2014 proved to be a productive year for both the pharmaceutical industry and the US Food and Drug Administration (FDA). In total 41 new drugs were approved, providing a much needed upturn in a decade of moderate and sustained decline evidenced by an average of 26.8 approvals per year from 2005 to 2014 versus an average of 31 in the preceding decade.
Almost 10 years ago JLT Specialty (JLT) released a bulletin examining how criticism of the FDA’s drug approval process prior to 2005 pushed the FDA to focus on the management of risk within their industry. This focus culminated in the creation of the Drug Safety Oversight Board and Guidance for Industry Development and Use of Risk Minimization Action Plans.
At the time we were of the opinion that approvals may decline due to additional risk mitigation information requested by the FDA. Whilst the approvals did drop as predicted it wasn’t necessarily due to the bureaucratic hurdles being put in place.
The additional safety requirements introduced in 2005 may have hampered approvals but in reality it was just the implementation of another layer of complexity in an organisation that, by the admission of previous FDA commissioner Dr. Andrew von Eschenbach, was already struggling with red tape. In 2012 he stated for the Wall Street Journal that “…patients…shouldn’t have to wait years while the FDA asks the company to complete laborious clinical trials proving efficacy. Instead, after proof of concept and safety testing, the product could be approved for marketing with every eligible patient entered in a registry so the company and the FDA can establish efficacy through postmarket studies1.”
It is also widely acknowledged that the pharmaceutical industry felt the impact of the most recent global economic turndown. This was not only from internal pressures of prioritising cash flow away from research and development, but volatility from external factors such as buyers who were facing unprecedented pressures on expenditure. The purpose of this bulletin is to examine why the pharmaceutical industry is now experiencing the latest upwards trend in approvals and what the impact on the product liability insurance market may be.
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For further information, please contact Adrian Donald, Head of Life Science and Specialty Chemicals on +44 (0)20 7528 4193 or email firstname.lastname@example.org