FDA Commissioner Update

It looks as if the Race to White Oak is almost over. We know at least one commissioner candidate was informed of the decision yesterday.

As we said previously, a decision was likely to be made yesterday with an announcement coming later this week or soon thereafter. To read our previous post, click here.

We also understand that David Dorsey could be named FDA Chief Counsel and Bill Schultz could be named HHS General Counsel. Both picks would make a lot of sense.

Dorsey previously worked in the FDA Office of the Chief Counsel before leaving temporarily to join the staff of Senate Health, Education, Labor and Pensions Committee Chairman Ted Kennedy. Dorsey returned to the agency last week.

Schultz, if named HHS General Counsel, would be the second former staffer of House Energy & Commerce Chairman Henry Waxman to ascend to a top position in the health department. Schultz previously served as counsel to Waxman on food and health care issues.

He was also deputy commissioner for policy at FDA and a former assistant deputy attorney general. Schultz most recently involved in negotiations over an abbreviated approval pathway for follow-on biologics. As a partner with Zuckerman Spaeder, he was one of four principal negotiators of compromise legislation and represented the generic drug industry in those talks. To read our coverage of FOBs, click here.

Dorsey was also heavily involved in the FOBs negotiations on the Senate side as a staffer to Kennedy.

We'll let you know when we find out more.

BioShield Giveth, BioShield Taketh Away

Yesterday the Dept. of Health and Human Services notified Vaxgen that since the biotech was in default of its $877 million contract to provide the government with 75 million doses of anthrax vaccine for missing a milestone, HHS was canceling the order. The New York Times has the story here.

The grant--the largest chunk of the government's $5.6 billion Project Bioshield program--wasn't payable until Vaxgen started delivering vaccine. As such, the company is pretty much out of luck, although it can appeal HHS' decision. Making matters worse for the California biotech, HHS reserves the right to hold the company financially liable for costs associated with finding a replacement, noting that "Vaxgen's failure to perform is not excusable," according to a HHS letter sent to the company. Happy Holidays!

BioShield hasn't turned out as hoped. Most of the cash is earmarked for products only once they've neared or received approval, but deep-pocketed firms have been reluctant to assume the R&D risk for at-best uncertain financial gain. And the Vaxgen debacle illustrates some of the problems that those willing but much smaller firms with few resources can run into.

Congress may attempt to remedy the situation by throwing more money at it--as announced in mid-November. The proposed additional $1 billion could support research and early development at biotech companies. Critics suggest the boost is unlikely to fix BioShield, and regardless, whether HHS has any luck playing VC remains to be seen.