Drug Review Process Needs Refinement
Venture capital plays a critical role in the field of life sciences representing $6 billion in 2009, or approximately 34 percent of all venture capital dollars invested. Venture capital is often the only viable source of development funding for many life sciences innovations due largely to the high degree of risk and lengthy time frame before a return on investment can be realized. However, if the risk/reward proposition becomes too unpredictable and risky, even venture capitalists will be unwilling to invest in medical start-ups developing important innovations for patients.
Voicing Concern
A new federal proposal called the parallel review process aims to streamline the regulatory process for new medical treatments at the FDA and the Centers for Medicare and Medicaid Services (CMS). My organization, the National Venture Capital Association, supports the ultimate stated goal of the parallel review process, which is to “accelerate consumer access to new, particularly innovative, safe and effective medical products,” and believe this could help advance medical innovation.
However, we are concerned that for the majority of technologies, there exists a significant possibility that the parallel review process as proposed will create unintended delays in consumer access by imposing a new, national-level review on products that are currently being both approved by the FDA and covered via local Medicare contractors in proceedings that — albeit distinct — are both predictable and appropriately flexible in procedure.
Unfortunately, early stage companies face significant structural barriers within both the FDA and CMS regulatory frameworks. Factors such as unpredictable time frames, lack of scientific expertise and personnel turnover within the FDA have resulted in an inefficient and resource-intensive pre-market regulatory environment. Similarly, payment, coding and coverage challenges at CMS have imposed unnecessary costs and bureaucratic burdens that these emerging companies cannot afford. Until these obstacles within each agency are adequately addressed, we believe combining the two structures is not likely to produce a positive result.
From the perspective of NVCA and its members, the most crucial aspects of any proposal to establish a parallel review process is that the process be voluntary, transparent and predictable; that it be both efficient and non-duplicative; and that it truly expedite access to new and innovative therapies.
In addition, NVCA believes there needs to be greater detail and assurances from FDA and CMS regarding the potential scope of parallel review, how participation in parallel review will be determined, and how data confidentiality will be safeguarded.
NVCA strongly encourages FDA and CMS to circulate for public comment — prior to finalizing any parallel review process or commencing a pilot program — a more detailed draft guidance document that addresses these reservations, and articulates further specifics regarding the proposed implementation of the proposed parallel review process.
The 21st century will be the life sciences century, and the venture capital community will play critical roles in shaping and funding that growth.
Kelly C. Slone is the director of the medical industry group at the Arlington, Va.-based National Venture Capital Association.
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