Why Big Pharma is cringing over Trump’s pick to Head the FDA

When President-elect Donald Trump announced that he was considering Libertarian Jim O’Neill to become the new head of the U.S. Food and Drug Administration (FDA), Big Pharma collectively cringed at the very notion.

O’Neill is a venture capitalist with Mithril Capital, a company founded by the infamous Peter Thiel of PayPal fame and a significant investor in the vaping company NJOY, which is now facing bankruptcy.  Should O’Neill get the job, then he will be responsible for implementing, revising, or revoking the highly controversial FDA deeming regulations that threaten to wipe out the entire vaping industry.

FDA deeming regulations favor Big Pharma

These regulations were a pet project of the Obama Administration, and Donald Trump is very vocal about repealing almost anything that his presidential predecessor has signed into law.  And since O’Neill is a long-time associate and confidant of Peter Theil, a leader in the vape industry, many members of Big Pharma suspect that the would-be FDA Chief will want to get rid of the FDA deeming regulations altogether.

This would hurt Big Pharma where it counts the most – the cash register.  After all, it is pharmaceutical companies like GlaxoSmithKline and Johnson & Johnson which hold the patents on nicotine replacement therapies (NRTs) like “the patch” and nicotine gum.  And these Big Pharma products were infinitely more profitable before the age of vaping came into being.

The FDA deeming regulations only help Big Pharma to regain their stronghold on the NRTs market.  This is one reason why the pharmaceuticals industry cringes at the very thought of Jim O’Neill as Director of the FDA.

O’Neill aims to change FDA drug approval process

But O’Neill’s cringe-worthiness doesn’t stop there.  He has also argued quite decisively over the years that the lack of a functioning free market in the pharmaceutical industry is a huge problem.  It is perhaps the most significant reason why the U.S. medical system and related prescription drugs are so terribly expensive compared to any other nation on the planet.

“We should reform FDA so there is approving drugs after their sponsors have demonstrated safety–and let people start using them, at their own risk, but not much risk of safety. Let’s prove efficacy after they’ve been legalized.”
-Jim O’Neill from his keynote address at the 2014 Rejuvenation Biotechnology Conference

Not only does this stance lack the basic understanding of how the drug approval process truly works in the U.S., but O’Neill’s rather radical opinions will likely rub many of the over 17,000 FDA staffers the wrong way.  There’s a long-standing tradition in the FDA to remain non-committal in the drug approval process, to not get involved in the approval process of any one particular medication.

This protects the FDA from accusations of favoritism of one Big Pharma company over another. The safety of a medication is usually determined by a team of independent reviewers.  The FDA staff usually just compiles all the data and provides the official stamp of approval once everything is ready.

O’Neill is not a man of science

O’Neill’s lack of scientific background could be viewed as downright insulting to FDA employees, many of which have years or even decades invested in their field of expertise.  Furthermore, even the pharmaceutical companies are not huge fans of a safety-only approval process.

Like the FDA deeming regulations, biotech companies like Regeneron Pharmaceuticals actually want the FDA to make it tougher to get drugs approved so that the market doesn’t become saturated with copycat medications.  Too much competition always drives down prices, no matter if the company is making automobiles, toaster ovens, electronic cigarettes, or the next AIDS medication.

Will Jim O’Neill automatically repeal the FDA deeming regulations as many in the vaping industry hope?  Will he immediately toss out the currently complex and somewhat time-consuming drug approval process for something more expedient?  Most likely not, because Jim O’Neill, like any leader of industry or presidential cabinet post, cannot make immediate and significant change alone.

He needs the support and allegiance of his 17,000 employees who will be the real movers and shakers of change within the organization.  And like it or not, these FDA employees have developed both personal and professional relationships with many of their counterparts in the Big Pharma industry.  If their friends in Big Pharma are frustrated, this frustration will likely roll downhill into the FDA itself.

Without the support of his staff, O’Neill’s ability to implement change at the FDA could be painstakingly slow, be it to the FDA deeming regulations, the drug approval process, or anything else for that matter.  And Big Pharma has the deep pockets and political influence to place enormous obstacles in front of Jim O’Neill along the way.

Article Credit: Matt Rowland

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