Tuesday, May 15, 2007

The Import of FDA to Biotechs, CEO Entourages and a Few More BIO Thoughts

I just wanted to post a few more impressions I had from the BIO annual meeting in Boston. One thing that struck me in particular is how little high-level attention smaller biotech companies give to FDA and CMS affairs in general. I understand that CEOs travel the country trying to raise enough money just to keep the lights on, but in the end, it doesn't mean much if FDA won't approve the product or if CMS won't pay for it. The "We'll Cross that Bridge When We Come to It" strategy just doesn't work anymore. Biotechs need to be engaged in the approval process from the earliest stages to understand the types of studies FDA likes best, the benchmarks, the key people within the agency, and the approval standards in a particular disease area.

I rarely see the top management of smaller biotech companies attending FDA town hall sessions or speeches by senior FDA officials. There's also an assumption that if FDA approves it, CMS will cover and pay for it. Done and done. Outside of oncology, that is becoming less and less true. At The RPM Report, we have heard often from CMS officials that they want to see reps from a company with a developmental product when the Phase II study is getting underway in order to start reimbursement discussions.

One exception is Medimmune CEO David Mott, who has always appeared to me to be very engaged in FDA/CMS activities. How much did he get for selling Medimmune? Oh, I forgot, $400 million. I'm not saying there's a link, I'm just saying.

One thing I like to observe when I'm people-watching is the size of CEO entourages. At BIO, Biogen Idec CEO James Mullen was rolling with about five or six people when he sat in on a drug safety session featuring Biogen R&D neurology VP Alfred Sandrock. By comparison, I recall Merck CEO Richard Clark flying essentially solo at PhRMA's annual meeting in Washington a few years back. Clark's predecessor Ray Gilmartin was known to keep a fairly low profile as well.

Stepping into the political realm, HHS Secretary Michael Leavitt has a group of handlers that arrive well in advance of his speeches in order to keep improvisation to a minimum. Rep. Henry Waxman often comes to events alone, without handlers, and even drives himself, a rarity in Washington. Do any of you know of particularly large CEO entourages? Or CEOs happy to eat lunch alone? We would love to hear about it.

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