(Adds rise in British tobacco stocks)
By Yasmeen Abutaleb
WASHINGTON, March 6 (Reuters) - U.S. Food and Drug Administration Commissioner Scott Gottlieb said on Tuesday that he plans to step down next month, a sudden resignation that calls into question how the agency will handle issues such as surging e-cigarette use among teens and efforts to increase competition in prescription drugs.
Gottlieb was well regarded by public health advocates and won bipartisan support for his efforts to curb use of flavored e-cigarettes by youths, speed approval times for cheap generic medicines to increase competition and bring down drug prices, and boost the use of cheaper versions of expensive biotech medicines called biosimilars.
Unlike his predecessors, who said drug pricing was not the purview of the FDA, Gottlieb waded into the intensifying debate about the high cost of medicines for U.S. consumers and had the agency actively looking into possible solutions.
"Scott's leadership inspired historic results from the FDA team, which delivered record approvals of both innovative treatments and affordable generic drugs, while advancing important policies to confront opioid addiction, tobacco and youth e-cigarette use," Health and Human Services (HHS) Secretary Alex Azar said in a statement.
Gottlieb, who said he wanted to spend more time with his wife and three young children in Connecticut, was nominated by President Donald Trump in part to aid in Trump's anti-regulation agenda. But Gottlieb took an aggressive stance toward e-cigarette makers, such as Juul Labs Inc.
On Monday, he confronted 15 retailers including Walgreens Boots Alliance, Kroger Co and Walmart Inc , for illegally selling tobacco products to children. In early February, the FDA pursued enforcement actions against some Walgreen and Circle K locations.
But Gottlieb ran into fierce opposition from anti-regulation groups, such as Americans for Tax Reform, and former FDA officials, who said the agency's regulatory efforts would destroy thousands of jobs.
A coalition of these groups wrote Trump last month asking him to "immediately halt the Food and Drug Administration's aggressive regulatory assault" on e-cigarette businesses.
Following news of Gottlieb's resignation, the Nasdaq Biotechnology Index turned negative.
It closed down 0.5 percent as shares of Amgen Inc erased gains and Gilead Sciences Inc shares fell further.
“He made proposals that were unprecedented in their breadth, scope and, if they were adopted, likely impact,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids. “But they were just proposals."
Shares in British American Tobacco and Imperial Brands rose in early London trade on Wednesday.
Gottlieb had signaled his intention to also go after menthol and other flavored cigarette products, sending BATS and Imperial down sharply at the time.
"He has been the driver of the menthol ban, and now the sector is totally under-owned," said one London-based trader.
Gottlieb's campaign against flavored e-cigarettes followed preliminary federal data showing teenage use had surged by more than 75 percent since last year, which the FDA described as an "epidemic."
Under Gottlieb, the FDA proposed a ban on the sale of fruit- and candy-flavored electronic cigarettes in convenience stores and gas stations. The FDA also proposed stricter age-verification requirements for online sales of e-cigarettes.
"Scott has helped us to lower drug prices, get a record number of generic drugs approved and onto the market, and so many other things. He and his talents will be greatly missed!" Trump said on Twitter on Tuesday.
Trump picked Gottlieb to lead the agency in March 2017 and he was confirmed by the Senate in May of that year.
The Washington Post first reported on Tuesday that Gottlieb planned to resign.
"There's perhaps nothing that could pull me away from this role other than the challenge of being apart from my family for these past two years," Gottlieb wrote in a note to FDA staff.
In his resignation letter, Gottlieb touted several agency initiatives, including efforts to curb tobacco use, decrease the rate of opioid addiction, speed up approval of generic drugs and streamline the process to bring to market novel medical technologies, such as gene therapy.
Gottlieb, 46, a conservative and former physician, was deputy FDA commissioner under Republican President George W. Bush. Before taking over at FDA, he was a healthcare investor and consultant who sat on multiple company boards.
He surprised critics who worried about his ties to the pharmaceutical industry by speaking out about rising drug prices and drug company tactics to keep competitors off the market.
“In all my years of public service, I’ve never worked with a more talented, forthright, and effective agency leader than Dr. Scott Gottlieb," Republican Congressman Greg Walden said in a statement. "He worked effectively with Congress to find solutions and to improve the quality of life for all of us."
Gottlieb often touted that the agency had approved more than 1,000 generic drugs as evidence that it was helping to curb prescription drug prices, a priority of Trump's administration.
Among those seen as possible successors, according to the Wall Street Journal, are Norman Sharpless, director of the National Cancer Institute, and Brett Giroir, assistant secretary at HHS. Giroir has been the senior adviser to Azar for HHS efforts to fight the opioid crisis.
In January, Gottlieb said in a tweet that he did not plan to leave the agency after speculation that he was preparing to step down. "We've got a lot of important policy we'll advance this year," he wrote in the January tweet.
Reporting by Yasmeen Abutaleb and Tim Ahmann; additional reporting by Chris Kirkham in Los Angeles and Helen Reid in London; editing by Eric Beech, Jonathan Oatis and Bill Berkrot