Getting medicines to market faster

REGULATORS can be both a help and a hindrance to the medical industry. A strong regulator increases confidence in drugs and devices, reassuring payers and patients alike. That explains why the Chinese drugs regulator recently adopted tougher standards. Yet rules can also impose too great a burden on firms, slowing innovation and reducing competition.

The head of America’s Food and Drug Administration (FDA), Scott Gottlieb, has spent his first year in office tilting the balance away from rulemaking and towards efficiency. Some criticise Mr Gottlieb, who once worked in the industry, for still being its accomplice. Instead, he should be applauded. Nobody expects the FDA to solve America’s messed-up health-care system, but its goal—of making it cheaper and easier for promising drugs to reach patients—is a step in the right direction (see article).

One thing Mr Gottlieb has been doing less of is issuing new regulations, which have dipped to a two-decade low. Instead, he has concentrated on two broad areas that will help the development of therapies and medicines. The first is to adapt the FDA to new technologies. There is a clinical revolution in such areas as gene therapy and printed organs. The FDA is keen to harness the potential of new technologies, whether that means using information from wearables in drug trials or enabling faster approval for new digital therapeutics.

The second focus has been on getting more drugs to market. The agency has approved a record number of generic drugs in the past year. By increasing the amount of competition, the idea is to bring the price of copycat drugs down. The profits of Indian generics firms, which have been making hay in the American market, are expected to suffer as a result.

Under Mr Gottlieb, the FDA is also doing its best to limit the extraordinary burden of introducing new drugs. The average cost of bringing a new medicine to market has jumped to $2bn, up from $1.2bn in 2010. After repeated expensive failures, many firms have cut funding for treatments for neurodegenerative diseases such as Alzheimer’s.

In response, the FDA wants to find ways to accelerate clinical trials. It is also looking at lowering the standard of efficacy, though not safety, which is required to approve certain treatments. Instead of having to demonstrate that long-term outcomes, such as cognitive function for dementia, are improved, a drugmaker might have to show only an improvement in a biological proxy for the disease, such as the presence of toxic proteins in the brain. This approach is already in place for cancer drugs. Its wider adoption ought to encourage innovation.

Inevitably, accelerating the path to market for pharma firms involves a trade-off. It may well be better to give people the option of a treatment in five years whose efficacy is known with 80% certainty than to wait 20 years for one with 99% certainty. But the shift increases the risk that money will be spent on new drugs that end up being no more effective than existing ones. This risk is particularly high in America, where the idea of paying for medicines on the basis of their actual performance is seen as an affront to patient choice. To get the benefit of faster innovation while minimising the risk of unnecessary spending, that attitude has to change. The FDA is doing its bit to speed innovation. But buyers of drugs need to do more to tie payments to health outcomes. The reality of paying too much for any new medical technology that does not work well is that there is less to spend on the things that do.