Regulatory Review Lags Yield Fewer Drugs in Development

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University researchers in the U.S. and Turkey say that, on average, three additional months of FDA regulatory review delay result in one fewer drug in development in that drug category. Writing in Health Economics the researchers say, “Our results suggest that the length of the regulatory review delay matters for pharmaceutical firms’ research and development decisions and that the firms are likely unable to pass on these costs to consumers.”

The researchers say that while many people believe that the central trade-off facing FDA involves balancing assurances that drugs are safe and effective with bringing treatments to the public as quickly as possible, this statement misses dynamic effects of the regulations such that if agency review takes longer, fewer treatments will be developed in the future.

According to the study, the reduction in new drugs in development due to delayed regulatory review does not constitute a policy recommendation without consideration of the other costs and benefits of the FDA review. But, it says, the results show that the time it takes FDA to review new drug applications should be an issue considered in policy debates.

“All else equal,” the authors conclude, “our finding that the drug loss stemming from lengthy reviews is substantial suggests that FDA should consider further ways to accelerate the review process.”

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