One of the key challenges for life science research and development (R&D) is identifying which biochemical pathways and diseases to target. Given the average cost of bringing a new drug to market is now an estimated $1.3 billion dollars as revealed in our 2013 R&D ROI report, it's clear that R&D leaders are looking to maximise their returns. However, it is also becoming increasingly clear that only those drugs that deliver additional patient benefits will gain approval and funding.

Historically, payers and regulators remained somewhat isolated from industry and were gatekeepers to market access – controlling the approval, pricing and availability of drugs. While this gatekeeper system remains in place, there is a shift underway in the relationships between life science companies, payers and regulators – new ways of working are being developed to support the R&D of new drugs which target diseases previously thought to be too risky for the industry. Some of the key changes have been the introduction of financial incentives, such as tax breaks on R&D costs and fast-track mechanisms that remove some of the risk for life science R&D.

As long ago as 1983 the US Food and Drug Administration (FDA), saw the need to support R&D into rarer, more severe or life-threatening diseases (known as orphan diseases). Historically these were of little interest to the industry as small patient numbers meant collecting trial data was problematic and the financial investment was unlikely to deliver a return. Through the provision of financial incentives and fast-track approvals, that require only a limited amount of clinical trial data, the FDA, along with other regulatory bodies in Europe, Japan and France, reduced the hurdles and therefore risk to industry in developing orphan drugs.

The FDA has continued to spearhead new legislation but this time focussing on a wider range of 'serious' conditions. Two notable programmes have been introduced to speed up the route to market; Fast Track Designation (FTD) and, more recently in July 2012, Breakthrough Designation (BD). FTD focuses on drugs which fulfil an unmet need (i.e. there is no current therapy), BD focuses on drugs which show an improvement over existing therapies.

Since its introduction of BD less than two years ago, the FDA's Center for Drug Evaluation and Research has granted 48 of the 162 BD requests received, its sister organisation the Center for Biologics Evaluation and Research, has granted four of 30 requests. According to GlobalData, six BD drugs have received marketing authorisations, three of these authorisations were based on phase I or preliminary phase II trial data that included less than 130 patients each. The time from submission to approval was less than five months. Eight of the leading life science R&D companies have successfully received BD for particular drugs, and a quarter of all BDs have been granted to drugs developed by emerging Biotechnology firms, indicating that system is attractive for all segments of the life science R&D industry.

Both OD and BD legislation appear to be successful at promoting R&D into areas of high unmet need, which can only be good for all concerned. However, there are a number of key challenges which are evolving;

  • Regulators need to ensure that appropriate levels of resource (funding) are provided to manage these new and challenging fast-track programmes. Dr Margaret Hamburg, the FDA Commissioner, has raised concerns over the increased responsibilities and workload of the FDA, which has used up more of the agency's time and resources than anticipated. 
  • The emerging importance of personalised medicine and patient subpopulations within a disease means that more diseases are increasingly being categorised as rare or orphan – again, adding to the workload and putting more pressure on specific skillsets required within the regulatory environment.
  • There appears to be concern that the focus of R&D activities is still dominated by relatively few diseases which have received a disproportionate amount of R&D investment over the last decade, examples include oncology-related conditions, HIV and ODs. Regulations which further focus R&D activity on these types of illness will do so to the detriment of broader, chronic diseases such as Dementia, Alzheimer's and heart disease which previously have had limited attention yet exert a significant burden on healthcare budgets and society.

Fast-track regulations to expedite the approval process and programmes which have focussed R&D attention onto rare and life-threatening diseases have proven successful. Moving forwards it is imperative that mechanisms to incentivise R&D into broader disease areas, with a high societal cost burden, are found. 

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