Vivek Ramaswamy’s push for FDA changes could boost his wealth - The Washington Post

The co-leader of President-elect Donald Trump’s initiative to cut government spending has a financial stake in the biotech firm he founded, which is developing experimental drugs.

By Daniel Gilbert. November 25, 2024 at 1:34 p.m.

  • Vivek Ramaswamy’s Role: Ramaswamy, a former biotech executive, is co-leading President-elect Donald Trump’s initiative to cut government spending and streamline the FDA.
  • FDA Criticism: Ramaswamy criticizes the FDA for creating unnecessary barriers to innovation and suggests faster approval processes with more post-approval surveillance.
  • Conflict of Interest: Ramaswamy’s financial stake in Roivant Sciences, a biotech firm he founded, raises concerns about potential conflicts of interest.
  • Regulatory Changes: Proposed changes could benefit Ramaswamy’s company, which is developing drugs that may soon seek FDA approval.

Roivant Sciences, a biotech company founded by Ramaswamy, stands to benefit from three drugs that could be evaluated during Trump’s second term. His stake in the company is $670 million.

Ramaswamy argues that the FDA should err on the side of approving promising therapies faster and then monitoring their effects after doctors start prescribing them. The agency should place “greater emphasis on post-approval surveillance for safety issues to protect patients, rather than adding time and cost to innovative development,” he said in a statement. He highlighted the FDA’s standard requirement of two trials for approval and suggested a single trial — which would generally save biotech firms time and money — would be adequate.

Ramaswamy has taken aim at the central tension in every FDA decision about a novel drug or device — weighing benefits against risks of serious side effects. The agency has procedures to accelerate approvals for truly novel drugs that address unmet health needs, but Ramaswamy argues faster action is needed.

“It’s an obvious conflict of interest. Some people might think, ‘He’s a knowledgeable person.’ He’s a knowledgeable person with a vested financial interest in what he’s saying.” said Diana Zuckerman, president of the nonpartisan think tank National Center for Health Research, who said that the FDA has already lowered its standards considerably to speed novel drugs to market.

In an interview, FDA Commissioner Robert M. Califf said he knows and respects Ramaswamy but pushed back on some of the entrepreneur’s harshest criticisms, such as once questioning the need for the agency. “We tried that,” he said, pointing as an example to the drug thalidomide that caused birth defects in babies in the 1960s, “which is why the FDA exists in its current form.”

“Almost every additional authority at FDA has been because of a catastrophic public health event that harms people,” he added.

Califf defended the two-trial standard, particularly for new drugs when there are already effective therapies available, while emphasizing that the FDA frequently accepts less evidence for potentially life-changing therapies. As for Ramaswamy’s financial stake in biotech, Califf said, “at FDA, you’re not allowed to make decisions about industries in which you have a vested interest.” He added, “I would just say, the amount of money he has invested and what’s at stake speaks for itself.”

For experimental drugs that aim to treat serious conditions and fill an unmet need, the agency can grant accelerated approval with lesser evidence that allows a company to market the drug while it must continue to study the effectiveness.

Ethics

Trump and his transition team have yet to detail how the Department of Government Efficiency, or DOGE, will operate. Ethics experts said Ramaswamy and Musk might not have to comply with conflict-of-interest laws that apply to government employees — which can include divestment of personal financial interests that come into conflict with official duties — if DOGE is regulated as an advisory commission. But its structure remains unclear.

“They’re blurring the lines at this point,” said Richard Painter, a professor at the University of Minnesota who served as chief ethics lawyer to President George W. Bush. “We need to see how this plays out.”

@RalphHightower: Donald Trump has never been ethical and Team Trump is following their leader by enriching themselves.

Ramaswamy pulled off what was in 2015 the largest public offering in biotech, raising $360 million with the listing of Axovant, a Roivant subsidiary developing an Alzheimer’s drug. Controversy followed as a clinical trial failed to show a benefit and the stock value collapsed.

Investors alleged in 2021 that Roivant and a publicly traded subsidiary misled them about a drug to treat autoimmune disorders, claiming the companies knew there was a risk of raising cholesterol but declined to monitor it in early trials. The subsidiary, Immunovant, identified higher cholesterol levels in participants who received the drug in a later trial and halted it, sending its stock into free-fall.

“If the issues with cholesterol levels tied to the drug were as obvious and critical as plaintiff claims, the FDA would not have permitted the clinical trials to proceed” without monitoring, a judge wrote. Because the FDA accepted Roivant’s trial design, the judge reasoned, the company’s statements “were thus reasonable.” The case was dismissed.

Thalidomide Scandal – Birth Defects1,2

In the U.S., the FDA refused approval to market thalidomide, saying further studies were needed. This reduced the impact of thalidomide in U.S. patients. The refusal was largely due to pharmacologist Frances Oldham Kelsey who withstood pressure from the Richardson-Merrell Pharmaceuticals Co.

For denying the application despite the pressure from Richardson-Merrell Pharmaceuticals Co., Kelsey eventually received the President’s Award for Distinguished Federal Civilian Service at a 1962 ceremony with President John F. Kennedy. In September 2010, the FDA honored Kelsey with the first Kelsey award, given annually to an FDA staff member. This came 50 years after Kelsey, then a new medical officer at the agency, first reviewed the application from the William S. Merrell Pharmaceuticals Company of Cincinnati.

  1. Thalidomide scandal ↩

  2. Thalidomide ↩