FDA and the New Health Economy

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  • 03/02/2015

From this morning's Morning Consult ...

In The New Health Economy, Collaboration Between FDA, Industry, And Consumers Will Be Key

Communication is the key to any relationship – that’s what all the self-help gurus tell us.  In which case, the relationship between the Food and Drug Administration (FDA) and the pharma and life sciences industry should be in for profound, positive change.

In a recent survey, top industry executives told PwC’s Health Research Institute (HRI) that they believe the FDA has become a more communicative and open partner.  Seventy-eight percent of those execs told HRI that the FDA has improved the quality and frequency of its communications in the past two years.  These execs also overwhelmingly agreed that the agency provides actionable feedback and offers more applicable guidance, rules and regulations. These and other findings are reported in depth in HRI’s new report, “The FDA and industry: A recipe for collaborating in the New Health Economy.

If communications, feedback and guidance are improving, can the relationship be far behind? Both in our survey, and in a series of related interviews, it was clear that most company executives believe that their overall relationships with the FDA have improved over the past two years.

It’s certainly a critical time for industry and the FDA to collaborate more effectively.  Both the FDA and manufacturers face mounting pressures from an evolving health sector that places a premium on speedy access to breakthrough, cost-effective and safe medical products.

This is all part of the emerging New Health Economy – a phenomenon driven in part by increased consumer involvement in healthcare decisions and payment.  The $347 billion-a-year pharma and life sciences industry now answers to a new class of consumers who shoulder more of their treatment costs and who demand a greater role in product development.

Some of that pressure comes directly from consumers and their advocacy organizations. Insurers and pharmacy benefit managers are also pressuring drug and device manufacturers as they face rising costs.  Either way, the end result is that companies working to invent novel therapies and win regulatory approval must increasingly demonstrate the value those products bring rather than solely their medical benefits.

Consistent with the New Health Economy’s pressures and incentives, executives’ attitudes have shifted dramatically when it comes to determinations of value.  Forty-three percent now support the FDA evaluating a drug based on both clinical and economic effectiveness. This represents a major swing in sentiment over the past five years; the support for including economic effectiveness was only 14% in 2010.

Our research also showed the executives understand that balancing innovation and risk requires tradeoffs.  To improve access to new treatments, the industry is willing to consider regulatory reforms such as stricter post-market safety requirements and restrictions on promotional activities.  Seventy-one percent of survey respondents agreed that accelerated approval programs should be balanced by stricter post-market surveillance.  Indeed, additional protections once a drug goes to market might help allay fears that patients could be placed at risk by the acceleration of the drug-review process.

But what about those newly-empowered healthcare consumers?  HRI surveyed them as well, and consumers told us they want the FDA and industry to take their views into greater account.  Only slightly more than one-third of consumers (39%) believe the FDA currently incorporates their views in the agency’s review process, and 38% percent say that drug and device manufacturers adequately consider them.

PwC has been periodically surveying the pharma life sciences sector since 1995, and looking back at all that data, it is clear that the relationship between the industry, its chief regulator   and consumers has been one of continuous growth. But it must evolve even further to meet 21st century demands.

A new framework for this complex relationship is needed to ensure America’s perch as a global leader in medical innovation and to focus investment where it will produce the most value.

A closer, more collaborative bond among all stakeholders may create a more efficient development and regulatory process that leads to the next generation of treatments and cures.  As in any relationship, improving communication is step one.



Mike Swanick is Global Pharmaceuticals and Life Sciences Leader at PwC

Bobby Clark is Senior Manager at PwC’s Health Research Institute


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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