latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/fda-aims-to-help-drugmakers-lower-development-costs-pass-savings-to-americans-41941646 content esgSubNav
In This List

FDA aims to help drugmakers lower development costs, pass savings to Americans

Blog

2021 Year in Review: Highlighting Key Investment Banking Trends

Blog

Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

Blog

Global M&A By the Numbers: Q3 2021

Blog

Post-webinar Q&A: Global Credit Risk Trends 2021 and Beyond


FDA aims to help drugmakers lower development costs, pass savings to Americans

The head of the U.S. Food and Drug Administration on Sept. 11 said his agency was taking new steps to ease drugmakers' clinical development burden and lower their costs, which he said in turn would reduce the prices Americans pay for their medicines.

Scott Gottlieb, commissioner at the FDA, gave no guarantees those cost savings would be passed on to U.S. consumers. But he insisted the current cost of drug development is on an "unsustainable path" and that actions must be taken now by his agency to turn the tide.

"Otherwise, we won't continue to realize the practical benefits of advances in science, in the form of new and better medicines," he said at the 2017 Regulatory Affairs Professionals Society conference in Washington.

Gottlieb argued the high costs of drug development can be a barrier to competition, especially if a product is the second or third to the market, and it also can result in some medicines never being produced if companies fear they will not make a profit.

Forestalling useful innovation ultimately can increase the overall costs of healthcare, the FDA chief said.

Gottlieb noted the FDA already has taken some steps to help lower the costs of medicines to consumers, like boosting generic competition — an area on which he said the agency would continue to build.

The agency also has targeted practices by branded companies that attempt to game the system to extend their monopolies, he added.

"But we also need to address the other side of the continuum, where the costs start: With the high and rising expense of developing a novel drug," Gottlieb explained. "We know some drug programs can easily top $1 billion, just in direct outlays."

At the heart of the matter is the cost of the capital, which is affected by the risk of failure and the anticipated time it takes to develop a new product, Gottlieb said.

Reducing the impact of those factors can help cut the costs of capital, which ultimately will lower the costs of development, he said.

New approaches

One of the key ways the FDA seeks to help drugmakers lower their costs is by advancing the use of new tools and clinical trial designs, like adaptive approaches, which Gottlieb said allows scientists to enrich studies for patient characteristics that correlate with benefits or that help predict which patients are least likely to experience a certain side effect.

"This predictive information is valuable. It can be incorporated in a new drug's label and help inform more careful prescribing," he said.

One such approach is the so-called seamless trial designs, in which the phases of studies are combined — a method that increasingly is being used by makers of cancer drugs, particularly for the newer immunological therapies, Gottlieb noted.

"By using one large, continuous trial, it saves time and reduces costs," he said.

It also means fewer patients have to be enrolled in a trial, Gottlieb added.

Seamless designs are particularly advantageous for drugs that work in a variety of diseases, allowing rapid evaluation of the drug and potential approval under the agency's accelerated approval pathway, he said.

The FDA also is advancing the use of so-called master protocols, in which the same trial structure is used to evaluate treatments in more than one subtype of a disease or type of patient — an approach that is increasingly being used in targeted medicines that could be relevant across many different disease subtypes, Gottlieb said.

But he also acknowledged those new strategies bring uncertainties that can create risks. "So, as in all of our regulatory efforts, we must also take additional steps to make sure that we're protecting patients and ensuring drug safety," Gottlieb said.

Informed consent must be updated as the trial progresses, not only to reflect new safety data, as is already standard practice, but also to incorporate data on the evolving view of efficacy, he said.

Evaluating information

The FDA also is taking new steps to modernize how drugmakers can evaluate clinical information and how the agency reviews those data as part of its regulatory process, Gottlieb said.

He said the FDA is investing more in advanced computing tools — an area that is limited at the agency — and is using more sophisticated statistical and computational methodologies in its drug review process.

To better delineate how the FDA is going to approach the overall development and evaluation of drugs targeted to certain unmet medical needs, the agency plans to begin work on at least 10 new disease-specific guidance documents over the next year, Gottlieb said.

"Unless we find ways to modernize how we approach our work and make more efficient use of our resources, then we're going to get fewer medicines and higher costs," Gottlieb concluded.