are not arguments of kind, but arguments of degree, which are more challenging than arguments of kind – which regulations are needed, which aren’t? How do we do a nuanced deregulation? Just as we have a “Right Care” movement, perhaps we need a “Right Regulation” movement.

FDA’s approach to drugs for rare, particularly rare neurological diseases, is muddled. It seems to be struggling in that no man’s land, the Gaza Strip, between patient-centeredness and paternalism. Full disclosure – I love paternalism. I’ll give one example. The FDA rejected Alemtuzamab (it has since been approved) for multiple sclerosis (MS) because, amongst other things, it causes glomerulonephritis. No offense to nephrologists, but MS patients would rather be continent than be spared of proteinuria. But someone in the FDA thought glomerulonephritis was such a dreadful complication that unsuspecting MS patients, who embarrassingly lose key motor functions and die prematurely, should be spared of it. You know the mantra – safety first. I know of MS patients who forked out $90,000 going to Germany for this drug.

This is a unique opportunity to experiment with selective deregulation of the FDA, but there’s only so far deregulating is possible without deregulation affecting innovation. Joseph Schumpeter intuited that regulations are what induce entrepreneurs to take on risky ventures. Regulations are like a guest list to an exclusive night club in New York. If every Tom, Dick and Rajeev can get in to the club would you bother dressing up for the evening?

Is Gottlieb the best choice to lead the FDA? I don’t know. It’s like asking if The Godfather is the best American movie of all times – we’ll never agree, and I’ll never agree with any alternative movie you throw at me. Is Gottlieb an appropriate choice to lead the FDA? I believe so. I wish him luck.


(About the author: Saurabh Jha is a radiologist and contributing editor to THCB. He can be reached on Twitter @RogueRad)

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4 replies »

  1. I’m with Paul on this one. Is it now a given that to avoid conflict, we MUST appoint people with no experience in the area to be governed/regulated? Has it really come to that? Would I be automatically ineligible to regulate health insurers (fictionally) because I was once the CEO of a health insurer, even if I no longer have any financial or other ties with one? Yes, I might have to be vetted; questioned as to my views on subjects to make sure I was not so insurer-biased that I could not be trusted to make decisions based on the facts and laws rather than my perceived biases; and my expressed views on the subject such as here on THCB, reviewed for evident biase. But I sure know health insurers.

    It seems that Gottlieb would be even less “conflicted” for his role with FDA than I would for regulating health insurers based on his background. Very experience people have all sorts of interactions and intersections with industries; those are the people we need in times like these to govern. Remember how Democrats savaged Betsy DeVos for her lack of background in public schools? Would Democrats have preferred a former school teacher? But wouldn’t a former school teacher be disqualified for conflict of interest?

  2. I suspect that you know that there has been a longstanding conflict over Kashmir between Pakistan and India. What you are advocating for here is, is that the final determination for Kashmir (and Jammu) be decided by a panel composed entirely by representatives from just one of the interest countries, either Pakistan or India. (Lets leave out China for now.) Furthermore, the panel will be composed of those who also have a vested interest, financial or otherwise, in the outcome favoring their own country. In this case could you still have an impartial outcome? Yes, but it is not likely.

    Still, if you think one of our primary problems in medicine is looking after the interests of the pharmaceutical industry, then he is probably a god choice. Also, he must have tons of energy as he sits on the boards of 3 pharmaceutical firms, a big(get?) VC firm and a bank. Where does he find time to do all of that?

    Query- Gottlieb looks fairly young in his pictures. Where do you think he goes once he is no longer commissioner?

    Also, speaking of straw men, I have never read or heard a single writer claim the following. Please feel free to cite anyone who thought the FDA was utopian before 2016.

    “The danger of unfettered, though understandable, despising of Trump is in believing that everything in the US was utopian in 2016. “

  3. The problem with conflict of interest is that the people who throw the term around the most (politicians, journalists) have their own conflicts that they generally fail to acknowledge because to do so violates their own world views. Their conflicts don’t matter, because (obviously) they’re doing things for the right reasons. The other sides are bad because (obviously) they must be bad and wrong and horrible. This is a double standard.

    The majority of stories charge Gottlieb with “deep ties to the pharma industry” with the same seriousness you would link a candidate to the mafia or the North Korean leadership.

    This oversimplifies things.

    / j

  4. Gottlieb’s deep understanding of pharma and very public writings and speeches about his criticisms of the FDA and his clear prescriptions for reform make this an excellent and transparent choice for head of the FDA. He will likely face loud opposition since most of our medical policy “experts” have such deep and abiding faith (and personal financial and power interests) in an ever growing and powerful regulatory state.