Impact of Approvable Letters 2007 – Part 1

I do not currently have a way of counting and comparing the number of approvable letters issued over the past few years, but my gut tells me that 2007 was a banner year.  I am currently compiling the 2007 list and hope to publish it this week or early next.

However, it is important to think about the implications of so many approvable letters.  They represent more than an inconvenience to companies and to patients who are awaiting therapies with serious implications for both, as well as for investors in companies, particularly smaller companies that do not yet have a product on the market.  Here are just a few of the effects of so many approvable letters from my perspective:

  • An Erosion of Intellectual Property – When a company files its application with the FDA, its patent has already begun and the clock is ticking on that patent.  The longer the FDA takes to consider and to approve a new compound, the less valuable the compound is when it (and if) it is finally approved and enters the marketplace, because there is less time for the drug to have market share and recoup the investment costs represented in its development.  That means either (1) the drug will have to be priced more expensively (which is counter to patient and public interest), or (2) the company may not get back as much funding to reinvest into new research and development (again counter to patient and public interest, as well as those of investors). 
  • Small Companies Particularly Suffer – Over 2007, both small and large companies were well represented among those who received approvable letters.  However, if a company with no product yet on the market receives an approvable letter for an investigational compound, it can be devastating to the company.  Consider that an approval means that a company wants to move to the market quickly, which requires, among other things, a geared up and trained sales force.  An approvable letter necessarily means that a company has to either maintain that force without sales to support it or to lay them off.  Needless to say, the return for investors is not there either.   As I’ve said in this space before, if the FDA is moving the goal posts on approvability, the standards should be clear so that the impact on companies, employees and investors can be minimized.  Otherwise, start up and innovative companies may find it harder to raise the cash needed to produce tomorrow’s miracles today.  It is in the public interest to have policies that encourage America’s innovation in creating new compounds, not to hinder it. 
  • Setbacks to FDAMA and PDUFA –  In the 1990s, with the HIV epidemic whirling out of control and no treatments for people diagnosed with AIDS, there was a tremendous public appetite (and hence policy-maker action) to get drugs approved more quickly.  Hence, FDA reform in the form of two pieces of legislation that accomplished just that by shortening approval times and allowing for Fast Track and Accelerated Approvals.  Now in the 00’s, we have a situation where the priority is risk aversion over access.  Until that changes, the manifestation of that environment is to undo0 the good work of the reform legislation of the 1990s. 

Those are just a few thoughts on this all-important topic.  More to come.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
This entry was posted in Approvable Letters. Bookmark the permalink.