Notes from JPM: Daschle Disses DTC

Tom Daschle's keynote address on health care reform began with an overview of the system (or lack thereof) and its limitations. We admit our attention wandered a bit when he got into a list of areas where there is a "broad consensus" about the problem. You know, lack of transparency for consumers, too little coordination of care, the menace of DTC advertising.

Wait, what was that last one?

One of the problems with the health care system, in Daschle's telling, is that "people see things on TV they like and demand their doctor give it to them. Especially drugs."

We're not sure how broad the consensus is on that point. At least in the Grand Ballroom of the Westin St. Francis....

Corr Returns to HHS: Another Piece in FOBs Puzzle

Bill Corr will be Health & Human Services Secretary-designate Tom Daschle’s deputy secretary.

The position requires Senate confirmation. Corr has been an advocate of tougher government controls on tobacco, which often draws the ire of some Republicans in the Senate. As a long-time aide to key Democratic health figures on Capitol Hill (including Daschle), however, Corr’s confirmation is a formality.

In addition to working as chief counsel and policy director for Daschle for two years, Corr has valuable experience within the HHS bureaucracy, acting as an advisor and chief of staff to Clinton Administration HHS Secretary Donna Shalala. He has also been a leader of the Obama HHS transition team, catching up on the broad array of current initiatives.

From biopharma’s perspective, the most important quality that Corr brings to the new position is a familiarity and commitment to an approval pathway for follow-on biologics. Corr was Congressman Henry Waxman’s (D-Calif.) primary staffer for the Waxman-Hatch generic drug law in 1984.

Corr was a forceful advocate for establishing a clear route for quick approval of generics at the end of patent terms as a way to cut drug prices and reduce drug marketing activities – in a period when drug marketing was a pale version of the current level of promotional support.
In fact, despite the rapid success of the Waxman/Hatch legislation in creating a generics drug business, Corr was not pleased by the ability of the program to bring down drug prices rapidly.

He held a hearing two years after the enactment of the law to show that drug companies were still charging high prices. That hearing also showed the unanticipated effect of driving companies to expand dramatically their research budgets (from 8% of sales to around 12-15% of sales) to try to find products to replace products facing generic competition.

Corr won’t be able to devote the same type of focused attention to the development of follow-on biologics legislation, but he will be able to press FDA for action and he won’t need a long-time to learn the ins-and-outs of the issues. There won’t be long delays trying to discuss the philosophy of follow-on biologics at the top level of HHS.

Corr’s appointment may affect the FDA selection process in a variety of ways.
From his Congressional background, Corr shares the most with Josh Sharfstein (head of the Baltimore Health Department). They both served Waxman, though in distinctly different generations: Corr in the late 1970’s and early 1980’s and Sharfstein recently. That connection, however, could cut both ways. There may be subtle reaction against putting too many people recognized as disciples of Waxman in key positions throughout HHS. FDA watchers have already begun speculating that Sharfstein’s candidacy is losing momentum.

By temperament, Corr is closer to the Cleveland Clinic’s Steven Nissen.

Through his commitment to anti-tobacco campaigns, Corr shares a common theme with former FDA Commissioner David Kessler.

Frank Torti Tapped As Acting FDA Commissioner

Drum roll, please….The next commissioner of the Food & Drug Administration will be chief scientist and principal deputy commissioner Frank Torti.

According to an email message sent to HHS staff on Friday evening, Torti will become acting FDA commissioner come Inauguration Day, once Andrew von Eschenbach leaves office. Torti will serve under President Barack Obama until a permanent successor is named.

The announcement comes more than a week before the transition will take place. After 300 meetings with department and agency staff, HHS chief of staff Rich McKeown said in the email message, “the next phase of Transition involves the departure of our team on January 20, and the arrival of President-Elect Obama’s team later that day.”

“In order to create a clear path for leadership transition, I am attaching a list of senior leaders who will become the acting heads of their respective agencies and offices (or in some cases, remain as heads of their respective agencies and offices) until the new Administration appoints individuals to various leadership positions.”

HHS secretary Michael Leavitt will leave the department once President-elect Obama takes office. Assistant secretary Charlie Johnson will lead the department until Secretary-designate Tom Daschle is sworn in. “Once Secretary-designate Daschle is confirmed by the Senate and sworn in as HHS Secretary, he will assume leadership of HHS,” McKeown’s email says.

Once that happens, Daschle is expected to quickly announce his picks for the heads of each agency. At his Senate confirmation hearing last week, Daschle said that the Obama transition team had been aggressively interviewing candidates, and that he hoped to start building his new leadership within the next few weeks. (We've filled up the ethernet with quite a bit about potential commissioner candidates; you can start here, here and here).

But at least for now, Torti will be The Man at FDA. So what do we know about him? If you attended FDC-Windhover’s FDA/CMS Summit for BioPharma Executives in December, then you heard his keynote address first-hand. But if you missed it, you can check out this story from “The Pink Sheet.”

But we can’t help but point out that we called this one back in June—despite rumblings from Torti’s colleagues at Wake Forest that he would be returning to academia as soon as the next president took office.

In many ways, Torti is the logical pick: under the Federal Vacancies Act, Torti’s position as principal deputy commissioner puts him in line to become acting commissioner once von Eschenbach departs. Having joined the agency less than a year ago, he carries no baggage. And he comes from an academic (not political) background—the perfect profile for a caretaker commissioner.

But as recently as early December, Torti had not yet been approached about the job—at least not to the point, he said, where he would have to sit down with his wife and discuss a longer stay in Washington than was originally planned. But, hey, a lot can happen in a month.

Here are some of the other top-level acting positions announced by HHS:

The Centers for Medicare & Medicaid Services will be headed by chief operating officer Charlene Frizzera; acting CMS administrator Kerry Weems will step down;

The Centers for Disease Control & Prevention will be led by chief operating officer William Gimson; current director Julie Gerberding will leave office;

The National Institutes of Health will continue to be led by acting director Raynard Kington;

The Agency for Healthcare Research & Quality will continue to be headed by director Carolyn Clancy; and

The Office of the Surgeon General will continue to be held in an acting capacity by Steven Galson (more on his future plans here).

Has Drug Importation Finally Fizzled?

Senators Byron Dorgan and Olympia Snowe issued a highly upbeat press release today on the prospects for their drug importation bill, which they say they’ll reintroduce later this month. The headline on the release claims their bill “will finally pass Congress.” The release makes a point of noting that both President-Elect Barack Obama and Senator John McCain co-sponsored their bill the last time it was introduced in the Senate and claims that the new president “supports the legislation.”

But the rah-rah tone of the release is belied by a real lack of enthusiasm from the incoming administration. As a candidate for president, Obama’s health care platform initially said he supported importation, but after the drug-tainting scandals hit the press (think Chinese heparin), the campaign’s health policy advisor, Dora Hughes, made a number of appearances at which she did her best to let people know that was no longer the case. (See The Pink Sheet coverage of this topic).

And many Democrats who want to undertake major health care reform see re-importation as a small-ball distraction. New House Energy & Commerce Chairman Henry Waxman has felt that way for many years. (See here in The RPM Report.)

And yesterday in the HELP committee’s courtesy hearing with Obama’s nominee for HHS secretary, Tom Daschle, Bernie Sanders asked about his support for importation. Daschle’s response was evasive. Here it is in its entirety:

“You put your finger on the most important aspect of this effort, which is to ensure the confidence and safety of the drugs wherever they many come from. Many of our drugs today are manufactured abroad and imported as domestic product, even though they’re manufactured abroad. And so some consistent policy with regard to the manufacture and the sale of all of our drugs I think is in order. And I’d love to work with this committee and certainly with you Sen. Sanders to make sure that we come up with the best policy.”

If you can detect any hint of enthusiasm in that response, you have more sensitive ears than we do. It sounds more like a response to a question about making sure we don’t have more tainted heparin fiascos. If the incoming administration wanted to make drug importation happen, don’t you think Daschle would have said so in no uncertain terms? After all, this was a hearing full of self-congratulatory sentiment among Democrats after their resounding victory in November, not to mention warm and fuzzy feelings over the presence of Ted Kennedy, who’s in treatment for cancer, and Daschle, who was ousted from the Senate in an embarrassing defeat when he was Senate majority leader.

While the Dorgan/Snowe bill may well pass Congress, it wouldn’t be the first time an importation bill has made it through. The first time was back in 2000, when a Republican Congress passed legislation saying the HHS secretary could allow drug importation if the secretary could certify that the imported drugs would be safe and save money – and it was President Clinton’s HHS secretary, Donna Shalala, who refused to certify.

HHS Secretary and the FDA Commissioner

Everybody's talking about the selection of former Senate Majority Leader Tom Daschle as the next HHS Secretary. To read our take, check out The Pink Sheet DAILY. Now that the Daschle pick has been made, everyone's attention is turning to FDA Commissioner. We've given you our list of initial possibilities here and here and here.

But we wanted to use this space to make a nuanced, but important, point about what say the HHS Secretary may have on the commissioner pick. It could be very little.

In addition to Senate HELP Committee Chairman Ted Kennedy, and a few other prominent Senate leaders, the pick may come from just a few internal White House advisers. One former senior White House adviser told us this not too long ago:

"Whenever the HHS Secretary made it clear they didn't want to get locked out of the FDA commissioner process, we made sure to lock them out." White House advisers, this person said, would even literally lock their notes inside a safe when they were done for the night to ensure there were no leaks.

In the Bush White House, Assistant to the President for Presidential Personnel Clay Johnson was critical in the commissioner choice, conducting the interview process. Johnson is now OMB Deputy Director for management.

Daschle may have tremendous influence on who the next commissioner is, or even make the choice himself. The point, though, is he also may not have any say at all, or only a marginal one.

We just want to urge caution in assuming Daschle will make the pick.