FDA Approvals: Is it really as bad as they say? 
Posted by Carlos on Jan 07, 2014



This week we’re greeted with the following headlines:

The FDA Approvals of 2013: A Watershed?

US new drug approvals slip in 2013 vs prior year

An ominous trend resurfaces as new drug approvals plunge in 2013

Is it really all that bad?

Is our industry doomed?

The headlines are driven by the 27 NMEs approved by the FDA in 2013, which is definitely a decline from the 39 approved in 2012 and the 30 in 2011.

In fact, 2012 was a banner year not only because of the high number of NME approvals, but also because 20 of the 39 were First-in-Class (see this CDER PDF for the data).


If you look at NME approvals from 2003-2012, the FDA averages 25-26 a year. There have been some peaks (36 in 2004) and some valleys (18 in 2007).


So, if anything, the 27 NME approvals in 2013 a return to the mean.

McKinsey makes the same point in their analysis, noting that the 20-year average of NMEs from 1993-2012 was 28 per year (See this CDER PDF for historical data)

Having said this, there are some worrying signs, such as Big Pharma approvals relative to Sales and R&D spending.

Gone are the days when Big Pharma could launch an NCE that was 5th in the Class and still generate millions in sales and 5% p.a. pricing growth rate.

But there is good news in that companies which used to be called “biotech” or “small pharma” are doing well, such as Gilead, Celgene, and others.

And, there appears to be a movement towards earlier-stage in-licensing by Big Pharma. Plus, judging by the attendees at the upcoming Biotech Showcase, there are a number of venture firms looking for early-stage investment opportunities. 

The fact remains that the things which make up drug development: chemistry, biology, pharmacology, clinical trials…these are all incredibly difficult and unpredictable activities which are largely out of our control.

So we think the results from 2013 should be placed in their proper context. There is no question that the industry has challenges.

However, as long as there are diseases with unmet needs, there will be creative scientists and clinicians who will discover new drugs and new treatment modalities.

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