FDA chief resignation shocks drug industry as federal scrutiny grows

Food and Drug Administration Commissioner Scott Gottlieb’s resignation sent shockwaves through the drug industry, catching many by surprise despite months of rumors that his departure was imminent and dealing yet another blow to a sector under intense federal pressure to lower rising treatment costs.

Speculation was rampant in the aftermath Tuesday’s announcement that Gottlieb – a favorite of President Trump – left because the administration plans to move forward with a controversial proposal to allow the U.S. to import drugs from foreign countries. An agency spokeswoman said the importation issue has “no connection to Dr. Gottlieb’s resignation" and the White House declined to comment on the rumors.

The main reason for his departure, Gottlieb said on Wednesday, is to spend more time with his family.

"This was a job that I did 100 percent. I was commuting from West Port, Conneticut with three young kids," he told attendees at an event hosted by The Hill. "Two years of that got hard, it got hard on the family. If I had to do it over again I think I would have moved them down here from the onset."

Republican Florida Gov. Ron DeSantis previously said Trump was "enthusastic" about a proposal to allow the state to import cheaper drugs from Canada, telling an audience in February that the president is committed to taking the "necessary executive actions to make sure that we can act."

The White House referred questions on the future of the importation policy to the Department of Health and Human Services, which did not respond to request for comment.

Meanwhile, the administration is slated to soon release a draft of its controversial plan to tie the cost of some drugs in Medicare to international pricing, FOX Business has learned, teeing up a potentially bitter battle with the industry – which vehemently opposes the proposal.

To try to prevent the White House from advancing the plan, drugmakers are coalescing around a proposal to cap any price increases in Medicare Part B to inflation and potentially shift how much physicians are reimbursed for the lucrative injectable treatments.

The administration however, wants companies to take more concrete steps to lower the list costs of drugs and deep divisions remain in the industry over how to address that demand, sources say.

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As drugmakers fret over how the White House will move forward on its drug pricing plan, Congress is also pushing ahead on its own efforts.

In the House, Speaker Nancy Pelosi is looking to the industry to pony up as much as $40 billion to help fund an upcoming budget deal, sources say. An expected hearing in the House Energy and Commerce Committee next week on a series of drug pricing-related measures could be the precursor for that, given the package is expected to save the federal government billions of dollars.

A Pelosi spokesperson did not respond to request for comment. A panel spokesman had no scheduling announcements to provide.

Among the bills expected to be considered by the panel is the so-called CREATES Act, which addresses the use of a federal safety program by pharmaceutical companies to prevent generic competition. While drugmakers previously opposed the legislation, the industry is now vocally supporting a revised version that has yet to obtain broad support – including from the generic sector.

Two key Senate committees are also planning on introducing sweeping legislative packages in the coming months that will address treatment prices, the clearest sign yet that members of both parties are willing to take more significant steps to curb the industry’s largely unfettered ability to raise costs.

Led by Senate Finance Chairman Chuck Grassley of Iowa and Health, Education, Labor and Pensions Chairman Lamar Alexander of Tennessee, the two are hoping to combine their respective legislation into a package that could be ready for a floor vote by August, sources say. They cautioned, however, that the timeline and the plan could slip.


Alexander has said he hopes to mark up legislation by June, indicating draft language would be released prior to that.

A spokesperson for the Senate Finance Committee said a markup on their package has not been announced yet and “anything beyond that is speculative.”