Rating the FDA by Division

In previous work, I have argued that asymmetric incentives make the FDA too risk averse with the result being excessive drug lag and drug loss. The FDA, however, is not a monolithic agency, it is divided into divisions which oversee different types of drugs. The divisions have different cultures, expectations histories and understandings. In my latest paper, written with Tufts researchers Joe DiMasi and Chris Milne, we put aside the question of global efficiency and ask a different question. How do the FDA divisions rate against one another? What we find is quite surprising: some of the FDA divisions appear to be much more productive than others. From the abstract:

After reviewing nearly 200 products accounting for 80 percent of new drug and biologic launches from 2004 to 2012, the authors find wide variation in division performance. In fact, the most productive divisions (Oncology and Antivirals) approve new drugs roughly twice as fast as the CDER average and three times faster than the least efficient divisions—without the benefit of greater resources, reduced complexity of task, or reduction in safety. The authors estimate that a modest narrowing of the CDER divisional productivity gap would reduce drug costs by nearly $900 million annually. The worth to patients, however, would be far greater if the agency could accelerate access to an additional generation of (about 25) drugs. Greater agency efficiency would be worth about $4 trillion in value to patients, from enhanced U.S. life expectancy. To reap such gains, this study encourages Congress and the FDA to more closely evaluate the agency’s most efficient drug review divisions, and apply the lessons learned across CDER. We also propose a number of reforms that the FDA and Congress should consider to improve efficiency, transparency, and consistency at the divisional level.

Andrew von Eschenbach a former Commissioner of the FDA and Director of the National Cancer Institute and now chairman of the Manhattan Institute’s Project FDA wrote a foreword to our paper. Eschenbach writes:

The authors of this report have taken a giant step…by assembling and analyzing a wide array of publicly available information about the relative performance of individual CDER divisions….Continuous, quality improvement measures routinely used by private industry could serve FDA leadership, sponsors, and patients by discerning factors that contribute to an optimal level of performance and, more important, disseminating such practices to ensure that all divisions achieve that performance. The payoff for such an effort could be enormous.

…Process improvement should not be a controversial proposal. An organization like the FDA—which is over a century old and which has maintained its current, basic organizational framework for decades—requires new tools to adapt to changing circumstances.

…I have enjoyed no greater privilege in my professional career than serving alongside the FDA’s talented staff. Today, the agency has more potential than ever to help the U.S. lead the world in advancing a biomedical revolution, one that will have an impact on every aspect of America’s economy and health-care system by improving health, increasing productivity, and reducing overall health-care costs.

…this report should be viewed as a positive, constructive contribution to a desperately needed dialogue on how to assist the agency in fulfilling this vital national goal.


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