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Regulatory innovation

Back to School Issue

For the past five years, BioCentury's Back to School Commentary has explored facets of life sciences innovation throughout the value chain, including the economics of innovation, the drivers that define the value of innovation, the substance of innovative leadership, innovation in the face of adversity, and the changing ecosystem for innovation. But we are not yet done. It is now time to address regulatory innovation.

Regulatory innovation is the sine qua non for the global drug development enterprise to deliver on its promise, which has been created by an explosion of basic science, coupled to one of the world's most complex industrial infrastructures, and built by trillions of dollars in public and private investment over the last three decades.

Indeed, regulators are more than the gatekeepers who determine whether patients will have access to innovations that change the way healthcare is provided. The regulatory system is the rate-setting force that determines the speed at which new treatments reach the market and thus the return on risk-taking investor and corporate capital.

Although regulators can't review applications that haven't been submitted, and therefore are not directly responsible for the pace of new drug development, regulatory policies can and do determine whether it is economically feasible to develop products to address unmet medical needs.

To fulfill their public health mission, regulators must take a hands-on role in translating science into products for patients who desperately need them.

But no one - not in industry or the regulatory community - can argue that the current paradigm for reviewing and approving drugs and diagnostics is able to accommodate new science, much less integrate it. Indeed, the regulatory system is falling farther and farther behind the science.

It clearly is struggling to balance benefit and risk in a way that adds value to patient lives. And in its quandary over evaluating risk, the existing system delays putting new medicines and diagnostics into the hands of patients and physicians who ultimately must decide whether a treatment is worth its risks. These delays feed back into the product development system, increasing costs and reducing incentives for creating products with the highest degrees of regulatory uncertainty - the novel products that have the greatest potential to benefit patients.

This is far removed from what should be the first principle of healthcare regulation, which is to improve healthcare outcomes by applying new science and best management practices to create new pathways for discoveries to reach patients. Properly conceived, organized and funded, the regulatory system should be accelerating the development of effective therapies.

There have been outbursts of regulatory innovation, most notably in the pursuit of therapies for Orphan diseases. But at least in the U.S., this experience has not been exploited to address all the opportunities to accelerate treatments where broader needs remain unmet, where existing treatments need to be replaced, where patients are not adequately served by existing treatments, and where the entire course of disease could be modified.

The 18th Back to School Commentary thus contends that the regulatory system is not configured to learn, and until it learns to adapt to science and clinical experience, the regulatory paradigm will continue to delay the progress of needed treatments to patients and drive risk capital to invest in other endeavors.


The situation

The specifics of the best kinds of regulatory innovations, and how to implement them, can be debated. But the need for fundamental changes in the regulatory system is irrefutable.

FDA flagged the problem in a 2004 report, "Innovation or Stagnation: Challenge and Opportunity on the Critical Path to New Medical Products."

The agency noted a "growing concern that many of the new basic science discoveries made in recent years may not quickly yield more effective, more affordable, and safe medical products for patients."

The report also noted with alarm that for "several years, the number of new drug and biologic applications submitted to FDA has declined significantly; the number of innovative medical device applications has also decreased. In contrast, the costs of product development have soared over the last decade."

While "Innovation or Stagnation" could have been groundbreaking, its message did not take root. The situation has only gotten worse over the last six years, as the safety tsunami has swept away all thought of accelerating product development.

Only a trickle of new priority drugs is making it through to patients, and there is no evidence of pipeline bulges that will work their way to regulators in the foreseeable future.

On the contrary, after over a decade with little variation, the number of drug applications is expected to drop sharply this year.

Based on user fee-based applications received through August, FDA predicts it will receive 117 NDAs, BLAs and supplement applications in 2010, a 16% drop from 2009 and the lowest total since 1994. More worrying, when supplements and applications that do not require clinical data are stripped out, the number of applications is projected to plunge 25% this year (see "Growth vs. Stasis").

The imperative for change can also be seen in the gap between the advances in basic science, especially molecular biology, over the last 40 years and the plodding pace of approvals of the most medically valuable new drugs.

Harold Varmus called this out in July at a town hall meeting marking his appointment as director of the National Cancer Institute.

"There is an often noted paradox, and that is a fairly simple one," he said. "Despite the extraordinary progress we've made in understanding the underlying defects in cancer cells, the scientific progress that we have made in trying to

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