We need the FDA to be 100% public funded.
Idea: Eliminate FDA user fees and add $5B per year in public funding to expedite FDA approvals.
- This will lead to many more new FDA applications and less regulatory capture.
- People benefit by getting more treatment options at lower prices.
- Startups benefit by getting to compete with Big Pharma on a more level playing field.
Trend: Nearly half of the FDA’s budget is now generated by user fees:
- In 1992, Congress passed the Prescription Drug User Fee Act (PDUFA), which allows the FDA to collect fees from pharmaceutical companies they regulate.
- A series of bills (MDUFMA, ADUFA, AGDUFA, FSMA, TCA, BsUSF, and GDUFA), expanded user fees throughout FDA’s jurisdiction by 2012.
Problem: The FDA charges millions of dollars per new drug application.
- Tying FDA funding to industry fees creates a regressive, pay-to-play approval system.
- This benefits big pharmaceutical companies who can afford to make many applications.
- When regulatory approval is expensive and time-consuming, incumbents win.
- Biotech startups are forced to sell most or all of their equity to VCs and pharma companies to pay for expensive trials and applications.
- This is a classic example of regulatory capture.
- We all pay the costs of this political failure, and the benefits are all going to a few huge companies.
Remember: If you’re not paying for it, you’re not the customer, you’re the product.
- 100% public funding of the FDA will allow many more startups to submit new applications, increasing our access to life-saving treatments and reducing the power of large corporations to influence our health regulations.
Solution: Pass an bill in Congress to fully fund the FDA through appropriations.
- With just $5B per year in new FDA funding, we can eliminate user fees, fully fund the FDA, and expedite approvals.
- This will level the playing field for startups
How: Cut $5B+ per year in wasteful defense spending.
- The entire FDA budget is still less than 1% of our annual military spending.
- And there is bipartisan support to increase the defense budget to $850B next year.
- We’ve budgeted $10B per year just for Lockheed Martin to make 125 F-35s per year.
- This F-35 program is already over a decade delayed and $165B over budget.
Why: The FDA is our first line of defense in many industries critical to our health.
- There were almost 2X as many FDA approvals from 2011-2020 (410) vs. 2001-2010 (229).
- The next decade should see drug applications and approvals skyrocket as biotech creates many more potential therapeutics.
- The FDA needs to be ready for this surge in new applications!
Opportunity: Making clinical trials faster will fix the #1 bottleneck in drug development.
Compare how much time was spent on Moderna’s mRNA development vs. regulatory work:
- January 9, 2020: Chinese health authorities announce the discovery of a novel coronavirus.
- January 11, 2020: Sequence of full coronavirus genome is published online.
- January 13, 2020: Design of Moderna mRNA vaccine is complete.
- January 14, 2020: Moderna initiates cGMP production.
- February 4, 2020: Moderna ships pre-clinical drug product.
- February 24, 2020: Moderna ships clinical drug product.
- March 4, 2020: FDA approves Moderna mRNA clinical trials.
- March 16, 2020: Moderna Phase I clinical trial starts.
- May 29, 2020: Moderna Phase II clinical trial starts.
- July 27, 2020: Moderna Phase III clinical trial starts.
- November 16, 2020: Moderna publishes interim Phase III data.
- November 30, 2020: Moderna publishes final Phase III data.
- December 18, 2020: FDA issues EUA for Moderna vaccine.
- January 31, 2022: FDA grants full approval of Moderna vaccine.
Future: The FDA should be its own executive branch department.
- The FDA is currently only one agency within HHS.
- Elevating the FDA to cabinet-level status will increase both its funding and oversight.
- The FDA should have a specific agency tasked to accelerating clinical trials.
This idea is a work-in-progress. If you’d like to riff on it, hit me up @neilthanedar on Twitter!