At the end of last week, director of the FDA’s Division of Pulmonary, Allergy, and Rheumatology Products Dr. Badrul Chowdhury announced his move to British big pharma firm AstraZeneca PLC (AZN, Financial) as the new vice president of research and development at its biologics unit.
While there’s nothing inherently wrong with this, it does raise some concerns. As director of the pulmonary division, Chowdhury has (or had) heavy influence in the approval of some of the world’s most lucrative drugs. Cystic fibrosis drugs for example are some of the most expensive in the world. Rheumatoid arthritis drugs, which were also under his purview, are the biggest overall revenue generators ever across the pharmaceutical industry. AstraZeneca has 4 Phase III drugs in its respiratory pipeline for asthma and chronic obstructive pulmonary disease (COPD), two diseases for which Chowdhury had much input through his tenure with the FDA.
Again, while there is no inherent problem with this on paper, doubtless his value to AstraZeneca will be in helping get these drugs through regulatory approval. The question is, how will this be done? Official answers can only scratch the surface. What is raising eyebrows in particular is that Chowdhury had in March taken back previously supportive comments for Eli Lilly (LLY, Financial) drug Olumiant (baracitinib), just one month before taking a position at one of its biggest rivals.
If this were the first time AstraZeneca poached an FDA director of a division that it has an acute interest in, that would be one thing. But AstraZeneca also poached Dr. Sarah Pope Miksinski, former director of new drug products at the FDA, and more to the point Geoffrey Kim, former director of oncology products.
The appointment of Kim back in July 2017 is particularly telling, because oncology is AstraZeneca’s main R&D focus at present. Thirteen Phase III trials are ongoing in oncology, and an additional 15 are in Phase II. Revenues from AstraZeneca’s respiratory segment are actually higher at $4.7 billion than oncology at $4 billion, so the dual appointments of Kim and Chowdhury mean that both the revenue driver and the R&D investment are covered by people who know the regulatory ropes better than anyone else.
You can’t blame AstraZeneca for acting strategically in this way, and it will probably help the company in its quest for growth after several years of stagnation due to generic competition against its legacy products. Despite the troubling nature of the Revolving Door, long frowned upon in the defense and banking sectors where it is the most rampant, it is still an effective way of staying ahead of competition and earning money for shareholders.
It is no coincidence that the Revolving Door shows up in the most regulated and centralized of industries – defense, banking and pharma – three industries that are arguably the most heavily dependent on regulation and by extension personal and political connections than any other.
AstraZeneca has been in the doldrums for years, and its dividend is among the highest in pharma. The Revolving Door will keep turning on its hinges, and AstraZeneca’s latest personnel moves can only help in the long run.
Disclosure: No positions.
