It's that sad time of year when football season has ended, and is replaced by tax season. That first quarter of the year when stores everywhere would rather "sell it than count it". Cars, shoes, those cool kitchen gadgets that will end up in a dumpster in five years - all priced to move! Which brings me to the latest entrant into the deal-making world, the US FDA. Wait, what?!
Okay, hear me out. Because FDA has changed a lot in the last 5 years, and it's worth spending some time on this topic. There seriously may be no better time than now to work with the agency, which is something your competitors may be taking advantage of right now. Okay, the last part was a bit of fear-mongering...or was it?
So how did this all start? Some will credit the current administration for this new approach by FDA, and cite Trump's 2-for-1 deregulation strategy. But we all know that nothing in the federal government moves that quickly, so it must have started earlier. In fact this trend was seen well before Trump's inauguration.
Over the past few years we've seen the agency be very progressive on PMAs associated with companion diagnostics, often pushing studies to post-market that heretofore were required pre-approval. And there was Illumina's clearance of the MiSeqDx, which made a device Class II exempt that previously would have been placed on a traditional regulatory path.
More recently the agency has created a category of tests for genetic health risk (GHR), which can not only be marketed direct to consumers but also may be exempt from the FDA’s premarket review (after a manufacturer submits it's first premarket notification). As my friend and former colleague Steve Gutman used to say, 'truly unprecedented.'
But wait, that's not all. If you act now you might also get a clearance for your oncology panel test offered in your CLIA lab, much like Memorial Sloan Kettering did last year. Or you could have a LDT oncology / companion diagnostic panel that simultaneously gets CMS coverage and FDA approval, as Foundation Medicine received. This last two are so revolutionary - especially when you factor in how they got to market - that I'll discuss them (and CMS' interesting thoughts on reimbursement) in a subsequent blog.
Okay, so what does all this mean? A couple of thoughts. First, FDA is getting pretty creative in the way it is trying to regulate LDTs, a trait that many of the aforementioned tests share. FDA is also leveraging the breakthrough language in the recent 21st Century Cures Act to aide this effort. And if Scott Gottlieb's recent comments on the need for Congress to overhaul LDT and IVD regulation at AdvaMed and the World Economic Forum are any indication, they aren't done.
Second, and perhaps most significant, is that there seems to be a shift in how FDA looks at some of the more innovative technologies and their regulation. Make no mistake, companies are still required to fill in all the blanks on a regulatory application and adhere to the quality system regulations (remember Theranos?). But FDA seems willing to be a bit more flexible about how and when all that work gets done, which is allowing breakthrough devices to enter the market quicker and with less regulatory burden. Some conjecture on my part, but the agency appears to be moving towards making concessions in order to put LDTs (and other innovators) under the regulatory tent, thus breaking the status quo.
Which brings me (finally!) to why you should care. Quite simply, FDA appears to be rethinking how they regulate medical devices, particularly IVDs. They are asking Congress for legislative help. They are willing to work with industry to change the way FDA operates. And the advantage to companies like 23andMe and Foundation Medicine is that you get a piece of regulation that others will need to follow if they want to take the same pathway you did. Classic economic barrier to market entry stuff.
Those that take advantage of this moment in history could find themselves in a more favorable market position over those that choose to wait and see, particularly if you add in the regulatory climate in Europe. In fact, this might just be the deal of the century!