May 28, 2015

Why We Need a Medical Innovation Impact Index

  • Joseph V. Gulfo

    Visiting Scholar
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Regulatory incentives, like 21st Century Cures, while well-intentioned, actually have the reverse effect on medical innovation. Yet, we continue to see more and more of these programs, rather than what is truly needed – a serious root cause analysis of the dysfunction at the FDA, which cripples medical advances. Moreover, a system of evaluating new regulations relative to their effect on medical innovation is sorely needed. 

During the rule-making process for regulations that are economically significant (having a likely impact of at least $100 million), a Regulatory Impact Analysis is required, which includes evaluations stipulated by Executive Orders 12866 and 13563. But, no such analysis exists to evaluate rules solely relative to their impact on the advancement of medical innovation. Moreover, the RIA is not mandated for guidance documents, which are the methods by which the FDA publishes detailed interpretations of its rules, truly where the rubber meets the road.  

Medical innovation is too important to be neglected or left to regulators to weigh. Our understanding of fundamental biology is progressing at a lightning pace and providing tremendous medical discoveries and insights. Patients are demanding more immediate access to cutting edge therapies as evidenced by the Right to Try Law movement. Investors have increased the pace at which they have been allocating capital to the sector broadly. However, over-regulation and the inconsistent application of laws and rules continues to handicap the timely development and approval of new medicines and devices. 


As I learned in high school physics, “Electrons follow the path of least resistance, and people behave like electrons.” For the FDA, it is easier to propose rules and guidance documents with great sounding titles in order to deflect criticism of inadequate performance. For elected officials who need to show activity within their term periods, it is easier to mollify constituents with proposals and laws that give some acknowledgement of their pain (like 21st Century Cures), but accomplish little fundamental change. For drug developers, it is easier to target diseases for which the greatest regulatory incentives exist because this provide the quickest way to maximize shareholder value.  
Seemingly, no one wants to perform the hard work of analyzing the implications of the system of laws, rules, guidance documents, policies, and resultant modus operandi relative to their collective impact on medical innovation. Electrons certainly wouldn’t do that. 

Yet, this is precisely what is needed and what we have set out to do with this week’s launch of the Medical Innovation Impact Index (MI3) Alert at the Rothman Institute of Innovation and Entrepreneurship of the Silberman College of Business at Fairleigh Dickinson University. It is a succinct, real-world based analysis and scoring system. On the positive side, the purported benefits and potential positive impacts on medical innovation are listed and scored zero to 5, based on the likelihood of achieving these objectives. On the negative side, the unintended consequences and potential negative impacts on medical innovation are listed and scored 0 to -5, based on the likelihood of these untoward effects happening. A final composite score (ranging from -10 to +10) is calculated and a recommendation is offered. 

The first MI3 Alert (on Expedited Access Pathways) analyzes two FDA Guidance Documents issued on April 13, 2015 and Senate Bill 1077 proposed on April 23, all three of which are intended to expedite the development of breakthrough devices. Moreover, elements of all three of these programs are embodied in the 21st Century Cures proposal by the House, which actually contemplates even greater exclusivity periods for drugs treating fewer than 200,000 patients and many other incentives. 

Because the proposals are largely redundant with provisions in existing laws and rules (for example Expedited Review, least burdensome approach, reasonableness standard in determining safety and effectiveness, and post-approval studies), we scored this -6 in the first MI3 Alert because it poses only risk to medical innovation with no tangible gain, and will likely do to devices that which the Breakthrough Therapy Designation has done to drugs and biologics – push the development of niche products at the expense of new therapies for huge populations of patients. Therefore, these proposals should not be enacted. 

These guidance documents, Senate proposal, and House 21st Century Cures proposal (which contains many similar and additional regulatory incentive programs), do what electrons would do – follow the path of least resistance without considering the real-world consequences to innovation. Further, they stay far clear of addressing the real problem, which is that the FDA is breaking the law on over half of all new product approval applications by not reviewing and approving them within the statutorily-defined time periods. 

The direction of medical innovation should not be dictated by regulatory incentives, rather, by medical science.