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Trump chooses Gottlieb to run FDA; Pharma breathes sigh of relief

[March 11, 2017] By Toni Clarke

WASHINGTON (Reuters) - U.S. President Donald Trump has chosen Dr. Scott Gottlieb, a conservative health policy expert with deep ties to the pharmaceutical industry, to lead the U.S. Food and Drug Administration, the White House said on Friday.

If confirmed by the Senate, Gottlieb would be in charge of implementing Trump's plan to dramatically cut regulations governing food, drugs, cosmetics, dietary supplements and tobacco.

Gottlieb is well known on Capitol Hill, where he has testified multiple times on hot-button health issues, including complex drug pricing matters, and is viewed favorably by drug companies and pharmaceutical investors. He sits on the boards of several small drug and biotech companies and is an adviser to GlaxoSmithKline Plc <GSK.L>.

"Thank God it's Gottlieb," Brian Skorney, an investment analyst at Robert W. Baird, wrote in a research note. "We view this as a favorable development for the sector."

Gottlieb was chosen over Jim O'Neill, a libertarian investor close to Silicon Valley billionaire Peter Thiel, a PayPal co-founder who now advises Trump on technology and science matters. O'Neill's stated view that drugs should be approved before being proven effective generated widespread alarm.

Gottlieb, 44, is a resident fellow at the conservative American Enterprise Institute think tank and a partner at a large venture capital fund. He is a former FDA deputy commissioner who has advocated a loosening of requirements needed for approval of new medical products.

"Scott knows how the agency works and he will move it forwards, though maybe not always in ways the agency is comfortable with," said John Taylor, a lawyer and president of compliance and regulatory affairs with the consulting firm Greenleaf Health and a former acting FDA deputy commissioner.

In addition to his public health and health policy roles, Gottlieb has for the past decade been a partner at New Enterprise Associates, a large venture fund with investments in the life sciences, medical technology and healthcare services.

Critics of the nomination say Gottlieb's financial background present an array of potential conflicts of interest.

Dr. Michael Carome, director of Public Citizen's Health Research Group, said Gottlieb "has spent most of his career dedicated to promoting the financial interests of the pharmaceutical industry." If confirmed, he added, "he will have to be recused from key decisions time and time again."

SIGNIFICANT CHANGES AT FDA EXPECTED

Stephen Ubl, a spokesman for the Pharmaceutical Research and Manufacturers of America, said it "looks forward to working with Dr. Gottlieb in his new role and engaging with him and the Agency as they seek to modernize the drug discovery and review process."

Gottlieb, who declined to comment on the nomination, is unlikely to up-end the FDA in the way O'Neill might have, but he is nonetheless expected to bring significant change, including moving the agency to increase flexibility in the clinical trial development process.

In this he will be supported by the recently passed 21st Century Cures Act which instructs the FDA among other things to consider the use of "real world evidence" to support new drug applications. This could include anecdotal data, observational studies and patient reports

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Dr. Scott Gottlieb is seen in this American Enterprise Institute photo released in Washington, DC, U.S., March 10, 2017. Courtesy The American Enterprise Institute/Handout via REUTERS

"People don't want to take chances with safety, but there's increasingly some clamor to be more flexible on the efficacy side," said Kathleen Sanzo, who leads the FDA practice at the law firm Morgan, Lewis & Bockius. "You need to have some signal of efficacy. The question is, how much?"

The FDA has attempted to push back against moves to sideline randomized clinical trials, long considered the gold standard. In January it issued a report documenting 22 cases in which drugs that appeared to show promise in early trials turned out to be either ineffective or unsafe or both in larger trials.

One of Gottlieb's priorities will likely be to streamline the process for approving generic versions of complex, difficult-to-copy therapeutics. He has stated publicly that he does not believe the FDA has good tools or policies to move such products and has advocated the creation of different approval standards.

"He's a thoughtful and nuanced kind of guy, and not solely an industry shill," said Jim Shehan, head of Lowenstein Sandler's FDA regulatory practice.

A survey conducted by Mizuho Securities USA Inc of 53 pharmaceutical executives found that 72 percent favored Gottlieb over other potential candidates. Many described him as knowledgeable, experienced and balanced.

"Gottlieb is someone who the industry and investors view as an incremental positive," said RBC Capital Markets analyst Michael Yee. "The industry and investors need rational scientific logic and an understanding of risks and benefits."

Patient advocates welcomed the news.

Gottlieb "has firsthand experience at the FDA and as a physician that has treated patients understands the breadth of work that needs to be achieved on their behalf," said Ellen Sigal, founder of Friends of Cancer Research.

(Reporting by Toni Clarke; Additional reporting by Deena Beasley; Editing by Alistair Bell and Lisa Shumaker)

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