Biotech Shares Tumble As FDA Commissioner Abruptly Resigns

FDA Commission and anti-vaping crusader Scott Gottlieb has resigned from the government agency as his ties to the pharmaceutical industry have faced intensifying scrutiny, the Washington Post reported.

Gottlieb

Gottlieb, who was a regular on cable news (CNBC in particular), has reportedly spoken President Trump, who liked Gottlieb and didn't want him to leave.

Biotech shares are tumbling on the news:

Bio

And tobacco stocks spiked, as the resignation threatened some of Gottlieb's plans for cracking down on the industry, as WaPo explained.

Tobacco

Late last year, it was reported that Gottlieb had been pushing the FDA to act on a planned ban of menthol cigarettes while his proposals for limiting e-cigarette and vape sales to children are being reviewed by the White House. While anti-tobacco advocates embraced his proposals, some conservatives criticized him for going too far.

The resignation comes as Gottlieb’s signature issue – youth vaping – is being reviewed by the White House Office of Management and Budget. The plan, detailed by Gottlieb last fall, would sharply restrict the sale of flavored e-cigarettes to curb a surge in underage vaping, which he argues could lead to a whole new generation addicted to nicotine.

His initiative has won praise for shining a spotlight on a national problem. But it has also been criticized by some anti-tobacco activists as being too weak and by e-cigarette supporters as being too aggressive. Some libertarians and conservatives recently complained his approach represented “regulatory panic” and went against Trump’s anti-regulatory agenda.

The blueprint is expected to move forward, but Gottlieb’s departure could throw into question other controversial tobacco initiatives he championed which have not yet emerged from the FDA, including proposals to ban menthol cigarettes and to reduce nicotine levels in cigarettes to “minimally addictive” levels.

In an unprecedented move, Gottlieb removed a powerful opioid called Opana from the market on public health grounds, an unprecedented move for the FDA.

Gottlieb spent much of his confirmation hearing talking about the opioid epidemic – comparing it to public health emergencies caused by the Ebola and Zika viruses – while acknowledging the FDA’s own unwitting contribution by granting approvals for the painkillers. During his tenure, the FDA engineered the removal of the opioid medication Opana ER from the market, the first time the agency requested that action on public health grounds. But it also approved Dsuvia, a powerful new opioid over objections that it would cause more overdose deaths.

During the nomination and confirmation process, some worried that his ties to the pharmaceutical industry would impede his ability to do his job.

When Gottlieb’s name first came up as a candidate for FDA commissioner, some Democratic lawmakers worried he would be too close to the pharmaceutical industry. But as other names surfaced - including candidates pushed by Silicon Valley billionaire Peter Thiel who questioned whether the FDA should make companies prove their drugs are effective – Gottlieb appeared more moderate.

When explaining the reasons for his resignation to the president, Gottlieb said he planned to spend more time with his family in Connecticut. He lives in Westport, and had been commuting every week to Washington DC.