Impact on Investment
“The individual bills will have an impact, but I tell you, it’s going to be slow,” Robert More, general partner with Frazier Healthcare, told GEN. “What industry is really looking for is a clarity of understanding; let’s set the hurdles, but let’s not move the goalposts all the time.”
Richard (Erik) M. Gordon, clinical assistant professor at the University of Michigan’s Stephen M. Ross School of Business, doesn’t think the bills will irrigate the long-discussed “valley of death” since the legislation will affect later phases of development.
“TREAT and FAST come into play later on, somewhere in Phase IIb and Phase III, where you’re really doing your pivotal trials to nail down the evidence that you need to make the demonstration of safety and efficacy. What these acts would do is allow you to do that more quickly and at less expense under particular circumstances,” Gordon pointed out.
“We’re not jumping up and down and saying, ‘This will get us through the valley of death.’ However, if it compresses the time and money that our portfolio companies are spending in Phases IIb and III, we’re always in favor of that,” added Gordon, who is also managing director of the Wolverine Venture Fund. “For some companies, it will require less overall investment.”
As Gordon rightly acknowledges, startups that cannot get through the valley of death can’t progress to the costlier Phases IIb or III. That leap in costs is much steeper for biologics than small molecules.
The current TREAT Act differs from a draft made public last year. That version would have allowed the review of new drugs under two new FDA approval pathways—progressive or exceptional—if they provided meaningful advances in the treatment of serious or life-threatening conditions or if they addressed an unmet medical need. Drugs undergoing these accelerated reviews would be cleared based on efficacy results from biomarker tests, early-stage clinical trial results, as well as interim data.
Biotechs endorsed the original TREAT but pharma giants were mostly opposed. “The original idea that we proposed at BIO was to recommend a new track for drug approval that would speed approvals while not compromising safety,” Ron Cohen, CEO of Acorda Therapeutics told GEN.
“However, several of the PhRMA companies disagreed with this approach, fearing that a new pathway nevertheless might be interpreted as reducing safety standards. We at BIO did not believe that this was at all the case, but as the perception was there, we ultimately felt it would be more effective to expand the use of the existing ‘accelerated approval’ pathway that has been used for years at FDA to approve many HIV and oncology drugs.”
Which pathway is used matters less than the fact that the aim of all the bills is the creation of an accelerated pathway along the lines of the successful fast-track approach that has helped bring orphan drugs to market in recent years. Yet a faster track to drug approvals cannot instantly circumvent market forces that have been created over decades. In the end, drug developers will have to develop treatments that can withstand the heightened risk-benefit analysis of recent years and, finally, market the products effectively.