The U.S. Food and Drug Administration and New Drug Approvals: A Safety vs. Innovation Paradox?

Abstract

The US Food and Drug Administration (FDA), founded in 1906, is an agency of the US Department of Health and Human Services, an executive department of the United States Government and responsible for regulating and supervising prescription and over-the-counter drugs, vaccines, and biopharmaceuticals. The FDAs Center for Drug Evaluation and Research is responsible for approving three types of ethical drugs: new drugs ('new drug applications' or 'biologics licensing applications'), generic drugs and over-the-counter drugs. A drug that is approved by the FDA is deemed 'safe and effective when used as directed'. While the FDA deserves greater scrutiny of its drug regulatory review process (amended under the FDA Modernization Act of 1997) as it pertains to the approval of drugs for gravely ill patients, criticism of the agency's overall safety record has less to do with the reduction of approvals of new drugs over the last decade than an evolution in the pharmaceutical industry business model, one based on a different allocation of R&D financial investment in drug product development portfolios. From an innovation strategy vantage point, many pharmaceutical companies are now re-focusing R&D efforts on commercial capabilities, thus recognizing that incremental innovation, in the form of drug reformulations, or new drug indications, in the form of repurposed drugs, strategically complements the occasionally successful 'blockbuster' drug.