By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
It’s been 19 years since anyone has seen the approval of more first-of-a-kind drugs by the U.S. Food and Drug Administration (FDA). 2015 proved to be a year of satisfactory innovation for medicine. With the approval of 45 drugs formulated with never-before-sold ingredients, the FDA came close to surpassing its previous all-time record of 53 first-of-a-kind drug approvals in 1996.
The increase in newly formulated drugs is a reflection of the industry’s shift in focus to a greater availability of treatments for rare and hard-to-treat diseases. This expansion is also a good indicator of the government’s acquired efficiency in reviewing new therapies and heightened scientific understanding of diseases that once eluded the medical community.
However, such progress is not without its challenges. The increased specialty drug approvals may be a further catalyst in the ongoing political debate over rising prescription drug costs. Furthermore, most pharmaceutical companies still struggle with timely research and development (R&D) turnarounds, sufficient returns on investment (ROI), and effective marketing launches for new drugs competing with their more affordable generic counterparts.
For a full listing of the FDA’s press announcements for first-of-a-kind drugs approved in 2015, click here.
As Innovation Rises So Do Prescription Drug Costs.
Innovative new drugs for rare and hard-to-treat diseases often come with problems of their own that need curing. In addition to streamlined reviews and extra patent protections, one of the inconveniences attributed to innovation in medicine is the higher price tag associated with the up-and-coming prescription drugs. This issue has created such a stir among the pharmaceutical industry and consumers alike that it is even a hot topic in the current presidential campaign. Some candidates have even proffered outlined proposals meant to bridle the rising costs.
Presently, the FDA is restricted from considering prices during the drug approval process. This results in the anonymous approval of drugs carrying a price tag in excess of hundreds of thousands of dollars for a year’s supply. One of the most expensive drug approvals of 2015, was Vertex Pharmaceuticals’ Orkambi, formulated to treat cystic fibrosis and costing $259,000 annually.
Pharmaceutical Industry Faces Its Own Cost-Related Difficulties.
Whether or not the running price for improved lung function is set at $259,000, is perhaps debatable. However, it is known that big pharmaceutical companies can spend billions of dollars each year on R&D and struggle to obtain a decent ROI. Several factors contribute to a lackluster ROI for drug makers.
The time it takes to research and develop one new drug averages 14 years. This is an increase from past projections of 11 years in the 1990s. This escalation in turnaround time is due to more complex drug trials and health insurers’ requests for increased data stores.
Furthermore, new medicines frequently possess dismal sales forecasts. Additionally, they are pitched alongside a growing list of their cheaper generic formulations.
Still, It’s Not All Bad.
It was reported by Reuters and The Associated Press (AP), that the trend in heightened innovation in medicine will continue in 2016. AP reported that “IMS Health predicts 225 new drugs will be approved worldwide between 2016 and 2020.” Furthermore, Reuters publicized analysts’ belief that 2016 will also bring “further advances in cancer treatments […] and significant progress in drugs for autoimmune diseases.”
That’s certainly good news for the pharmaceutical industry and medical community alike as we enter a new year!
What are your thoughts on the increased FDA approvals of first-of-a-kind drugs? Are you excited about the prospect of further advancements in medicine in 2016?
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Hirschler, Ben. “Drug Approvals at 19-Year High Belie Industry Challenges.” Reuters: 4 Jan. 2015. Web. 5 Jan. 2015.
Perrone, Matthew. “First-Of-A-Kind Drug Approvals Continued Rise in 2015.” The Associated Press: 4 Jan. 2016. Web. 5 Jan. 2015.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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