Hot topic: Will Trump’s DOGE cutbacks slow drug approvals in the US?
Like other industries, Biotech and Pharma are viewing the Trump administration with some trepidation.
One concern – among many – is whether job cuts instituted by the US’s Department of Government Efficiency (DOGE), led by Elon Musk, will slow down the rate of drug approvals.
Among the agencies hit are the Food and Drugs Administration (FDA), as well as the National Institutes for Health (NIH) and Department of Health and Human Services (HHS).
Pharma companies have got used to going to the FDA ahead of the European Medicines Agency (EMA) – not just because of the sheer size of the US market, but also because the FDA has tended to be speedy.
But back in the 1990s European regulators often approved drugs before the FDA – sometimes by a matter of years.
Now, there’s a fear that job cuts could snarl things up Stateside.
Around 700 FDA staff are thought to have lost their jobs in the DOGE firings, around 10% of its payroll, according to The Associated Press.
During a fascinating discussion held online earlier this month by the Financial Times, titled What Will Trump’s Second Term Mean for Pharma?, a group of experts mulled the issue with the FT’s Oliver Barnes.
John LaMattina, former president of global R&D at Pfizer, now a non-executive director at PureTech Health, said Pharma would be “distressed by the cuts at the FDA”.
He explained: “You have a smaller FDA; you have drugs approved more slowly. You’re going to maybe have people less experienced in reviewing things. That can slow down the whole process.”
Patti Zettler, John W. Bricker Professor of Law at Ohio State University, said: “An under-resourced and under-staffed FDA is not going to be faster, right? … So, if we see large staff cuts to the agency, it’s just not possible to do things in ways that will be more industry-friendly and more innovation friendly.”
Catherine Arnold, Partner, Centerview Partners, an investment bank with a strong focus on biotech, said companies large and small were “on alert” due to disruption at the FDA.
But it isn’t all doom and gloom. Arnold said the Trump administration was keenly aware that China was picking up the pace when it came to biotech innovation and approvals – with one of the reasons appearing to be China’s less burdensome approvals system.
Trump won’t want to lose the US’s lead in life sciences to China on account of (what he might see as) regulatory red tape.
Arnold said this could prompt the administration to “try to accelerate the [drugs] review processes”.
John Martin, of Capitol Counsel, noted Trump cut regulation in his first term, resulting in a large rise in the number of generic drugs approved.
Streamlining regulation was “one area where President Trump can deliver for the pharmaceutical industry, to look to decrease the time it takes for drugs to come to market”.
Doing so would help biotechs survive “the valley of death”, he added.
But LaMattina wondered if Trump would want to be seen as “doing a favour” to Pharma, especially as making drug approvals easier “may imply that they’re not as rigorously studied”.
Arnold also noted that nothing “concrete” was actually happening on changing the drug approvals process right now.
In the shorter term, it is quite possible that the FDA won’t be too badly affected by headcount cuts. Shortly after mass firings were announced, some staff working in regulation of medical devices were contacted and told their terminations were “rescinded effectively immediately”, The Associated Press reported in late February.
Participants:
Catherine Arnold, Partner, Centerview Partners
John LaMattina, Former President, Pfizer Global Research and Development
John Martin, Partner, Capitol Counsel
Patti Zettler, John W. Bricker Professor of Law, The Ohio State University
Oliver Barner, US Deals and Activism Correspondent, FT (chair)
