Veteran device CEO Joseph Gulfo says, “The FDA must be challenged (when appropriate) because it operates in a highly political environment and has strayed from its original mandate.”

The original mandate, according to Section 1003 of the Federal Food, Drug, and Cosmetic Act, is to “promote the public health by promptly and efficiently reviewing clinical research and taking appropriate action on the marketing of regulated products in a timely manner [and that] there is reasonable assurance of the safety and effectiveness of devices intended for human use.”

But today’s FDA does much more than that – and that’s the problem.

Here’s his paper, “The Proper Role of the FDA for the 21st Century.”

And here you can email Dr. Joseph Gulfo directly to see how you can help on this important crusade.

Joseph Gulfo: As you know Joe’s very very persuasive when he read my book and complimented to me it’s very sweet and he asked me to come out here. And I said, “But Joe May 4th is my birthday,” and he said, “What are you? 10 years old?” and …

Audience: Happy Birthday.

Joseph Gulfo: Thank you. And he said, “Look, just come out pose a provocative question, show your book, get some audience input, and do me that favor.” I said, “Okay.” So what’s the provocative question?

Is the FDA too big to challenge?

And the answer is a resounding no, and Joe thank you. Okay.

So we define what we mean by challenge so do we challenge on a pro-product basis? Absolutely.

But do we do the more daring thing of challenging on the broad philosophical basis which our trade organizations are not doing; nobody’s really doing effectively in my view.

And that’s what I’ve done now, I’ve started an institute, I’m part of a think tank where I’m a visiting scholar with economists and I’ve written some papers, we’ll get into it in a little while.

So let’s talk about challenge. Everyone remember Sedasys? J&J, a device to monitor anesthesia propofol so that you wouldn’t need an anesthesiologist. This is a great product. J&J in their restructuring’s stopped promoting it however. But if you look at the path it was arduous, they filed a PMA, they had a beautiful panel 8:2 on the merits, 9:1 that nurses can use this without an anesthesiologist being in the room.

FDA issues a non-approvable letter if J&D filed a petition for supervisory review which is a very formal way of challenging. They forced the agency to give them a non-approval letter so that they could then file for an appeal. Appeal that means dispute resolution that’s big stuff.

The FDA granted that they would do the appeal and then there was clearly discussions between the company and FDA and J&J retracted the appeal and a year later they got it approved.

So J&J was quite successful in challenging the FDA. But that’s J&J.

The prior one that went this route is called Cardima and they didn’t do it so well. Since 2007 was the last time they lost they went all the way to dispute resolution they lost zero to five and the company went bankrupt.

All right, so is the FDA too big for small companies to challenge?

J&J can challenge the FDA especially if you have the goods, and I think that’s one of my main messages. If the quality of what you have is solid I think you absolutely have to challenge the FDA.

Often big companies don’t challenge the FDA as you know because they have nine other products before them and they don’t want to risk it.

But let’s take a look at some of these other companies. Cardima, not so good. Did 23&me didn’t put much of a challenge. Should they have? I actually think they should have. Theranos, no I don’t think they should be challenging the FDA, you guys talked about that yesterday.

Sprout Pharma challenged them and got the female Viagra approved and a lot of political pressure on that. Epigenomics we’re going to talk about that later. They also challenged the FDA in a formal way and they won, we’ll get into it. And Sarepta Therapeutics I don’t know if anyone’s following the Duchenne muscular dystrophy drug, I know it’s a drug but that’s very interesting. I’ve written a couple of editorials that will come out though the next couple of days on that.

So definitely I believe when you have the goods, when your product is unassailable the problem is every program has warts on it; every program has a few warts so it’s really a judgment call. But I definitely think on a product basis we have to challenge the FDA but I really want to get into on the more important I think the philosophical ideological challenging the FDA because I think it will make the product challenges less frequent if we can solve the ideological issues.

So yes I’ve written this book, Innovation Breakdown, I’ve gotten three products approved. The drug for bladder cancer. I ran a few companies the drug medical device and biologic approved for prostate cancer and a device this book is about MELAFind, a PMA device. I write a lot, I wrote this book, I have a second book coming, I write a lot of editorials and I teach cancer biology and a few other things.

Okay so there’s a book review on the Wall Street Journal and the reviewer posed the question at the end. He said, “Considering all that he’s been through, he still believes in a strong FDA and it can be fixed with just a few tweaks.” He’s wrong.

So notwithstanding what Joe said, I am a moderate in this. I have these people at the FDA I have tremendous respect for, I have respect for the fact that they do most of the things that I don’t think are appropriate out of fear. So I am moderate, I don’t think it should be blown up, but I do think that we need fundamental change. So we’ll talk later do you think I’m wrong and can we challenge it.

So this is the, it’s the stock chart of MELA and also the time and events. And I can give a whole presentation just on this, I’m not going to but I will just tell you that … Okay so when we went public we first got a binding protocol agreement with the FDA, very very rare. Anyone ever hear of a binding protocol agreement? Okay, it’s very rare to get.

We invested a year to get it; I didn’t take a salary during that time. The two people I paid during my first year at the company was the regulatory lawyer to help us do that and a reimbursement consultant to make sure we knew we were doing reimbursements; two most important things I think.

All these milestones you can read we were doing well. Even through the downturn in the market we came right back. We were a $300 million company and no revenue. Single product one company … Excuse me, single product public company. Now as per Reg FD if you know the SCC rules, anything that’s material to an investor has to be disclosed. What isn’t material in a single product company?

Everything’s material so our saga played out in front of the world and we often were on the front pages of Wall Street Journal, Fortune and other magazines, so and here our fortune. So here we were expecting a panel day.

We had a tremendous interaction with the agency where they not only told us that we’d be going to a panel meeting in the next quarter, I asked them I said, “Is there any way … I see you have a panel scheduled for tanning booths. It’s the right group to talk about this. It’s a 00:09:08 device on May 25th on March 25th so I suppose you’ll have us March 26th.”

My branch chief whom I have great respect for and like very very much said to me, “No comment,” so that meant he confirmed that was the case. And I said, “Look I’ll tell you what I’m worried about. If everything goes well, I don’t want to be presumptuous; if everything goes well will you have enough time to approve it by May 5th?”

And he said to me, “Joe I’ve heard Thanksgiving, I’ve heard Christmas, I’ve heard New Year’s, I’ve never heard May 5th. Why do you need this approved by May 5th?” and I said, “Because that’s Melanoma Monday. That’s when the American Academy of Dermatology publicizes the heck out of skin cancer 00:09:47.”

He said to me, “Joe, the FDA PR office would love to do a joint announcement with you on the Melanoma Monday so I’ll tell you what, we’ll get all the paperwork done before the panel. If it needs to be tweaked yeah we can get it done in whatever weeks that would be, like nine weeks.”

I thought I was dreaming so I said, “What do you mean by the paperwork?” and he goes, “You know the labeling.” Now I didn’t disclose that, because I didn’t have it
in writing. Thank God I didn’t disclose that.”

So here I am waiting for a panel day, instead of a panel day I got another not-approvable letter and it was a shock and the company really, it never recovered from that.

So we filed a supervisory review and we got called and said, “Let’s make a deal and the deal is if you retract the supervisory review we’ll give you a panel date but one of the elements of our supervisory review is you broke the law. You’ve got to give our first product the panel.”

So he said, “Tell you what we’ll do, we’ll give you a panel if you retract the supervisory review.” And I said, “Thank you, I appreciate that. If you retract the not-approvable letter you’ve got a deal. Done.”

Never retracted the not-approvable letter, so we went into a panel meeting with a non-approvable letter extant. I don’t think it’s ever happened before or since.

And we won at panel. Now you have to read that, it is a section here called ‘The Greatest 15 Minutes of my Life’. It happened at the panel, it was just ridiculous and a little bit … But we won at the panel which I think is huge. Again if you’re going to take on the FDA, if we lost the panel I don’t think we’d have a leg to stand on.

So we won at the panel meeting and then the people part of the review team that loved the product and we went back and forth and fought a little bit but we had a good relationship. Came up to me after the panel meeting, they were embarrassed and they said to me with smiles on their face, “We look forward to working with you. This was great,” but they never responded to my letters and things and now the clock’s ticking.

So I assumed that the denial letter was being written notwithstanding we were approved at panel. So I filed an NDA amendment to modify the claim based on … Normally you do the horse trading at the end but I wanted to push a pause on the clock so I filed an amendment. Still not word, filed another amendment on commitment to a training program. Again just trying to stall a little bit.

And our team – if anyone watches Scandal we put a team together that Olivia Pope couldn’t have put together – and these weren’t one of my ideas. And so we filed a citizen petition in the middle of the review because there was no mechanism, there was no other mechanism for appeal.

J&J can say, “Damn it! Give me the rejection letter and then we’ll come with an appeal.” I couldn’t do that as a single product company. So we filed a citizen petition.

Now all through this stuff, all those machinations I’m losing investors, I’m losing the real blue-chip fundamental investors. Every time your valuation goes down a little bit when you’re in this level, you fall out of the range of the indices, the index funds that have to hold you. When you’re above 300 all these funds have to grab a certain percent of every company in the index. When you’re at 250, so there’s like 250, 200, 150 and as we’re coming down as one fund’s leaving others are leaving. It’s horrible; you couldn’t control it even though we were having some good things.

And we got to the end of the road and we did get it approved. We were left with very few shares authorized and we had, we were in the hands of the deal players. A deal player is a fund that will give you money at a discount the market and take warrants. They’ll sell the stock immediately within a week or two so they’ll make a nice spread and then they have an upside on the warrants.

So you’re in the hands of the deal-players and the shorts. We were incredibly attacked on the shorts and we launched the product not with as much money as we would need to do it and we needed more money to during the missionary phase of the work.

What I loved was I got 62 letters from doctors saying that they wouldn’t have detected the melanomas they had. Actually not, 62 are things we heard sometimes at scientific meetings a doctor would come up to us and say, “If I didn’t have that MELAFind I would have missed this melanoma.”

So there were 62 melanomas I was aware of in the first year that wouldn’t have been caught without us and it felt great but by that point when you read the book I was, I needed to worry about Joseph Gulfo and I needed to leave the company, and I did.

All right so as you know raising money in medical device companies even if you’re public is very difficult. If this were a biotech company in one financing I would have raised $120 million, no I did $160 in 11. And the way you do that, in nine years, the way you do that any of you out there you have to stay close to your investors.

And I remember one investor saying to me, “Joe what I love about you is even when you had bad news you came and visited me.” I think it’s very important for all of you, stay close to your investors, it might be painful at time but it really pays out.

So the way we were able to challenge the FDA and win was on a couple of things. The first was we had a binding protocol agreement which in writing said, “This is what defined safety and effectiveness which was sensitivity and specificity.”

There’s an out clause in binding protocol agreements that if there’s a new scientific issue the FDA can back out of it but they’re supposed to have a meeting with you they never did.

So one of the big parts of all the things that we did in the challenge is we cited the fact that they broke the binding protocol agreement and the FDA instructed the panel to ignore the binding protocol agreement. Yes we had it all in writing, thank you for yeah literally.

The other ace in the hole we had was as we arrived for the panel meeting, I remember actually on the train ride down from New York to D.C. I cried the whole train ride because the person had a clinical ME she would turn the page as we’d look at FDA slides and every so often I’d go 00:16:26 I’d have even like a even a more intense cry than when I was on as I turned she turned right back 00:16:32, “What are they doing?”

And one of the things they did was they redefined safety and effectiveness.

Safety in the Regs is this, they changed it to the definition of effectiveness and they developed a new definition of effectiveness to include lesions in the study that the machine rejected. They tried to concoct it that was intent to treat.

Meanwhile if the machine wouldn’t read on it, how could it be? So one of our experts at panel one of the biggest name in melanoma got up to the panel and he said a story.

He said, “You know I have friends who deal with breast cancer, they’re radiologists. Not one of them ever told me that when a mammogram is unreadable do they call a patient and say, “Great news! The mammogram’s not readable.”

No they call them and say, “Sorry you’ve got to come in for an MRI because the density.” So this point was that you get the point.

So because of these two facts we really rode them hard and we got covered by a lot of media, we got great hearings by people inside the Beltway not just elected officials but think tanks and others and we won.

But in the end when you’re a little company I think the FDA always wins, and certainly happened to MELA.

So I believe in my heart FDA must be challenged for many reasons but on this I’m saying of course when appropriate because it operates on a highly political environment.

It’s not just about the data, it’s not just about your products or the product before you. With Sarepta it’s not just about their drug, it’s about IDA 00:18:14. FDA already caved in to the women’s rights groups on approving the Viagra for women. Do they want to be seen to be caving two in a row, cave-in to the D&D group?

So it’s not just about what you’re doing, it’s about a broader broader thing. I had to
do intensive inside the Beltway activities, there’s a word I’m refusing to use, twice. My last two drug approvals I had to do that, we hit every end point. So I do believe that there’s a tremendous political component and the FDA because of fear, which I’ll get into, because of fear and it’s really not their fault, but it has to be fixed.

Have strayed into areas that they don’t have a mandate to be in. Okay, so what is their mandate? If you open up the Regs this is FDA’s mandate.

Okay let’s just see here, it’s to promote health. So why don’t you all read that, promote health, and this how we’re going to promote health. Now notice here for devices especially reasonable assurance, reasonable assurance.

Now if you go on the FDA website at the time they since changed it. Andy von Eschenbach, former FDA Commissioner and I have been really saying a lot about this mission stuff. They’ve now changed it to their mission is to promote and to protect but at the time they changed their mission to protect. And it’s not, that’s not what Congress told them to do.

And if you just read and down here they gave themselves … So go back up here. Promote health and there’s three words, three words on urgency. Not only promote, promote it in a prompt, timely and efficient manner.

Damn it! Congress wanted new stuff and they wanted it fast. That’s what that says but FDA said, “No, we’re going to promote it and we’re looking for comparative effectiveness. We’re even looking for better prices.”

That’s not their mandate, so the FDA has clearly clearly strayed and very few people talk about this. It’s very problematic.

So every now and then you will find an article written that really represents the truth. There’s so much written by various outlets. There’s outlets that I just wouldn’t talk to anymore because it was obvious that they had a point of view that really lays it out.

So this is from FierceBiotech and it talks about how, it says here that the FDA likes to say that devices are approved as fast or just slightly slower than Europe and they point it to this product, the valve replacement.

And truth be told that was the second generation, the first generation was on the market in Europe four years before approved in the US.

This is from FierceBiotech not from me. And this … I’m sorry FierceDevices sorry. And this is one heck of a product. I mean look at this recent data on patients of intermediate risk, it’s really really a great great product, and US patients were denied that.

The other thing I’d like to say is this is the medical marketplace at work. After the product was approved it was really really well-defined who it’s optimal for. It’s optimal for intermediate risk not the high risk. This is the way the system is designed to work.

What about the WATCHMAN device, 10 years, 10 years. And what really annoys me about the WATCHMAN device, I know we have a couple of docs in the room, the last time I saw a patient we were still calling a PTPTT 00:22:04 now you know. But it was horrible to try to get a patient on Warfarin to have appropriate anticoagulation; you just simply couldn’t do it.

So all the drugs you see and now this device where they compared a Warfarin and there’s not … The P values are just off. The fallacy of that is on a clinical study yes patients take their Warfarin. The nurses call them if their PTPTTs out of whack because they’re coming in monthly and not every three months in clinical practice they get retweaked.

So on clinical trials the results of Warfarin are much much better than they are in clinical practice. So the WATCHMAN had to be approved for those who couldn’t take Warfarin. And I think that’s not right. I think that’s it’s a great device and it got limited and for 10 years.

This came up yesterday, so what does all this stuff that we just talked about do?

What it does is it constricts funding to devices. And look what’s eating device’s lunch now? Now we have LFID coming in in a big way, and apps, and things like that; things that don’t need FDA approval. And Sergey Brin is the one who really said it best. He said, “I’ll never get involved in anything that requires FDA approval.”

But that’s not good for us, because I don’t want to preempt myself for now but this is what’s happening. And so gosh darn it, we better speak up. We better challenge and it better not just be when there’s a drug that hit … sorry, device that hit every endpoint in the whole bit. It’s got to be a more global macro ideological challenge I believe.

This is in the news, this is good, this helps our sector when you have acquisitions and things. But what I really liked about this article was 40% of adults in the country will have some form of heart disease by 2030. We need more devices and we don’t just need them for the ultra-acute end, we need it for that as well.

Okay so what goes on in Washington again why we have to challenge is not helpful.

So here you have 21st Century Cures are people following that? Are you reading it? I read the whole bill, it took a lot, but here is a proposal for breakthrough therapy of devices and you can read the full criteria.

Okay but guess what, same criteria from 2008. We already have provisions for this; they’re in the Regs.

So why do we need all this 00:24:53 over breakthrough devices? I got expedited review for MELAFind. Back then there were six ways you could expedited review, we satisfied four of the six. So what’s all this? It’s a PR effort. It’s the same thing going on in drugs and devices, same exact thing.

Where nothing part of the breakthrough therapy for drugs and devices wasn’t already on the Regs. In fact if you lay out the four expedited programs, they all have the same first sentence and the provisions are just cosmetically different.

Okay so the Senate Health Committee decided to move forward with some of the 21st Century Cures Provisions. And the first one I want to see some more jaws drop.

Can you imagine that Congress need to put in a law to retrain all FDA personnel on least burdensome approach? Least burdensome approach is 101. It’s what you guys do every day. Why does that have to be in the law?

It has to be in the law because FDA is not practicing it. Why are they not practicing it? They have congressional oversight, that’s why. So this dropped my jaw there and now we have the breakthrough therapy stuff which I just showed you is not necessary. So are these really needed? Okay now let’s go to the other side.

You have this, all this is going to do is give you more health IT and apps and all that kind of stuff which I like, I don’t them making diagnoses but I like that’s okay. And I think this is fine I mean I think we need a lot more on combination products but that’s about, that’s good. But what are we going to have now between breakthrough therapy and the this kind of stuff? What’s happening?

We’re seeing investment in HIT and apps go way up with the breakthrough therapy. The same in devices is going to happen from drugs. I was at a conference I teach cancer biology so I go to all the cancer companies I can see so at one conference I was there were 100 cancer companies presenting. I couldn’t see 100 I think I saw 45 of them.

You know how many diabetes companies there presenting? We had small companies, three.

Obesity companies, five.

Why? Because the easy pathway on drugs and biologics is for these ultra-niche cancer claims that then you throw in a mutation or two and you get deep carving. That’s what’s going to happen with devices. So what’s going to happen?

Most of the stuff we consider medical devices is getting left out, it’s not covered.

And I think this is a huge problem and back to t
he theme of the talk, do we need to challenge? Yeah, we’ve got to challenge.

As I said the trade groups I remember when I was going through with MELAFind I remember when I wrote the book I said to some of my D.C. insiders, “You’ve got to get me into see 00:28:20 man, you’ve got to get me in.” “Joseph, they don’t want to see you.” “What do you mean they don’t want to see me? I wrote a book.” “They like what you went through, they get to buy you at a song for going through that.”

So it’s very disheartening. So what happens? We move to products that don’t require challenge and those are very incremental, and then we run into the risk that reimbursers won’t pay for them because they’re so incremental. So we’re not getting innovation and all your efforts you’re not getting paid for it.

Or we do the ultra-breakthroughs. Let me tell you what happened with drugs and biologics. In 2014 breakthrough therapy I think came out in 2012, 40% of all new drugs and biologics for orphans were for little niche diseases. In 2015, 48%. What do you think is going to happen next year? Even more. You have major major companies projected. Major companies like Bristol-Myers are going to be the leaders in specialty drugs. No one’s doing anything about heart failure and diabetes. Same thing is going to happen to medical device.

So what do we do? Speak out. I’m speaking out, I write these medical innovation impact index alerts where I bring up stuff like we’re talking about. Vincent DeVita speaking up, he’s a very well-known oncologist and he makes a great point. The incrementalism of just attacking one mutation at a time or using one drug when something else fails.

We know to get cancer you need eight mutations. Your body has to accumulate, actually it’s eight pathways that have to be affected, it could be done by four or five mutations but the point is why aren’t we treating cancers with four or five agents? That would be innovation. We’re not because that’s not, the regulatory system’s not geared up for it.

Patient groups are magnificent, patient groups are really really great. They need a little direction but they’re excellent. And philosophy has to change, I’m coming out with another paper with the think tank in D.C. that’s going to offer definitions of effectiveness and we’re going to get into that in a little while.

Proper Congressional oversight instead of fire alarm oversight which I’ll get to in a second. We need police patrol oversight and I’m coming up with another proposal for shadow panel meetings. What I thought was really interesting with Sarepta. 36 experts, 36 experts in the 00:30:57 wrote a letter to the FDA in advance of the panel meeting in support of this drug. And at the panel the panel voted seven to three against it. There’s clearly something wrong with the panel system.

I mean Sarepta is too small a company to be able to have paid off … We’re all accused of paying off … They’re too small a company to be able to pay off 36 of the top D&D doctors.

So again the FDA has changed its mission to protect health, and again I’m not defending the agency, out of fear, out of fear. We have to fix that, but let’s go back to what Thomas Aquinas said about, “If that’s the highest priority then what are we even doing?” What are we even doing?

So this is really interesting to me, a company Epigenomics has a blood test for colon cancer. Every once you have a colonoscopy, in fact mine to do because I have follow-ups I’ve got to go every two years, but every one over the age of 50 should have a colonoscopy but a lot of people don’t do it. So you have a stool test by exact sciences and this group came up with a blood test.

And basically what they’re saying is if you’re for people who don’t get a colonoscopy let’s at least do something. So they did a great trial, they compared the performance sensitivity and specificity of their drug, excuse me, their diagnostic in patients going to colonoscopy so you could define the sensitiviety and specificity. FDA agrees with them, they go through the whole thing, big trial, great results.

And the FDA says to them, “Well, you know we don’t really like the results because we want to see whether your product increases utilization of colonoscopy.”

What are we talking about? What are you talking about? You see the FDA has replaced, I’m going to show you in the next slide later, they have replaced effectiveness with kind of the utility.

So the company asked the FDA they went back and forth at the agency. Finally they filed the supervisory review and they won. So it was rejected and finally they won. And the FDA didn’t know what feedback to give it so they just decided, “Let’s just review what we have, 00:33:19 and put it in.”

Again I wrote this paper called ‘The Proper Role of the FDA in the 21st Century’ and it got picked up by the Boston Business Journal. When I first saw the title I shook a little bit because I didn’t know where he was going with it because I am Italian, Scalia’s Italian, assuming I subscribe to every thought, it’s okay I do like 00:33:47 but I didn’t know where this was going.

But I love where it went as an originalist; I am an originalist. We have to get back to the letter and the spirit of the laws, the original law. So yeah again the FDA is now ordained themselves as the arbiters of clinical utility and that is not the law. So this is the paper, I’d love all of you to read it.

Joe I’ll give you a link for it. And I have a follow-up paper coming out. This paper sets the problem up which I’m going to go through right now and we have the follow-up with the solution which I’ll give you a graphic from that one.

So in a nutshell the FDA in my view our view is straying from its public health mission which is good safety and effectiveness all based on average patient trials. That’s fine into the private health decision-making between a doctor and a patient.

And this private health decision-making is where personalized medicine happens based on safety and effectiveness or drugs and devices whether or not they should be used in a particular patient.

So the FDA is definitely encroaching on private health decision. And basically this is how it’s done. In the good old days not too long ago safety and effectiveness this is what safety and effectiveness meant. And because of fear we have new definitions basically of safety and effectiveness. No more.

Safety and effectiveness now is safety determined by benefit risk not by considering the true safety of the product. Benefit risk is in the guidelines in the law but it was not used to extend here where you’re not even basically looking at whether a drug is safe for use by the conditions prescribed.

And then effectiveness is clinical utility. Clinical utility patient outcomes both of these have to be proven in large-scale, large-scale trials both for devices and drugs and biologics and that’s wrong.

So what we contend in this paper is that FDA’s role in the medical marketplace is to put new products on the top of the funnel based on safety and effectiveness. Then you have early adopters, patients, drug companies and device companies want to differentiate their product from others on the market doing larger studies. Once they’ve gotten through the hurdle payers now, payers now saying, “Well I’m not paying for that. Show me there’s a difference.” Okay run a pilot with the payer in.

All these things then take all the approved products and we riddle them down to the ones used the most, the ones that are most useful. And what we contend in the paper is the FDA has moved itself by moving itself into moving into clinical outcomes and things, they’ve basically moved themselves to wanting to be here.

They want on approval, on approval to b
e able to say to doctors to dictate medicine, “Use it this way. This is the appropriate.” Basically they want to be able to prove with guidelines, “This is when to use this, it’s how to use it.”

And that’s not the system because often as you all know it takes years for a new product, drug biologic device to settle into usage, to settle into the marketplace where they actually learn who is best to be used for. So if FDA is moving here, and they are, that’s why the pre-approval requirements are going up, are just off the charts.

And what drives us all is what I call a vicious cycle of oversight. And what typically happens is some catastrophe happens on the outside there’s either some macro event like Ebola or something else. Or more importantly when a drug or a device, the meshes and various drugs, cause problems.

What does the FDA do? What happens? Congress calls in the FDA and beats the living daylights out of them, just beats them up. I’ve just testified at a Senate hearing I made the point.

Even with Avandia a great drug, FDA did the right thing with Avandia and they still got beat up for it. So even sometimes when they do the right thing they beat you up for it.

So FDA goes down the Hill, gets their head handed to them. They go back home and what do they do? They recoil, they’re not going to let that happen again. And how do they recoil? You’re all nodding your heads so I don’t have to beat this to a dead horse.

And then what happens? And then now Congressional oversight, the police patrol oversight fails. The police patrol oversight is what keeps an eye on are they practicing least burdensome approach.

So that fails and then what happens? The next time law gets written and we’re writing law every five years now with PDUFA and MDFUA. The next time law gets written the recoiling gets incorporated into the law and this is what we have.

And no one’s talking about this. I find it very upsetting.

And what do we get? We get mounting regulations. And what does that do?

Mounting regulations and this is really really germane more to devices than drugs. There’s in the law it even states that if you can do it aftermarket, do it aftermarket. Basically it almost says it that blatantly. Drugs too there’s a balance of pre-approval requirements and post-approval but what all that I just talked about has done is this.

We’re now pre-approval requirements much more than post-approval but post-approval big as well and just mounting. And this is why drugs take longer to be approved and the costs are going higher and higher and I’m sorry you made a great point this morning when we were having breakfast. And then we’re not even capturing things people aren’t even developing because of this. So all this innovation is not happening and we don’t know how to capture that.

So some people are doing things about it, the Right-to-Try movement. Right-to-Try says if you’re dying gosh darn it let people have access to drugs that have at least gotten through phase one. Zeke Emanuel doesn’t like that, I don’t know why. I don’t know anyone who doesn’t like that. I know why the drug companies don’t like it because if they do have a heart and they do let someone use it who’s on death’s door.

We have a technical medical name for patients like these ‘Trainwrecks.’ And you give an experimental drug to a train wreck patient, if they weren’t in failure they’re going to be soon. You get the whole point, and so those captured as adverse events for the drug, and even sometimes get the company put on clinical hold. So the companies don’t want Right-to-Try either. That has to be fixed and I’ll be down in D.C. next week so at this briefing on Right-to-Try.

This is really interesting so this is back to the D&D so Nice. Everyone knows about NICE in the UK. NICE basically doesn’t want to pay for stuff. NICE is paying for a D&D drug that got approved on a conditional basis. PTC therapeutics drug. This drug FDA refused to file, didn’t even take it to a panel yet it’s approved in Europe and NICE is even paying for it.

And at the Sarepta meeting panel meeting last week they stated a study, they didn’t do a randomized study but they compared to another group of boys in Italy and Belgium versus boys on a trial. Four-years study doing biopsies so you’re doing a randomize. The kids on the trial after four years walked on average two football fields longer in six minutes than the other kids. Panel members still voted against it. The 36 experts wrote a letter to get it approved.

And so I’m done. My solution is we need to define for FDA what effectiveness is.

This I worked out for drugs and biologics, I’m working on one for devices.

If anybody has ideas I’d love to hear them but I think we have to define, we need a law what safety and effectiveness is. And fine, if you sponsor want to spend the money and go and get a claim in clinical outcomes, go for it. That label will be coded green and if you just do one for 00:42:17 signs and symptoms that label will be coded black. So it’s a solution that’ll be in the second paper that I’ve written.

And I’ve written a second book, it has nothing to do with any of this; not quite. It doesn’t have a lot to do. I’ve always managed small medtech biotech companies and the publisher of this book called me and he said, “Well you have a lot of management lessons in here, why don’t you write a book on pulling that out for little companies and put it in and write another book.” Which I really went to town on the difficulties and challenges in managing little companies. That’ll be out in September.

And if you want Joe I’ll come back next year, even on my birthday and I’ll talk about that, but thank you very much.

(Applause)

Joe Hage: So during your presentation Mom walked in.

Joseph Gulfo: Oh, Mom she didn’t know that 00:43:15 yesterday.

Joe Hage: Is that right? And she leaned over to me and she said, “Is this guy supposed to be interesting?”

Joseph Gulfo: My mother died in 2006 so it’s good to be reminded of what having a mother is like so thank you.

Joe Hage: And I replied to her, “He is one of the speakers I’ve had in four years.”

Joseph Gulfo: That’s very sweet, thank you very much.

Joe Hage: Seriously in fact, I left your presentation midway through to get stragglers out of breakfast to make sure they came and heard this.

Joseph Gulfo: Thank you, okay.

Joe Hage: What can the people in this room, first of all do you … Did he make a very compelling argument here?

(Applause)

What can the people in this room do to help this originalist on his crusade?

Joseph Gulfo: I’d love ideas. I want to write, I already I came up with the framework for the drugs and biologics on the various categories of approvals … Sorry, categories of substantiating effectiveness. I’d love if anyone has ideas I’d love to hear what you think they would be. I think we’ve got to separate devices and diagnostics.

One of the things that really bugs me about diagnostics they did with Epigenomics they’re doing it some others that just because you can measure something prove to me, prove the clinical utility of that measurement. I think that’s all. I don’t mind it if a company wants to do that but if you just want to measure what the parameter is I think you should have basic approval. So input on what the different levels of effectiveness for devices should be I could really use so.

Joe Hage: What is the best way to give you that input?

Joseph Gulfo:
My email, I’ll leave some cards around.

Marc Fine: Yeah hi Marc Fine from OtoNexus. Quick question about panels. It seems like this vague anonymous beast but does it come down to individuals?

Joseph Gulfo: The panel?

Marc Fine: Yeah that person the human being on the panel who’s got it in for you or has their own agenda.

Joseph Gulfo: Listen, I’ve been I’ve run three panels in little companies where I was the main presenter and it’s I had a panel where at half-time the FDA came up to me reviewer and said, “Joe, I’ve got three things for you: number one that was a phenomenal presentation we’d like every company present the way you did. Number two you’re an honest guy you presented your bad equally to your good. Number three you got it in the bag.

We came back in the afternoon, one panelist slapped the table and said, “I don’t care how good the data are. Complete response it’s the completely wrong entry point for this disease. 11 to zero unanimous no.” One panel member and he told me later it’s a guy I published with in the past, he told me later, “I was just trying to make a point about XYZ,” and I said, “And you took my panel, you used my panel to make a point?”

So you have that. You have panel members who love being panel members that they want to fall in line with what the FDA wants. You have others just wanting to be quoted. It’s a bad system, it’s a really bad system.

Joe Hage: In his talk Joe mentioned that he’s done this before, before MELA Sciences.

Joseph Gulfo: Yeah, I didn’t need this one, I already had, I already had my painful period.

Joe Hage: They just tried to get it in and yeah.

Joseph Gulfo: Yeah.

Joe Hage: And you were actually kind of brought in as a ringer, like if there’s a guy who can get this through this is the guy. So for those who aren’t as skilled as you are to have this kind of challenge, it’s beyond daunting.

Joseph Gulfo: And I hate to say this because I don’t want to sound, that’s why I wrote the book. The message of the book is if innovation is this difficult that I had to go through what I went through to get this product through, we’re not going to have innovation. If we continue to make it be this difficult we’re not going to have real innovation, and that’s really the message of the book.

Joe Hage: So given the events that transpired, and I’m sure you’ve had plenty of time to ruminate on this, knowing what you know now is there something along the way that might have changed the outcome? Had you this, had you not that. Given the personalities, given….

Joseph Gulfo: I really think we got caught up in a macro event at FDA. The FDA just got a new Head of Devices who put, who wanted to come out with a whole … All of us were in the same boat at the same time where they wanted to come up with new guidances and devices. I know a VC who told me, “I went down and I got on my hands and knees and I said to them, “We don’t care where you set the hurdle, don’t care, but just don’t tell us you’re going to be changing things. We don’t know what to do with that, we don’t know how to structure our investments.” And they didn’t care.

So I think that we just, we really were in the wrong place at the wrong time and I know that’s a little bit of a cop-out but I honestly don’t know what I would do differently with the FDA. I know what I’d do differently in a company, read the book, I should have done a little more diligence on XY or Z, I should have done better market research. It’s very hard, one of the very provocative things I think is how do you do real market research with the end user when you don’t have your final product yet?

And I think that’s really where we fail, I’ll explain. The experts advising us told us we don’t need help with freckles, we don’t need help with these kind of things, we need help with the atypical pigmented skin lesions. We put it on the market, guess what the docs are doing, they’re putting it on freckles. We need training for freckles.

How could I … To me that’s the big mistake I made. How could I have gotten that input before I had a working prototype? How do you do that? Market research with the end users not from the experts is really really key. So I made mistakes but I’m not, I can’t say I’m the regulatory side.

Joe Hage: Dr. Joseph Gulfo will be speaking at 10x in 2017, let’s hear it for him.

Joseph Gulfo: Oh that’s very sweet. Thank you very much Joe.

(Applause)