Vivek Ramaswamy’s crusade to change FDA could boost biotech, and himself

Vivek Ramaswamy, an outspoken ex-biotech executive turned fierce critic of the industry’s main regulator, is now in a position to reshape the agency he derides as the “Failed Drug Administration” in ways that could benefit him personally.

Newly tapped by President-elect Donald Trump to co-lead an initiative to slash the federal bureaucracy, Ramaswamy has heaped criticism on the Food and Drug Administration for “unnecessary barriers to innovation.” At the same time, the company he founded, Roivant Sciences, is pursuing studies for three drugs that, if positive, could land before the FDA during Trump’s second term. His stock in Roivant is worth about $670 million.

Ramaswamy argues that the FDA should err on the side of approving promising therapies faster and then monitoring their effects after doctors start prescribing them. The agency should place “greater emphasis on post-approval surveillance for safety issues to protect patients, rather than adding time and cost to innovative development,” he said in an statement. He highlighted the FDA’s standard requirement of two trials for approval and suggested a single trial - which would generally save biotech firms time and money - would be adequate.

In his barbed critiques, Ramaswamy has taken aim at the central tension in every FDA decision about a novel drug or device - weighing benefits against risks of serious side effects. The agency has procedures to accelerate approvals for truly novel drugs that address unmet health needs, but Ramaswamy argues faster action is needed.

Ramaswamy, with billionaire Trump adviser Elon Musk, is spearheading the “Department of Government Efficiency,” an outside-government project to streamline bureaucracy and carry out “mass head-count reductions,” the two wrote in a Wednesday op-ed in the Wall Street Journal. Ramaswamy left Roivant’s board in February 2023 when he launched his presidential campaign but is still one of its largest shareholders.

“It’s an obvious conflict of interest,” said Diana Zuckerman, president of the nonpartisan think tank National Center for Health Research, who said that the FDA has already lowered its standards considerably to speed novel drugs to market. “Some people might think, ‘He’s a knowledgeable person.’ He’s a knowledgeable person with a vested financial interest in what he’s saying.”

Ramaswamy said in a statement that he welcomed the scrutiny of his financial interests.

“People should absolutely take that into account when evaluating my recommendations,” he said. “Of course, reducing the cost of drug development would help thousands of companies (not just Roivant). But more importantly, it would also help patients and reduce health care costs.”

In an interview, FDA Commissioner Robert M. Califf said he knows and respects Ramaswamy but pushed back on some of the entrepreneur’s harshest criticisms, such as once questioning the need for the agency. “We tried that,” he said, pointing as an example to the drug thalidomide that caused birth defects in babies in the 1960s, “which is why the FDA exists in its current form.”

“Almost every additional authority at FDA has been because of a catastrophic public health event that harms people,” he added.

Califf defended the two-trial standard, particularly for new drugs when there are already effective therapies available, while emphasizing that the FDA frequently accepts less evidence for potentially life-changing therapies. As for Ramaswamy’s financial stake in biotech, Califf said, “at FDA, you’re not allowed to make decisions about industries in which you have a vested interest.” He added, “I would just say, the amount of money he has invested and what’s at stake speaks for itself.”

For experimental drugs that aim to treat serious conditions and fill an unmet need, the agency can grant accelerated approval with lesser evidence that allows a company to market the drug while it must continue to study the effectiveness.

In 2023, the FDA’s Center for Drug Evaluation and Research conditionally approved about 16 percent of its 55 novel drugs, while 65 percent used one or more of its expedited programs. Of all novel drugs approved in 2020, more than half relied on a single such trial, one study found.

On Saturday, Ramaswamy praised Trump’s choices to lead the FDA and other health agencies, saying he had met with them and “it’s clear they’re serious about reducing cost & they understand innovation is a key part of the solution.” Marty Makary, whom Trump tapped to lead the FDA late Friday, has emerged as a forceful critic of the agency’s culture, faulting it in a 2021 op-ed for a “counterproductive rigidity and a refusal to adapt.”

Trump and his transition team have yet to detail how the Department of Government Efficiency, or DOGE, will operate. Ethics experts said Ramaswamy and Musk might not have to comply with conflict-of-interest laws that apply to government employees - which can include divestment of personal financial interests that come into conflict with official duties - if DOGE is regulated as an advisory commission. But its structure remains unclear.

“They’re blurring the lines at this point,” said Richard Painter, a professor at the University of Minnesota who served as chief ethics lawyer to President George W. Bush. “We need to see how this plays out.”

Ramaswamy made his name as a wunderkind biotech analyst on Wall Street while earning a law degree at Yale, before striking out on his own as an entrepreneur. He told Forbes for a 2015 cover story that Roivant would be the “Berkshire Hathaway of drug development.”

To accomplish this, Ramaswamy set out to buy the rights to drug candidates that had been set aside by large drugmakers, betting this approach could help patients and generate an attractive return on investment - a goal enshrined in the first three letters of Roivant’s name. The engines of the company are its subsidiaries dedicated to developing therapies for discrete diseases.

Ramaswamy pulled off what was in 2015 the largest public offering in biotech, raising $360 million with the listing of Axovant, a Roivant subsidiary developing an Alzheimer’s drug. Controversy followed as a clinical trial failed to show a benefit and the stock value collapsed.

Roivant has gone on to develop several drugs that won FDA approval, but it has made a bigger splash for its savvy dealmaking. The company sold its ownership interest in five subsidiaries to Sumitomo as part of a $3 billion deal in 2019. It sold another subsidiary developing a drug for inflammatory bowel disease to Roche for $7 billion in 2023. And it sold a unit that developed a topical cream for a type of psoriasis to Organon for up to $1.2 billion this fall.

Roivant executives have told investors its pipeline of experimental drugs could someday be worth $10 billion a year in sales. Ramaswamy holds a roughly 7 percent stake in the company, in addition to stock options to purchase millions more shares.

Trial results for two drug candidates - one to treat an autoimmune condition that causes a skin rash and muscle weakness, another for an eye inflammation disease - are expected in the second half of 2025, executives have said. The trial for the autoimmune condition is designed to support FDA approval without a second one, the company has said.

Roivant declined to comment.

Ramaswamy criticized the FDA during his unsuccessful bid for the GOP presidential nomination, a campaign where he sought to distinguish himself with a provocative style on an array of subjects. He called the agency “corrupt” and its actions “hypocritical, harmful & unconstitutional” in July 2023.

After he endorsed Trump, he continued to slam the agency. “It’s not at all obvious that we’re better off for having an FDA at all,” he said in May, dedicating an episode of his podcast to the issue. He suggested that the private market could be a better judge of what patients should trust, similar to how customers rely on J.D. Power ratings to buy cars. “The FDA has actually crowded out the rise of those alternative intermediary institutions,” he said.

One biotech executive who has long known Ramaswamy has been alarmed by some of his positions on the FDA but says there is merit to the agency taking a more collaborative approach.

“He’s very, very, very smart,” said the executive, speaking on the condition of anonymity to preserve a relationship with Ramaswamy. “Deep down, I would hope that a lot of things he says publicly are to control the airwaves, to curry favor with the folks that he needs to curry favor with,” the executive said.

Several academic scholars interviewed for this story said they disagree with Ramaswamy’s contention that conducting two major clinical trials to replicate results is unnecessary.

Sanket Dhruva, a professor at the University of California at San Francisco School of Medicine, acknowledged that clinical trials are expensive and add to the cost of developing new medicines. Still, he said, “What about costs that are passed on to the health-care system using tests and treatments that are relatively unproven?” He argued that approving less-studied drugs can give patients false hope or cause them harm and add to higher insurance premiums.

Other scholars have questioned whether the two-trial standard should be revisited, calling for the FDA to exercise additional flexibility.

On Nov. 18, Ramaswamy criticized the FDA on X for “micromanagement of every single step” of the process of developing drugs, saying it “advantages big pharma over smaller biotechs.” But in one case, the agency’s scrutiny helped Roivant beat back an investor lawsuit.

Investors alleged in 2021 that Roivant and a publicly traded subsidiary misled them about a drug to treat autoimmune disorders, claiming the companies knew there was a risk of raising cholesterol but declined to monitor it in early trials. The subsidiary, Immunovant, identified higher cholesterol levels in participants who received the drug in a later trial and halted it, sending its stock into free-fall.

“If the issues with cholesterol levels tied to the drug were as obvious and critical as plaintiff claims, the FDA would not have permitted the clinical trials to proceed” without monitoring, a judge wrote. Because the FDA accepted Roivant’s trial design, the judge reasoned, the company’s statements “were thus reasonable.” The case was dismissed.