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WHEN: Today, Wednesday, March 28th

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Scott Gottlieb, M.D., Commissioner of Food and Drugs, U.S. FDA, live from CNBC's Healthy Returns conference in New York City on Wednesday, March 28th.

Mandatory credit: CNBC's Healthy Returns conference.

Realtime Transcription by

MEG TIRRELL: Thank you. Thank you all so much for being here today. We're so excited to kick off our first ever Healthy Returns with Scott Gottlieb, somebody who's been a CNBC familiar face for a while, and of course now a familiar face to everybody in healthcare as Commissioner of the FDA. Scott, thanks for being here.

SCOTT GOTTLIEB: Thanks for having me.

MEG TIRRELL: So you were confirmed in May of 2017. In your first year as FDA commissioner the agency approved a record number of new drugs, 46; record number of generic drugs, more than a thousand. First gene therapies ever approved in the United States. I've got to look at my list here. You're announcing plans to try to limit nicotine levels in cigarettes. You've pulled the dangerous opioids from the market. You have established a new regulatory pathway for digital health. You've taken aim at homeopathic products and what you call a rigged scheme of paying for certain drugs that leads to market inefficiencies, and you find time to tweet. So my first question for you is, are you a robot?

SCOTT GOTTLIEB: Well, the tweeting isn't the robot. That's really me.

MEG TIRRELL: That's really you.

SCOTT GOTTLIEB: But I think we've had a good year. We've been able to advance a lot of initiatives on the key priorities that we set out to do. And a lot of that is, you know, working with a really good agency. And one of the things, I worked at Medicare/Medicaid. And not to make sort of a pejorative comparison to Medicare or Medicaid, but I will say from my standpoint of working at FDA I think it's one of the highest performing agencies in Washington. And so my ability to come in there, try to set out some priorities early on and work with the career staff to try to stimulate the development of policy ideas that could help achieve those outcomes, there's a lot of opportunity to do that at FDA.

MEG TIRRELL: Well, one of the things that you came in with was sort of a mandate from the President to focus on drug prices. And it's interesting because FDA, of course, can't regulate drug prices. You don't necessarily have a direct role there. But what was your directive from President Trump taking over the FDA as it focused on drug prices?

SCOTT GOTTLIEB: Well, try to bring more competition to the market. And that's something the FDA does have a direct impact on. We see a lot of places where there are things that the branded companies are doing and the supply chain to try to frustrate the ability of generic companies to get their drugs onto the market. In order for a generic company to win FDA approval, they have to do a study. It's a fairly, you know, straightforward study, but they need to get access to the branded companies' drug in order to run that study to compare their generic copy against the branded copy, the branded original. And we see the branded companies doing a lot of things, sometimes in cahoots with the supply chain, with the PBMs and the distributors to block the ability of the generic companies to get access to the physical doses they need, usually between 2,000 and 5,000 actual doses, to run those studies. We could affect that. There are things that we can do to try to make it easier for the generic companies to end that kind of gaming, and we've taken steps to do that.

MEG TIRRELL: Do you think your role -- people saw you as kind of an industry insider. You worked with the drug industry for a long time. Does that give you a unique lens into understanding the kind of trickery and shenanigans, as you've called them, that go on?

SCOTT GOTTLIEB: Well, I've worked with a lot of different elements of the healthcare industry for a while. I worked with investors. I worked on the provider side as well, and I did work on the innovation side with drug makers. And I think I did see a lot of these practices from my time in the industry. So I kind of knew where some of the activities were taking place, and so it was easier to target it coming in. I don't think anyone -- you know, every company is going to try to do what they can do to try to maximize their profits. They're going to be accountable to their shareholders. But that doesn't mean that we have to tolerate this kind of behavior, especially when it's antithetical to the rules that we set out. I mean, the innovation ecosystem and the market-based pricing of innovation, which I think is the best way to price new innovation because it provides rewards and incentives to investors and to the formation of capital -- that system is dependent upon the notion that there will be vigorous competition once intellectual property has lapsed on those products. And so if we want to make that system work, we have to make both sides of that equation work.

MEG TIRRELL: One of the things you've been focusing on more recently and when you used some of that language about schemes and sort of a rigged market system has been around biosimilars, these sort of generic versions of biologic often very pricy biotech drugs. What more is the FDA doing in that space? Because biosimilars were sort of this expectation that they would save the market a lot of money on drugs. And we really haven't seen that.

SCOTT GOTTLIEB: Well, I think we will see it. I think it's still early days. I think a lot of the initial estimates on how much we would save from biosimilars in advance of developing that legislation probably weren't realistic. And I felt that and said that at the time. I think we will see a lot of biosimilar competition come on to the market. And I also think we're going to see more consumer and provider acceptance of using biosimilars. If you remember back to the early days of Hatch Waxman 30 years ago, neither of us were doing this 30 years ago. But if you look back at the history, there were -- generic drugs when they first came onto the market. We're going to be advancing new policies to try to stimulate more biosimilar development. We're taking a hard look at how we determine interchangeability so that we can make determinations that biosimilars can be used interchangeably with the brand of drugs. We see a lot of variants when we take a look -- when we use our new analytical tools to look at currently marketed biologics, we see a lot of variants in lot-to-lot manufacturing of existing biologics and also a lot of variance in the products over time where there's drift in the sort of formulation of the biologics that are currently on the market. And those don't seem to have clinical consequence. But they could have clinical consequence. That drift also makes it hard to copy those drugs. Because if you have sort of a moving target on the market and you want to come in and create a biosimilar to copy it, you have to study your biosimilar against more drugs, more patients, because there's more variability in the currently marketed brand of drugs. We're going to be putting out a set of policies to compel the branded drug makers who have biologics on the market to tighten up their manufacturing, to have less variance of their biologics that are currently on the market. We think once we do that, it's going to make it easier to copy those drugs in smaller studies. Because if there's less variability, you can prove sameness or similarity by doing a small study. If there's a lot of variability, you need a lot of patients in order to prove similarity because there's so much drift. So that's one thing that we're going to be doing soon to try to address some of the challenges that the biosimilar manufacturers have had.

MEG TIRRELL: What about the end of market exclusivity to those products? We often see these kind of evergreen tactics happening where you're just stretching the market exclusivity and the patent life of these very pricey drugs for a long time. Does the FDA have any role to play in sort of illuminating when that exclusivity ends?

SCOTT GOTTLIEB: Well, the biosimilars pathway explicitly addresses -- so when they confer the ability for companies who have innovative drugs to get 12 years of exclusivity, of data exclusivity, they also address the ability or impeded the ability to try to preserve the monopoly by making small changes in how you manufacture the drugs and then getting an additional 12 years on that. So I think you're going to see less of that in the biologic space than we had seen previously in the small molecule space. And even in the small molecule space, a lot of that activity, we don't see it anymore in part because policy steps that have been taken, but also in part because of public shaming. We just don't see companies making small tweaks to drugs that don't produce a lot of public health benefit but have the effect of extending the franchise, if you will.

MEG TIRRELL: So do you expect to see these moves that you're about to take really stimulate more development of biosimilars? I mean, should the companies that have big biotech drugs that are nearing the end of their patent life or at the end of their patent life, should they be concerned that they're going to have more competition?

SCOTT GOTTLIEB: Well, I don't know who should and shouldn't be concerned. I think that, you know, there's no syllable here in terms of trying to really make this market go gangbusters. I think this is going to be a slow build. But we're going to be coming out with a set of policies, you know, multiple policies -- about a dozen policies, that I think incrementally will each move the ball in the direction of trying to create more avenues for biosimilar competition. I still think the biggest impediment is market access and the ability for the biosimilars to actually get on the market. And I think they're impediments in the way that these are reimbursed in supply chain where you have these sort of stacked royalties sitting on top of the brand of drugs, and if a biosimilar wants to penetrate the market, even at a lower price, they can't move enough market share in order to offset the benefits that the branded company is paying to the supply chain, whether it's distributive PBM or the health plan with these kickbacks, these rebates. And so I think the provider community is going to need to make a decision whether or not they are willing to move away from some of those structures in order to create this market. Because if we don't see soon the ability of the biosimilars when they come to market to actually build market share, I'm worried that when manufacturers look at this market, they're going to say: Look, this is too hard. We can't get more than 10 percent market share, so we're not going to make the investment. Because it still costs up to $300 million to do a biosimilar development program. It's not trivial. We can get that cost down, but it's never going to be, you know, 5 to 10 million dollars at a cost to do a generic drug. It's always going to be, you know, on order of $100 million or something to do a biosimilar.

MEG TIRRELL: And when you see all this consolidation happening in the drug supply chain with two of the biggest PBMs potentially joining larger insurers or with CVS pharmacy chain, what do you think that does to these market schemes you're pointing out?

SCOTT GOTTLIEB: Remains to be seen what it's going to do to the market schemes. I think -- you know, one of the things we've seen in recent weeks is the health plans making announcements that they're going to pay back the rebates directly to the consumer, and I think that that's sort of a healthy development from the standpoint of public policy. Because what we have right now is the rebates are paid to the health plans, and then those rebates are really money that is coming from the patient who is paying full freight at the pharmacy counter. So the patient who needs the costly drug is paying money. Some of that money gets rebated to the health plan; but instead of being paid back to the patient, it's paid back to help offset the cost of premiums for everyone. So you have this sort of perverse system where people who are sick and paying a lot of money for drugs are cross-subsidizing the premiums for people who are healthy, which is exactly the opposite of what insurance was intended to do. So I think the fact that they're making moves to pay the rebates back to the consumers who are actually paying for the drugs is a healthy development. So hopefully they're going to make policy decisions to try to address some of these incentives that have grown up, that are sort of perverse incentives, that are working against the interest, in my view, at times, of patients.

MEG TIRRELL: A lot of people say that paying the rebates directly back to the consumers will just result in premiums going up for everybody in the plan. Do you think that's right? And should that be the case?

SCOTT GOTTLIEB: And you can argue that premiums were artificially low because they were cross-subsidized by the costs being borne by someone who had a catastrophic illness. I mean, the whole notion of insurance is that you're insured if you get something like with cancer or a bad diagnosis. And so to use the money that the patient who is very sick is out of pocket to offset premiums could also be an argument to say that the premiums maybe were too cheap in the first place. The problem is or the challenge is that the plans compete based on their premiums. That's what they advertise, and that's how they attract consumers. And so their incentive is to get the premiums as low as possible. You don't see health plans competing on how much it's going to cost if you get diagnosed with lymphoma. You know, most people don't choose health plans that way because most people don't expect to have that happen to them. And so they're competing on the cost of their annual premiums, and they're using the money to subsidize that. So I think you can flip that argument around.

MEG TIRRELL: How much feedback do you get from the President on what you're doing?

SCOTT GOTTLIEB: I have conversations from time to time. I'm not going to detail them here. But, you know, I will say, you know, they've been very productive, and he's very well-informed about what we're doing and takes an interest in it. Just on the whole, I've had a lot of support from the White House, which has really helped us advance some of our bigger initiatives, things around what we're doing on opioids and drug pricing and particularly tobacco, where we've gotten a lot of support.

MEG TIRRELL: I want to get to all of those topics, but let's stay on drug approvals for right now and talk about branded drug approvals. You know, a lot of people point out the cancer drug division at FDA has been very productive, very fast drug approvals. And recently you've talked about taking some of the mechanisms that we've seen in cancer drug reviewing and applying those to other areas, like Alzheimer's diseases. Can you tell us about some of these mechanisms you're looking at?

SCOTT GOTTLIEB: Well, we're looking at things, different kind of clinical trial designs, things like master protocols. We can study different drugs within the context of the same clinical trial using tools like days in analysis to use real world data to help inform the drug review process. In Alzheimer's in particular we put out guidance recently talking about the ability to study early Alzheimer's or Alzheimer's before symptoms are manifest by relying on certain biomarkers. We now have the ability to study that disease in patients where we know there's 100 percent certainty that they're going to get Alzheimer's. There's some familial inheritance of genes that have 100 percent penetrance. So at some point they're going to develop Alzheimer's, and that provides a rich opportunity to study drugs early in the course to see if you can help delay the onset. And so we're seeing a lot of that activity targeting things like tau, and so we want to open up pathways to try to get approvals earlier before full-blown dementia's onset to really try to effect the course of that disease. The other thing we recently articulated is that instead of having to hit on dual endpoints with Alzheimer's, cognition and function, you can show an effect on cognition. Because cognition really is the key characteristic of Alzheimer's, and it directly relates to function. But by the time you actually have -- you know, you affect someone's ability to, like, attend to their daily living with Alzheimer's disease, dementia has progressed pretty far. And so if you want the ability to affect the early course of that disease, you need to look at measures that are more sensitive. And so that's what we're trying to enable the opportunity to do. And we do see drug developers looking earlier in the course of the disease before all the morbidity has accumulated.

MEG TIRRELL: With Alzheimer's in particular it's such a tricky one because, of course, the underlying real cause and drivers of the disease aren't extremely well-known. And you're talking about a genetically defined population. But do we run the risk in a disease like Alzheimer's where, if you're approving drugs on an accelerated basis based on some kind of biomarker, clearing of a plaque or protein, that that's not really what's driving the disease, and you're going to get drugs on the market that don't actually work?

SCOTT GOTTLIEB: Well, look, I think that there's been a lot of failed theories so far in Alzheimer's. And I think that's where some of the skepticism is coming from. We are going to crack the ability to do this at some point. The last real big area of the human body that hasn't been fully drugged and hasn't been fully understood is the brain. We're going to figure this out, and there's a lot of investment activity in it. I think we now have models of Alzheimer's that allow us to do those studies earlier. We've identified patient models. Also patients with Down syndrome develop a kind of dementia that looks very much like Alzheimer's. So you can study drugs in that patient population as well and try to see an earlier effect. We're still going to be rigorous and make sure that we're actually seeing a clinical improvement before we're going to approve a product. You know, it might be the case that you see the clinical improvement and you don't fully understand the biological mechanism that you're intervening upon or you haven't fully validated it, but if you can demonstrate a clinical improvement and the benefit-risk makes sense, we do want to try to open up opportunities for those kinds of products.

MEG TIRRELL: What about with the accelerated approval pathway, there's the understanding that in the confirmatory studies, if those don't bear out, the drug should be pulled from the market. Are you committed to doing that for drugs on that pathway?

SCOTT GOTTLIEB: And we have pulled drugs from the market that have been improved on an accelerated approval basis, and we've also sanctioned companies that weren't moving quickly enough to try to get those confirmatory studies done. The track record is actually pretty good. If you look, there was some recent analysis put out on oncology drugs that were approved through accelerated approval, and the track record on drugs showing confirmatory benefits, they're showing the survival advantage that might have been approved on the basis of a surrogate market that was reasonably likely to predict clinical success as well as the products that haven't demonstrated that yet but are doing studies where they're on track to read out an answer is actually pretty good. I know there's been criticism in some corners about the FDA's use of that pathway, but I think we've used that pathway in a thoughtful way, and the results have mostly borne out that the drugs do go on to demonstrate a confirmatory benefit.

MEG TIRRELL: People often describe sort of the FDA's willingness to approve drugs, the lenience maybe, as sort of a pendulum; it swings in both directions. And for a long time, it's been swinging toward approving drugs faster, approving more drugs. How do you respond to criticism that you've lowered the standards for FDA approval?

SCOTT GOTTLIEB: Well, I don't see the -- I've been there now three times. I can't find this pendulum. I keep looking in closets. It's not in my office, I know that. But I haven't found a pendulum yet. I think that there's sort of a public dialogue that does track that way, depending on what's going on in the broader environment. You have -- a drug safety issue will come up, and then there will be a lot of intense focus around drug safety. I think we're at a point in time right now where there's so much opportunity from science, and it's so seductive. And we're seeing so many treatments in the pipeline that have curative potential. When you look at things like cell-based regenerative medicine and gene therapy, CRISPR/Cas9, that I think patients do want access to it. They still want FDA to do its job. They still want insurers to safety and benefit, but they do want a process that accommodates the ability for patients to get access to that, even as we're continuing to learn about those products in the marketplace. That's why you see Congress creating pathways like breakthrough therapy, to try to enable FDA to have a regulatory touch that follows the drug post market to apply, you know, continued surveillance so that we do have the ability to take more risk premarket in terms of -- and make the drug available to a defined patient population that, in many cases in the context of a breakthrough therapy product, doesn't have any other therapeutic options. And I think that this is being driven by the science. These are sort of broadly bipartisan constructs right now. I think it's being driven by patients who are looking at the pipeline and saying, you know, if there's something that can potentially cure an inherited disease that can otherwise be fatal in pediatric patients, if you can give me a reasonable assurance to safety and efficacy, we're willing to take some uncertainty using that product.

MEG TIRRELL: Well, along those lines, I want to ask you about the "Right-to-Try" legislation that is working its way through --


MEG TIRRELL: Thank you. It's like I do this for a living. -- that's working its way through Congress right now. So Right-to-Try, if folks aren't familiar with it, is a law that would essentially aim to give access with less FDA involvement to experimental drugs outside of clinical trials for patients with no other options. But what a lot of people have sort of criticized it as is really just taking the FDA out of it. And so these drugs would get through Phase 1 safety testing, and then the FDA wouldn't have a role anymore. How do you look at Right-to-Try?

SCOTT GOTTLIEB: Well, these are products that are in Phase 2, and they are products that have addressed significant unmet medical needs. By the time you're in a Phase 2 study with a product with those contours -- you know, that's a pivotal study. Chances are if a product like that does demonstrate benefit in Phase 2, it's probably going to get out to the market with accelerated approval or some kind of earlier access program. The current legislation, the legislation that came out of the House, you know, we provided technical assistance back to Congress, so we were in conversations with the Energy and Commerce Committee, which crafted that bill in the House. And we felt it did build in some important patient protections that we had asked for. So I testified before Congress about earlier iterations of that bill and raised concerns around certain patient protections that I didn't think were built into legislation, that weren't clarified in important ways, and we think the House corrected that and did build in important patient protections, including the requirement for an IND. So it is going to be under active IND. The FDA, if they had a real safety concern, could pull the IND. There's also some strong incentives to put in place review by an institutional review board, an IRB, which is going to provide some protections to patients to have sort of an independent third-party do an assessment of the appropriateness of the product in that context. And so, you know, we think that it does build in some important safeguards. On the whole, we are in favor of constructs that allow patients who have a terminal disease, who don't have access to any available therapy, to have access to experimental drugs under proper supervision. And that's why we've pushed hard on our expanded access program. To the extent that this legislation can provide some incremental opportunity to patients, we're supportive of the general concept and will continue to work with Congress as they sort of work through this process to try to make some kind of legislation work in this way.

MEG TIRRELL: The data show that the FDA approved something like 99 percent of requests for compassionate use. Is this legislation necessary? And does it solve the main problem, which is that often drug companies don't want to provide access to these drugs for a number of reasons?

SCOTT GOTTLIEB: Well, I think -- no. It's hard for me to predict who's going to take advantage of the Right-to-Try pathway versus who is going to come through traditional expanded access. I think there's still more we can do with our expanded access program to make it easier for sponsors to do things like simple large safety trials. So they just do large, open access trials, and maybe even collect data from it, maybe even use that data to help support registration. So we're going to continue to look at what more we can do. You're right that one of the issues is actual supply of drugs. You're dealing with companies that are often venture financed. They don't have the money to do extra GMP runs of their drug. Many times, it's biologics where you're supply constrained. You can't just, you know, produce more drug -- you are producing lots of drugs that you're using for clinical trial purposes, and you don't have any extra drug. And that's the thing that we run into the most, which is that they have to lottery it off, or they just don't have a lot of excess drug available to provide it to patients. So there are still going to be, I think, significant supply constraints to getting access. From my standpoint, you know, what I think we ought to be doing also -- and this is what we're trying to do, getting back to your original question -- is look for ways to make the development process more efficient. Because when we do see a real breakthrough drug that shows a real clear clinical benefit where we can discern the safety profile in a reasonable way in a reasonably sized clinical trial, we should try to move that out as fast as possible. And we've been able to do that. There's been times where we've been able to approve drugs within a two- or three-month review period, when we really see a substantial clinical benefit.

MEG TIRRELL: My last question on Right-to-Try, because we only have seven and a half minutes left. Some of the biggest critics have said it'll open the door snake oil salesmen. The drug industry, the traditional drug industry, doesn't seem like there's a lot of support for Right-to-Try. It's not solving a problem for them. Are you concerned that this is cutting the FDA out of the process and we'll have drugs that don't work on the market and people will be able to pedal things that just don't do anything?

SCOTT GOTTLIEB: I feel confident that we're going to have the regulatory tools we need that if we see people taking advantage of patients through these constructs, we're going to be able to step in and intervene. Now, is it going to be something that's resource-incentive on the part of the agency, are we going to have to take certain proactive steps to actually effectuate that? Yes, we will. We'll have to be aware of what's going on, and we'll have to actually take proactive steps. But we do that across a lot of our portfolio, where we -- you know, we have to go and collect information, issuing a warning letter and seek an injunction. In this case we can pull the IND. There is mandatory notification to the agency when drugs are supplied under this construct, under the current construct. So we will be aware of what's going on the marketplace. And we'll be able to take action. My experience has been that when you see things going on in the marketplace that create a lot of concerns around patient risk and people taking advantage of patients, it's a small subset of bad actors who are recidivists and repeat offenders. So we don't have to boil the ocean here. I think we know who we're going to be targeting.

MEG TIRRELL: Let's talk about tobacco. So you have announced plans to try to limit the nicotine levels in combustible cigarettes to minimally addictive or nonaddictive levels. You've also said you're going to look at flavors like menthol. You got sued yesterday, though, by several public health groups saying you didn't move fast enough, the FDA didn't move fast enough and has delayed rules on e-cigarettes and cigars and that kids will be exposed to them for longer and potentially get addicted. How are you looking at that?

SCOTT GOTTLIEB: Well, I'm not going to address the specific litigation. But when we announced this plan earlier, late last year, the idea was to put nicotine at the center of our regulatory efforts and, to your point, go through a process to try to regulate nicotine levels in combustible cigarettes, combustible tobacco, to minimally and nonaddictive levels to try to transition smokers more quickly off of combustible tobacco onto reduced-risk products or to quit altogether. But, you know, we know that there are going to be adult smokers who still want to get access to satisfying levels of nicotine, and if we're going to render cigarettes minimally or nonaddictive, where are they going to get access to nicotine? Obviously the most advantageous route is to go to an OTC nicotine replacement product. But --

MEG TIRRELL: Over-the-counter?

SCOTT GOTTLIEB: Over-the-counter product like a patch or a gum. But we do see an opportunity from things like e-cigarettes and other electronic nicotine delivery systems potentially being a viable vehicle for adults who want to access nicotine. But those products need to be put through a series of appropriate regulatory gates. When I came into the agency, none of the foundational regulations that needed to be in place in order to properly regulate e-cigarettes were in place, and the only way for us to get those regulations in place was to implement the delay and the application deadlines, because all of these companies had applications due to the agency within a year. Well, we got those rules in place, and that's, in fact, what we're doing. At the very time that I am trying to take nicotine out of combustible tobacco, I don't want to be sweeping the market of products that could provide an alternative to smokers who want to get access to nicotine. One of the things we're doing right now is looking very actively at could we bring an e-cigarette through the over-the-counter pathway, which would give us many more tools to look at both safety and benefit, to study whether or not an e-cigarette actually does promote smoking cessation, and also gives us many more tools to study the toxicology associated with it and see what effects it might have on the lungs. We're going to be putting out two guidance documents sometime soon, probably this summer. One's going to address specifically how to study the toxicology associated with an e-cigarette, so the pulmonary tox associated with the use of an e-cigarette if you want to bring it through the new drug approval pathway and try to sell it as an over-the-counter product. We're also looking at what additional endpoints we might allow for products that want to get smoking cessation or maybe even smoking reduction claims as an over-the-counter nicotine replacement therapy. Because we do want to open up the marketplace towards more opportunities to get nicotine sold as a pharmaceutical product for smokers who want to either reduce their smoking or preferably quit altogether. I think all of these elements are important. People like certain parts of what we're doing, don't like certain parts of what we're doing. I think the people who sued us waited until we got out all the parts that they liked, and then one day later sued us on the parts they didn't like. But, you know, this is -- to me, this is a comprehensive package and I think if you're in favor of trying to get adult smokers to more rapidly quit smoking, you can't just turn a blind eye to the fact that there's still going to be adults who want to get access to nicotine, and there needs to be products available to safely do that. Now, all that said, I will just close by saying we are deeply concerned around the youth access. We see what's happening with Juul. We see what's happening with the other e-cigarette products where you see a lot of youth initiation on those products. That's why we're going to address things like favors. That's why you're going to see us take some enforcement actions very soon against some products that we think are being inappropriately marketed to kids. And we'll continue to push on that very hard because no child should be using any tobacco product.

MEG TIRRELL: Was the FDA dragging its feet before you got there on this issue?

SCOTT GOTTLIEB: I think you're dealing with -- with the Tobacco Center and Tobacco Control Act, you're dealing with a relatively new piece of legislation and a new center. And I think that they had to make decisions about which regulations they promulgated and couldn't do everything. And so it's true when I got to the agency, certain foundational regulations that I think we need to provide a firm regulatory context to evaluate these products weren't in place. It's not that they were dragging their feet. I think they had to make different decisions about what they did first. And there was some unfinished business. But that's not because anyone had dropped the ball. It's because it's a new center and it doesn't have, you know, 100 years of history like our drug center and all the regulations in place, you know, clearly codified.

MEG TIRRELL: Well, I can't let you go without talking about opioids, and I've timed this terribly because I've left us a minute and a half to tackle the opioid epidemic. But what role does the FDA have in trying to make a dent?

SCOTT GOTTLIEB: I think trying to address the prescribing and the rate of new addiction, trying to take steps to interdict stuff coming through the international mail facilities that we play a role, and Congress recently appropriated $94 million in our FYE --

MEG TIRRELL: You told me there were only seven people inspecting these packages when you started?

SCOTT GOTTLIEB: So there were seven people, when I started, inspecting packages in nine international mail facilities. I took it up to 22. So I took the number of packages that we inspected annually from 10,000 to 40,000. New resources we got last week from Congress will allow us to take it up to 100,000. It's presumed that 9 percent of all packages coming in through the international mail facilities contain some kind of drug products. Some of those contain illicit drugs. Right now we're inspecting probably .04 percent of the packages that are presumed to contain drugs. Now, we target our inspections effectively based on where they're coming from, who they're going to, what country they're coming from. So we think we're getting a good number of the packages that do have drugs. But we know stuff's getting through. Customs and Border Protection has primary responsibility for inspecting packages that are presumed to have controlled substances, but even -- so they take those away and then they give us what's left, the other stuff. But that other stuff, we're still finding about 10 percent still contain controlled substances. So that's an indication that there's probably stuff getting through. And so by stepping up our resources in those facilities, the 0, minus 1, minus 2, stepping up our resources in those facilities we'll get more.

MEG TIRRELL: We are out of time, but just to follow up quickly on that point, you said you just got some more funding to work on this.


MEG TIRRELL: Do you have enough money to really try to do something about opioids?

SCOTT GOTTLIEB: You can always do more with more. I think on the review side -- you know, I think we have a robust program in place. The place where we had been providing some technical assistance to Congress and we got additional resources was in the international mail facilities. I think the ability to inspect 100,000 packages -- even though it's probably only going to be now, you know, .2 percent of all the packages are presumed to have drugs, and that sounds like a very little number. We're getting closer to a representative sample where if we're targeting -- we're getting good information, we're targeting what we're opening, we're going to catch a lot more bad stuff.

MEG TIRRELL: All right. Last question for you. Almost a year into the job, not quite a year into the job, what are you hoping your legacy is when you leave this position? Is there a previous FDA commissioner you would say, you know, I would love to have that kind of legacy?

SCOTT GOTTLIEB: Well, I'll let you write my legacy. But, you know, I think the stuff that we're doing around tobacco is going to be very important. I'm going to make some announcements tomorrow about nutrition. We talk a lot about new technology, and we're going to be rolling out some initiatives on how to advance gene therapy as an area. Like we did with cell-based regenerative medicine, we're going to have a suite of guidances that's going to try to define accelerated approval endpoints for gene therapy. I think continuing to open up opportunities for this new technology to mature is going to be very important, and I think we're at a defining moment right now. We're setting the rules for that. But I think the most important thing that we can do is get back to public health basics: Reduce smoking rates, promote healthy diets, promote vaccination rates. If we can actually make significant progress in those three things, the public health gains would dwarf any single invention that we could come up with. So we've said what we're going to do on tobacco. I think we're going to start talking a lot more about nutrition starting tomorrow.

MEG TIRRELL: All right. We'll stay tuned for that. Thank you so much, Dr. Gottlieb.

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