This suggests that the pharmaceuticals industry may be returning to more normal productivity levels after spikes in approvals in 2014 and 2015 when approvals for the market hit a 19-year high.
John Jenkins, the FDA's director of the office of new drugs said that many factors led to the drop in 2016. The key factor appeared to be timing as five new drugs that were scheduled for approval in 2016 obtained the green light at the end of 2015.
More drug approvals being rejected or delayedAnother factor was the increase in number of Complete Responses (CR), which describe deficiencies in the application, precluding approval, with advice on what pharmaceutical companies need to do for the FDA to support resubmission of the application.
Possibly due to political pressures, FDA issued 14 CR letters in 2016, higher than in recent years as it moves towards tightening regulation and standards for approval, making sure each new drug is safe and effective for intended use and that the quality of manufacturing is high.
The FDA rejected or delayed more applications in 2016 compared to the previous two years as many did not comply with FDA's current Good Manufacturing Practice (cGMPs) regulations.
Some delayed drugs include Roche's multiple sclerosis treatment Ocrevus and Sanofi and Regeneron's sarilumab for rheumatoid arthritis, which may be approved this year instead.
Pharma industry remains hopeful with recent advances
In general, pharma companies also filed less drug approvals due to shortcomings in R&D. But most pharmaceutical industry executives remain hopeful on the hunt for new medicines due to recent advances in the battle against cancer (CAR-T) and improved understandings of the genetic basis of other diseases thanks to CRISPR, full development of pipelines have started at many companies.
Experts say that this trend should not be read into too much as drug approvals tend to swing on a pendulum. A decade ago, the FDA was criticised for not being quick enough to approve drugs. Now, they are being criticised for being too quick, and for clearing treatments that have not been necessarily proven effective.
But the downward trend in 2016 might be reversed as incoming US President Donald Trump has said that he wants to speed up drug approvals and cut through "the red tape at the FDA" and Obama signed the 21st Century Cures Act, which has been overwhelmingly supported by Congress, into law. But critics still stand by their argument that it could lower FDA standards and allow unproven therapies to reach patients.
However, they need not worry as getting the drugs through the approval process and securing a profitable return upon their launch, is challenging for pharmaceutical companies, especially recent resistance from healthcare insurers and governments about the rising cost of medical treatment.
Returns on R&D investments at the top 12 pharmaceutical companies dropped from 10.1% in 2010 to 3.7% in 2016, according to Deloitte, a consultancy firm.
Development of orphan drugs lead to higher drug pricesThe increasing political pressure regarding the prices of many modern medicines is especially challenging as biotech and pharma companies are developing more orphan drugs targeted at niche patient populations.
With a small patient population, the orphan drugs are priced ridiculously as pharma companies seek a reasonable return. As seen in the last drug to win FDA approval in 2016, Spinraza developed by Biogen and Ionis Pharmaceuticals, is priced at USD125,000 per dose. It is the first medicine to treat patients with spinal muscular atrophy, a rare and often fatal genetic disease.
That implies a total cost of USD625,000 to USD750,000 for patients in the first year of treatment and USD375,000 in subsequent years.
Thus, it remains to be seen if President-elect Trump will manage to bring down drug prices as promised. MIMS
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