Despite Makary Leaving, Industry Could Feel Pressure: Analysis
The departure of FDA commissioner Marty Makary “comes as a positive move after a period of turmoil in the biotech sector, but until a permanent replacement is found, the industry could be under pressure, according to analysts and investors” who were interviewed for a Reuters analysis. The news service has reported that former commissioner Steve Hahn and former acting commissioner and HHS assistant secretary Brett Giror are among those being considered to replace Makary.
“If the next commissioner is perceived as ideological, rather than technocratic, biotech volatility could extend materially,” Oldenburg Capital Partners founding partner Patrice Mesnier told Reuters. “The market will react less to the individual name than to what the appointment signals about the future direction of FDA.”
Truist analysts told the news service that Makary’s departure was likely to result in an initial positive knee-jerk reaction from investors due to a perception that he was not industry-friendly after he had public disagreements with several drug companies. They said the resignation adds to an already unsettled agency in which the two top positions for drug oversight are held by acting directors who must be replaced. “A prolonged leadership vacuum would likely mean more delays and unpredictability” at FDA, reducing its ability to offer guidance and make credible policy commitments, the Truist team said.
Meanwhile, the drug industry is hoping things calm down a bit as the agency goes through its leadership change. "What we really need from the next leader of the FDA is to calm the waters and reestablish that certainty and predictability," PhRMA CEO Steve Ubl said at Axios' Future of Health Summit. Bristol Myers Squibb CEO Chris Boerner echoed the sentiment. "What we need right now is we need predictability," he said. "Our time horizons are 10 to 15 years. We spend billions of dollars to bring one new medicine to market. And in that environment, we need to know that we've got a very stable FDA that sets consistent rules."
And Senate Health, Education, Labor, and Pensions Committee chairman Bill Cassidy (R-LA) told the Washington Examiner that he hopes newly tapped acting commissioner Kyle Diamantas will only be in this role for a short period because he does not have the prerequisite expertise to oversee the agency’s complex medical device and pharmaceutical oversight. Diamantas, previously the head of FDA’s human foods program, was selected to be the acting director when Makary’s resignation was announced.
Cassidy said he is concerned that Diamantas, a lawyer by training, is lacking experience with the complex issues of medical products, including the use of artificial intelligence in medicine, which makes up “the bulk of their business” at the agency.