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As the FDA Takes Center Stage During COVID, Big Changes Could Be Ahead

TheStreet talks with Food and Drug Administration expert about what to expect under Biden Administration, potential picks to head the agency, and emergency-use authorizations.
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It's hard to fathom how big a role the Food and Drug Administration can play in our lives -- and investments. But the FDA has a massive reach that covers foods, drugs, medical devices and more. It has in the past played a role enforcing labeling of otherwise harmless fruit juices, taken up the fight against the tobacco industry and most recently is rapidly evaluating life-saving vaccines for COVID-19.

“The FDA regulates about 25% of everything that people spend money on,” says Aaron L. Josephson, an FDA expert at the law and consulting firm Mintz, who closely follows the regulation of medical devices, pharmaceuticals and vaccines. 

But, says Josephson, the federal agency is not very well understood by most Americans. 

"People know the FDA, but they really don’t understand how the work is done and what the FDA is doing in terms of how products are evaluated and how food is kept safe."

In a way, it's kind of like the Federal Aviation Administration: There's a lot going on behind the scenes everyday, but you only really think about the agency when there's a jet crash. COVID-19, of course, was the FDA's "jet crash" moment. Suddenly, the FDA, along with its clunky jargon like "emergency-use authorization," became household terms. The emergency authorization, after all, is the reason vaccines by Pfizer  (PFE) , Moderna  (MRNA)  and now Johnson & Johnson  (JNJ)  are available, and that therapeutics and tests got OK'd quickly during the pandemic. 

But more than a year into the coronavirus crisis, the course of the FDA is likely to change. Following controversy under the leadership of Dr. Stephen M. Hahn during 2020, the FDA could see big changes under the presidency of Joe Biden. President Biden will soon nominate a new chief to lead the agency. His administration's priorities will influence those of the agency, as well. 

Josephson during a phone interview offered TheStreet his expectations for the FDA in the coming years, including front-runners for the agency's top job, what to look for from the new administration, and how it will repair the agency's reputation after last year. The following exchange was lightly edited for clarity and brevity. 

TheStreet: We've been hearing various names tossed around to lead the FDA. Who do you see as the front-runners for the FDA commissioner job?

Josephson: Based on all of the buzz, the front-runner seems to be acting commissioner Dr. Janet Woodcock, who was the head of the Center for Drug Evaluation and Research at the FDA for many years, and had other senior positions at the FDA. She was also involved in Operation Warp Speed. My sense is that she is the front-runner, but there is concern among some lawmakers that, because she was overseeing the drug center, there is some responsibility for the opioid crisis. So, you’re seeing some lawmakers from states that were hit hard from the opioid crisis come out and speak out against her. I don’t know if that’s enough to derail her nomination if she is nominated.

Another name, Dr. Joshua M. Sharfstein (of Johns Hopkins Bloomberg School of Public Health), is looking less likely to be the nominee. 

But another name I’m hearing is Dr. Luciana Borio, who oversaw public health preparedness for the National Security Council (and was an acting Chief Scientist at the FDA).

TheStreet: Let’s step back, and look very broadly at the FDA. It really has a wide umbrella, covering food, drugs, medical devices, vaccines... . We’ve seen past leadership go after arguably benign matters – such as juice labeling. Yet, now, you can buy things like cheap pulse oximeters from major online retailers, and then see the seller disappear weeks later. Do you expect the FDA to broaden its reach to these types of devices in any meaningful way?

Josephson: A lot of attention gets paid to new products that the FDA licences or approves, but less attention gets paid to the types of things you’re talking about – the enforcement, the surveillance of the market. There are a variety of reasons for that, but that work never really stopped. It’s possible that was slowed down in the Trump administration, which was viewed as more friendly to industry -- and that was clearly anti-regulation. But I’m not sure that type of work ever stopped.

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Also, there’s actually been a trend, at least in medical devices, to really move away from using enforcement tools … and more toward working with companies to improve the quality of their operations. … taking more of a hand-holding, rather than a punishing, approach. … I think that will continue. But certainly it’s no license for companies to do bad things and think they will get a pass on it. That was not the case under Trump and I don’t think that will be the case under Biden.

TheStreet: Right now a term everyone is hearing about is "emergency-use authorization." Going from the last administration to this one, we've seen the heavy use of EUAs because of COVID-19. What are some of the risks and benefits associated with this and is there much historical context?

Josephson: The emergency-use authorization is a relatively new authorization used by the FDA, created in the early 2000s. It really hasn’t been used all that much, (but was) during the Ebola outbreak and Zika… It’s really a streamlined pathway to getting a product authorized for use. The other side of the coin, though, is an EUA requires less evidence for the FDA to grant it. Generally, the standard for the FDA giving permission to market a product is that it is safe and effective. With a EUA, it’s that it’s safe and may be effective. Certainly, that’s subject to a lot of interpretation.

So, I think it’s going to be hard for the FDA to police the market now. I think you are going to have a lot of products that have been emergency authorized and that will be out in distribution, for which there is not a full appreciation for safety and effectiveness. They weren’t required to go through the full evaluation process. One of the things that the community should be looking for is how the FDA is going to help these companies that have EUAs transition to fully approved products, or how are they really going to enforce these EUAs, which technically expire when the public health emergency is over. … 

TheStreet: What do you see going forward with the Biden administration?

Josephson: The first priority is obviously addressing the COVID pandemic and getting that under control. And, that goes hand-in-hand with the Biden team needing to restore some credibility to the FDA.

So, my sense is that the Biden administration should want the FDA to get back to doing its routine business, which is not inconsistent with how the Biden team is approaching other areas of government by ... installing well-known heads of cabinet departments.

There is other routine business that affects companies on a day-to-day basis, but doesn’t have the pizzazz that a global pandemic has.

A long simmering issue that will bubble this year or next is lab tests and how those diagnostic tests will be regulated. The FDA has over the years taken a hands-off approach to regulating these tests, but they have more recently been taking a more active approach to regulating them. There’s some opposition to that and there's some legislation that is being introduced. So, that would have a pretty significant impact on that clinical laboratory industry around the country. It goes far beyond diagnostics for COVID.

TheStreet: That would include companies like Quest Diagnositics  (DGX) ?

Josephson: Exactly. It’s exactly the type of services that Quest provides.

There are other areas, too. The FDA is funded in part by user fees, which are paid by the industry. Those are complex user-fee programs that are negotiated between the regulated industry and the agency, and then they go through a Congressional review and a re-authorization every five years. We’re in the midst of it right now. So, that’s something folks should be looking at.

Another area that I’m tracking is digital health. They created a Digital Health Center for Excellence last year, with the goal of improving how the agency regulates digital health. But there is a lot of uncertainty of how the FDA will proceed with its plans for digital health.

And, lastly, now that Biden is president, one of the key issues will be cancer. His son died of cancer and that was a key issue when he was vice president. ... I think a lot of folks are eager to see how the Biden-Harris administration reinvigorates cancer research and cancer treatment.