Spring 1995 Volume 4, Number 1

---

BY PETER WILLIAMS, B. SC.

In the last thirty years, expansion of Federal oversight of pharmaceutical product marketing has provided the United States with the world's most strict and sophisticated regulatory apparatus for pre-market approval of new drugs and post-market monitoring of drug safety.

Despite its evident progress in protecting the consumer, some commentators now cite the Food and Drug Administration (FDA) as a heavy-handed bureaucracy that discourages innovation and limits economic performance. It has also been argued that the consumer suffers when the FDA takes longer that its foreign counterparts to approve an important new drug.

The virtues and shortcomings of the FDA are more than an abstract policy question. In 1994, 46 new drugs were in development for mental illness (half of them in advanced development or under final FDA review) and a further 37 were under development to combat the leading causes of neurodegeneration (stroke, Parkinson's disease and Alzheimer's). With huge drug research costs and potentially high benefits to patients, conflict over the regulatory process puts industry, regulators, politicians and the public alike in a momentous predicament.

Extreme critics of the FDA suggest that market mechanisms should regulate the efficacy ("consumers will stop buying ineffective products") and safety ("the commercial insurance market will offer protection to consumers against unforeseen side effects") of drugs. These sentiments conjure up the era prior to the Food, Drug and Cosmetic Act of 1938, when drug safety was almost entirely the responsibility of the consumer, with disastrous results.

What has stimulated such radical and, at times, vitriolic commentary? It is clear that many conflicts surround the drug approval process, conflicts that cannot easily be reconciled. The drug approval process discourages technological innovation, for a variety of reasons:

• The FDA approves a new drug under very narrow terms. For instance, once approved for one disease, a drug will often require additional FDA approvals before it can be promoted or sold for treatment of a different disease, or if the method of manufacture, formulation or dosage of the drug is altered.

• The complexity, time and cost of the drug regulatory process has mushroomed. Currently, FDA review and approval of new drug applications takes on average 2-1/2 years, compared to seven months in the 1950's. The 1950's were also the decade in which the number of new products introduced peaked. Drug development became even more costly in the 1960's, when the FDA overhauled its safety approval procedures and for the first time took on approval of product efficacy. The cost to bring a new product to market more than doubled in real terms to over $200 million between the 1970's and 1980's, and most of this increase can be attributed to enhanced regulatory oversight. Total time for development of a new drug, from earliest discovery to market approval now averages twelve years.

• High costs and long lead times have raised the level of risk in drug development. As time to market has increased, there is less room for failure in securing regulatory approval. The recent decline in the fortunes of the biotechnology industry has been attributed in large part to inadequate design and conduct of clinical trials. Even the large pharmaceutical companies, with more substantial capital resources, are now trying to focus their research programs on a smaller number of drug targets in order to improve the efficiency of their drug development programs.

• To maintain pricing and profit levels in a changing health care environment, manufacturers are seeking to provide new therapies for previously unmet medical needs. Much of this innovation has been sought by the application of biotechnology. Currently, new biotechnology-driven therapies comprise over 50 percent of new drug applications. Unfortunately, the FDA is likely to react even more cautiously in evaluating a "breakthrough" product.
  

  In support of the FDA, it could be argued that the Administration has already done much within its power to help drug producers grapple with the regulatory difficulties and that many criticisms leveled at the FDA are unbalanced or unwarranted, or both.

• The FDA is subject to increasing Congressional oversight and control, and the legislature is not always sympathetic to special pleading from drug producers. The high profits earned by pharmaceutical companies in the recent past have been seen as evidence of predatory pricing, at the expense of the consumer and domestic economy. There has even been speculation on possible legislation to require FDA to factor drug pricing into the regulatory framework.

• The FDA must be seen to impose the highest ethical principles in dealing with public health and safety issues. Given the pivotal commercial importance of new drug approval, the potential for bias in either drug discovery or clinical trials is obvious, and more widespread financial arrangements between corporate sponsors and academic scientists and clinicians have heightened public concerns. Cases of fraud by pharmaceutical company employees have reminded the public of the value of the FDA's policing role. Recently, the FDA proposed conflict of interest guidelines to provide oversight of financial ties between corporate sponsors and independent clinicians in academic centers. Similar controls are under consideration for pre-clinical research scientists.

• In response to industry's frustration at the "drug approval logjam," the FDA has attempted several new initiatives to speed up the regulatory process. These include:
  • Recruitment of 300 additional staffers has been targeted for the period 1993-1997, and the costs of recruitment and training will come from an estimated $60 million in fees charged to drug companies. This is the most significant attempt at enhancing productivity.

  • Approval of New Drug Applications offering substantial gain in the treatment of severe and life-threatening diseases has been accelerated.

Despite attempts to speed up drug approvals, there are doubts about the amount of change the regulatory system can tolerate. Fast track drug development procedures introduced in the late 1980's and early 1990's to bring through new treatments for diseases such as AIDS and cancer are being reevaluated. Prompted by unexpected patient deaths, the FDA recently announced a further tightening of its procedures for submission of safety data for clinical trials. Caution is once more the watchword.

From an economic perspective, the risk to the individual of serious or even life-threatening effects should be traded against the disbenefit of slowing the advent of new drugs to the market. From an ethical standpoint, risk of serious effects to even a tiny minority of patients might be unacceptable. Risk evaluation is, of necessity, a long-term process. As drugs are tested on larger and larger numbers of patients in clinical trials, the chance of discovering unwanted side-effects increases. If risk minimization is a priority, it pushes inevitably in the direction of increased pre-market testing and post-market surveillance.

Can a balance be found?

One possible shorter-term option would be to limit reform efforts to trying to improve FDA administrative procedures and management, with a view to further cuts in drug approval times. This would fail to address the main issue underlying any fundamental change: Would the public be willing to accept even a small incremental risk in new treatments for anything other than life-threatening medical conditions?

In a recent, albeit controversial, study, the FDA scored well against its foreign counterparts in terms of the number of drugs removed from the market on safety grounds. In stimulating reform, the Federal government might be wary of creating any perception of an increased risk to the public, and the political and legal liabilities that could ensue. If such a perception cannot be dispelled, who will bear the responsibility for additional risks? To achieve lasting reform, it might prove necessary to change product liability law, the other major factor influencing development of new drugs and medical devices.

Product liability in the U.S. constrains the introduction of new biomedical technology. For instance, it has been reported that pending product liability claims in the vaccine field outweigh total market revenues, and some vaccines are kept on the market out of a sense of public responsibility rather than profit motive. The new Republican Congress is interested in tort law reform, but it remains to be seen whether the opposition of powerful lobby groups, such as the Trial Lawyers Association, could be overcome.

Despite these problems, it would seem justifiable to continue to regard therapies for life-threatening or debilitating diseases as a special case. If the FDA and the drug companies made available sufficient information, patients themselves might in the future decide whether the risk of unwanted effects outweighs the therapeutic advantage offered by a new drug. Support groups and foundations for specific diseases, and treating physicians too, would have an important role to play in returning greater choice to individual patients. Given a concerted effort to raise public awareness of reform issues, it might prove possible to achieve some additional, durable relaxation in FDA procedures in areas of greatest need.

The complexity of issues surrounding drug approval is such that the debate about FDA reform will continue to rage for some time. But change, when it arrives, is likely to be incremental rather than revolutionary. The stakes are just too high for it to be otherwise.*

Mr. Williams is Senior Manager at Harvard Medical School's Office of Technology Licensing & Industry-Sponsored Research.