How to Fix the FDA - Neil Thanedar

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.

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:

Development:

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.

Regulatory:

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!

Published by Neil Thanedar