Jul 22, 2020

FDA Approval Process, Pitfalls, & Keys to Success

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  • The Food and Drug Administration (FDA) evolved from the Bureau of Chemistry in 1906, championed by Harvey Washington Wily, with the mission of implementing quality standards for food products.
  • The authority of the FDA was poorly defined until the Shirley Act of 1912, which limited the FDA’s oversight to the safety of consumer products.
  • Historically, the court system has ruled in favor of the FDA and extended its reach to approving new drugs based upon their purported efficacy for a specific disease indication.
  • Filing of the Investigational New Drug (IND) and New Drug Applications (NDA) are the hallmarks of the modern clinical trial approval process.
  • The FDA is under constant reform with an average of 1 new act passed per year for the last 30 years.
  • The FDA approval process is rigorous and involves 3 distinct Phases after a promising drug candidate is identified during the basic Discovery and Development process (see Approval Process section below).
  • Phase 1 – 20 to 100 participants, studies last several months. Main objective is to determine the safety and effective dosing of the drug. Success rate is 70% (see Probability of Success by Clinical Trial Phase and Therapeutic Area table below).
  • Phase 2 – several hundred participants who show symptoms of the disease the drug is supposed to treat. Phase 2 studies can last months to years, depending on the disease being studied// the main purpose is to confirm the safety from Phase 1 and monitor the efficacy of the drug. Success rate is 30%.
  • Phase 3 is considered a “pivotal study” and involves 1,000 to 5,000 volunteers. Phase 3 studies can last up to 4 years and are designed to monitor the safety and efficacy of the drug over an extended time course. Success rate is 25-30%.
  • 2019 saw a record number of new drug approvals (59) by the FDA, and the probability of success moving from Phase 3 trials to approval increased substantially while the number of early-stage development projects declined in favor of more developed drugs.
  • Excluding anti-oncology drugs, the probability of successfully bringing a drug to market from Phase 1 clinical trials is 21%.
  • Clinical trials fail for several biologic and non-biologic reasons. These risks can be mitigated by clearly understanding the mechanism of action of the drug, the physiology of the disease being treated, and the hurdles in clinical trial design (see Why Do Clinical Trials Fail? section below).
  • The FDA has historically been under scrutiny, but the recent COVID-19 epidemic and Trump’s promise to curb drug pricing before the November 2020 election has renewed public interest in the Administration. There are conflicting theories that the FDA is incentivized to limit the number of approved drugs to avoid safety issues and negative public perception, and conversely approve as many drugs as possible to stay in the favor of Big Pharma.

In the beginning…

The origin of the FDA is rich and rife with twists and turns. Conceptually, it can be traced back to feudal Europe, where in 1202 King John of England declared English food law, the “Assize of Bread”, to preserve the integrity of the baking process and prohibit adulterants such as ground peas or beans [1]. Originally conceived as the Bureau of Chemistry (1862) by Abraham Lincoln, the organization’s prerogative was to establish food standards, ensure the purity of serums, vaccines, and treatments, and study food adulterants [2]. The Administration began to morph into its current form through the actions of  “Crusading Chemist” and Chief Chemist of the Bureau of Chemistry, Harvey Washington Wiley, who championed the 1906 Food and Drug Act and can be accredited with the Administration as it is known today. The mislabeling of consumer food and drug products and misinformation propagandized by meat and vegetable producers were illustrated in Upton Sinclair’s “The Jungle” (1906), capturing the nation’s attention and beaming the spotlight on the food and drug industry [3].

In its early years, the authority of the FDA was nebulous and poorly defined. It was not until the Shirley Act of 1912 did the US courts defined the reach of the Administration. Limited to oversight of the safety of new drug and consumer products, the Act of 1912 was the last time that the courts did not rule in favor the of the FDA. BY 1938 the FDA had the authority for “premarketing review of drugs” which established both the Investigational New Drug (IND) and New Drug Applications (NDA) for experimental treatments. The 1938 Act gave the FDA the authority over misbranded ingredients and false therapeutic claims. The FDA’s position was that the concept of drug safety is inherently a risk-benefit calculus since every new drug has side effects, therefore some consideration of efficacy is necessary to assess safety. However, the burden of proof on the FDA to refute the therapeutic claims, and all manufacturers had to do to circumvent scrutiny was claim the product was generally safe to bring it to market [4].  This all changed with the thalidomide debacle of 1962, during which pregnant women in Europe were given the substance as a sedative that resulted in severe birth defects in their unborn children. The FDA responded by banning interstate commerce of any new drug that was not subject of a NDA approved by the FDA, or without the FDA’s approval of an IND and review of efficacy merits on an indication-for-use basis (i.e. approval for each disease the drug was claimed to treat). Thus, the modern clinical trial process was born.

The 1980s saw a flurry of reforms aimed at bringing more drugs to market. The Regan/Bush administration reformed the FDA’s IND and NDA programs in 1982 and 1987 with the goal of expediting approval for treatment of life-threatening circumstances. Spurred by the AIDS epidemic, this period in US history was defined by many social, economic, and political changed in the USA. Fortunately, reform was not relegated to crisis response. An average of 1 new act per year has been passed to reform the FDA for the last 30 years, further delineating the FDA’s authority, and modernizing the standards by which they assess the safety, efficacy, and manufacturing of new drug products. The recent advent of “Big Data” has allowed the FDA to create large databases to study “real life” outcomes and yield further scientific and regulatory insight [5].

Traditionally, the FDA has been revered as the protector of public health and the adversary of unethical medicine. But that does not mean that it is beyond scrutiny. Congress (and the public) frequently flips between criticism of the FDA for granting approvals too quickly and then retracts and disapproves of delayed approval rates. In recent years, the public has been increasingly skeptical of the Administration as the complexity of the political relationships between other government agencies and the private sector grows. The FDA operates internally and in collaboration with the National Institutes of Health, the Department of Defense, the National Trade Commission, the Department of Health and Human Services, the Public Health Service, and the Center for Disease Control. Recently, hidden conflicts between the FDA’s review process and the unbiased opinions of the reviewers have come to light. Big Pharma has been providing kickbacks to FDA advisers after drug approval to incentivize approval of their drugs [10]. These payments are marked as “advisory” or “consultant” fees and can range from a few to hundreds of thousands of dollars [6]. It is clear that additional oversight is needed as the FDA’s sphere of influence continues to grow and leverage their ability to create or destroy economic windfalls for pharmaceutical companies.

The FDA Regulatory Process

Taming a daunting beast

To the pharmaceutical industry, the FDA is a powerful gatekeeper that can make or break their business. The value of public and private clinical-stage companies is wholly dependent on clinical trial data and the FDA’s final stamp of approval. The clinical trial success of an experiment drug asset determines how much capital the early-stage R&D companies can raise to pursue their drug development programs and push through the “valley of death” that has claimed the lives of many advanced-stage clinical drugs due to poor trial design and lack of funding (see Why Do Clinical Trials Fail? Section below).

The drug development process begins with Discovery and Development, during which researchers identify possible drug candidates by testing new compounds and biologics in “in vitro” models of their disease of interest. The in vitro models are often conducted in human cells, grown in a petri dish, that mimic the diseased state (e.g., cancerous cells) and are used to measure some sort of response to treatment of the drug (e.g., in a cancer cell model the researcher may measure the rate of cell growth before and after treatment with the drug to get a sense for how the drug affects tumor growth in the body). These experiments are very early stage and are simply used to identify possible drugs for later testing.

Once a good drug candidate is identified the Preclinical Research begins in animal models of the disease. These experiments are called “in vivo” (literally “in life”) and are conducted in a controlled environment under Good Laboratory Practices (a set of principles intended to assure the quality and integrity of non-clinical laboratory studies that are intended to support research or marketing permits for products regulated by government agencies). Researchers monitor how the animal responds to treatment of the drug at various doses. The main goal is to determine the safety of the drug before entering Phase 1 human trials and to get a sense of an effective dose (usually measured in milligrams of drug per kilogram of subject’s body weight).

The body of preclinical data (also called “IND-enabling”) is submitted to the FDA in an Investigational New Drug (IND) application. If the FDA believes that the drug is safe to give to people and has some therapeutic effect in animal models, then the Clinical Research begins:

  • Phase 1 – 20 to 100 participants, studies last several months. Main objective is to determine the safety and effective dosing of the drug. Success rate is 70% (see Probability of Success by Clinical Trial Phase and Therapeutic Area table below).
  • Phase 2 – several hundred participants who show symptoms of the disease the drug is supposed to treat. Phase 2 studies can last months to years, depending on the disease being studied. The main purpose is to confirm the safety from Phase 1 and monitor the efficacy of the drug. Success rate is 30%.
  • Phase 3 is considered a “pivotal study” and involves 1,000 to 5,000 volunteers. Phase 3 studies can last up to 4 years and are designed to monitor the safety and efficacy of the drug over an extended time course. Success rate is 25-30%.

The entire FDA approval process can last 6-7 years. Combined with the 3 to 6 years of Discovery and Development, the entire process of conceptualizing, researching, and bringing a drug to market can be up to 14 years. A promising Phase 3 study is followed the New Drug Application submission to the FDA for approval to sell in the market. The FDA also requires Post-Market Surveillance (sometimes called Phase 4) to follow-up on any safety issues (adverse effects) after the drug is on the market. Based on these results, the drug manufacturer may choose to change the formulation of the drug with new FDA approval.

Credit: Hough Ear Institute. Click to enlarge.

There are certain mechanisms by which drug developers can hasten the approval process:

  • Fast Track: this process is designed to speed up development and expedite the review of drugs that treat serious conditions and “fill an unmet medical need”.
  • Breakthrough Therapy: this process expedites drugs that are found to be substantially more effective for a certain condition than others on the market.
  • Accelerated Approval: this process is for drugs that fill an unmet medical need and have evidence of potential clinical benefit (although they don’t yet prove clinical benefit).
  • Priority Review: this designation means the FDA has a goal of making a decision on a drug application within six months.

Striking gold

No one in the industry will tell you that drug development is easy or that the approval process is smooth. It can take years to find out that your beloved drug candidate is a flop. However, each successive stage of clinical success “de-risks” the endeavor and makes approval more likely, increasing the valuation of the company and drug asset and bringing media attention to the development program. In 2019 there were 59 new approvals by the FDA (a new record). While chances the changes of successful commercialization for an experimental drug entering Phase 1 and 2 have not increased (slightly under 10%), recent drugs have been showing increased success in Phase 3 to approval (Figure 1a). The data also suggests that companies are more selective about the projects taken into early development, as evidenced by the decline in early-stage projects over the last decade (Figure 1b) [7].

Figure 1. Trends in clinical development [7]. a | Probability of launch from start of phases I, II and III for new active substances (defined as a chemical, biological, biotech or radiopharmaceutical substance that has not been previously available for therapeutic use in humans and is destined to be made available as a ‘prescription-only medicine’, to be used for the cure, alleviation, treatment, prevention or in vivo diagnosis of diseases in humans). The probability of transition from phase II to phase III is also shown. Source: CMR R&D Performance Metrics, applying the progression decision methodology (PDM), which assesses the fate of active substances exiting a phase within a specified year range (such as 2015–2017), and assigns a fate as ‘progressed’ or ‘terminated’ (active substances remaining in-phase are not considered within the PDM). These values can then be used to calculate a probability of success to market. Only new drug projects are included, and the number of projects (n) is >100 for each time point shown in each phase. b | Trends in new drugs entering development. Source: CMR, change in number of new active substances in early development (preclinical, phase I and phase II) and late development (phase III and submission) pipelines, 2009–2017.
Companies are also making good on their public aspirations to build ‘centres of excellence’ around their chosen franchises, with even the largest pharma companies sharpening their focus on particular therapeutic areas
~ Derek Lowe of Science of Translational Medicine [8]

The disease area that the clinical-stage drug is being developed against has a huge impact on the successful approval of a drug, with anti-infectives leading the way in almost every phase of development (see “Probability of Success by Clinical Trial Phase and Therapeutic Area” table below). Oncology studies heavily skew the approval statistics due to the complexity of the studies and high failure rate. Excluding anti-oncology drugs, the probability of successfully bringing a drug to market from Phase 1 clinical trials is 21%.

Why Do Clinical Trials Fail?

Pitfalls and keys to success

Four out of five clinical-stage drugs fail in trials. The potential culprits are many, and some are unavoidable, but risk can be reduced by proper planning and understanding key drug development principles. During the early phases of clinical development, the cause of failure could be biological and attributed to the lack of translatability between the in vivo animal model used to test the drug and the disease in humans. Drugs simply do not always respond the same way in animals and humans. This is a significant concern in many disease areas, but it is of especially concerning in immuno-oncology research where translatability between animal models is severely lacking. Clinical trials often fail when there is a lack of knowledge about the disease or mechanism of action of the drug. This often occurs with Orphan Diseases (Orphan Diseases are defined as affecting less than 200,000 people in the US). Lo et al. observed a lower success rate for orphan drugs compared to non-orphan indications (6.2% v. 13.8%, including oncology) [9]. Clinical trials also fail from a lack of understanding of how the drug functions in the body (pharmacodynamics) and how the body handles the drug (pharmacokinetics). These details can vary between humans, animals, and between one demographic group and another. Beyond these biologic factors, study design and practical implementation of study protocols can affect clinical trial success.

Non-biologic failures include:

  • Inadequate study design (does the study capture the effects we want to measure? For example, is the study long enough to capture slow tumor growth?)
  • Improper dose selection (is the dose high enough to clearly show benefit without causing side effects that will halt the trial early?)
  • Non-optimal assessment schedules (are we measuring the safety and effects of the drug frequently enough?)
  • Inappropriate efficacy metrics/endpoints (what are we measuring to determine whether the drug works or not, and are these measurements representative of the disease?)
  • Issues with data analysis (what type of analysis will we do to illustrate the differences between the treatment and placebo groups, and how will we report the statistical significance of the results?)

Clinical trial failures can be prevented by giving consideration to:

  • Exclusion and inclusion patient recruitment criteria
  • Number of participants to make the study highly powered (so that statistical significance can be determined)
  • Optimal dosing schedule based upon the pharmacokinetics (the way that the drug metabolizes and clears the drug from the body)
  • Possible food effects and drug interactions
  • Selecting the appropriate efficacy measures/endpoints
  • The best endpoints translate directly to clinical benefit (For example, the rate of tumor growth is a great measurement to determine the efficacy of an anti-tumor drug in curbing cancer progression)
  • Biomarkers can be used to quickly measure the effects of a drug (For example, a tumor growth biomarker circulating in the blood could be used to determine cancer progression with simple blood analysis)


Inherent bias?

Two factors have led to increased scrutiny of the FDA over the last year: (1) the COVID-19 epidemic and (2) Trump’s promise to curb drug pricing before the November 2020 election. Seemingly overnight the public’s attention turned toward the drug approval process as pharma frantically develops tests, vaccines, and treatments for the SARS-CoV-2 outbreak. Never before has Big Pharma and the FDA been responsible for educating the nation on such a vast scale, and that responsibility is immense as panic causes wild accusations. The difficulty in creating a vaccine has astounded some laymen who assumed that pharmaceutical companies could procure any treatment should they be economically incentivized to do so, and simply do not make every treatment available (and at low cost) in an attempt to control pricing pressure in the market. The Trump administration’s promise to lower drug prices has illuminated pharma’s pricing strategy in different nations and has brought about a sense of unfairness when Americans realized that they are paying a premium for drugs sold in poorer countries. While certainly intensified in recent months, criticism of the FDA is far from new.

The economist Milton Friedman has claimed that the FDA regulatory process is inherently biased against the approval of some effective drugs due to public perception (“observation bias”). The potential deleterious effects of an effective drug that was wrongfully banned are undetectable… while the consequences of mistakenly approving a harmful drug are obvious and publicized. To avoid condemnation from the public the FDA is incentivized to limit the number of drugs that come to market and be overly critical of potential safety issues that, for all intents and purposes, are trivial. This inherent bias influences the efficacy requirements of clinical trials as the Administration wants drug to hit the market with great success, validating the regulatory process and lauding the FDA. Unfortunately, proving efficacy of a clinical-stage drug is much more expensive and time-consuming than fulfilling the safety requirements. Stringent efficacy requirements greatly delay approval of new drugs which could have had a great impact if they were allowed to come to market (due to the non-biologic failures of clinical trials, described in the Why Do Clinical Trials Fail? section above). These immense hurdles make the cost of bringing a single drug to market almost $5B (taking into consideration all of the sunk costs for drugs that failed in clinical trials).

Conversely, an argument can be made that the FDA is incentivized to approve as many drugs as possible to stay in the good favor of the pharmaceutical industry. Dr. David Graham, associate director of the FDA's Office of Drug Safety, stated that "FDA is inherently biased in favor of the pharmaceutical industry. It views industry as its client, whose interests it must represent and advance. It views its primary mission as approving as many drugs it can, regardless of whether the drugs are safe or needed”. This bias in favor of Big Pharma can be quantified by the fees charged by the FDA to pharmaceutical firms (Prescription Drug User Fees Act) and the “consulting fees” paid by pharmaceutical companies to FDA reviewers after approval of their drugs. The Prescription Drug User Fees Act allows the FDA to charge enormous licensing fees to drug developers/manufacturers which has led to vastly increased prices for generics. Drug hikes over the last 10 years have been in excess of 1,000%, and it has been reported that 75% of the FDA generic drug oversight budget comes directly from private drug companies.

These alternative critical perspectives make the FDA seem like a shady organization, but in reality it is an evolving agency that needs constant updates to ensure checks and balances. It is clear that Big Pharma and lobbyists play a role in passing new legislation, just like in every other government agency that has the ability to influence the private sector. Increased public scrutiny is a positive and one of the founding principles of the American democratic state. One thing is for sure – the FDA will continue to overhaul its legislation in favor of the political and economic headwinds. As a member of the public we can do three things: watch, wait, and make our opinions heard.


[1] https://www.fda.gov/about-fda/fdas-evolving-regulatory-powers/milestones-us-food-and-drug-law-history

[2] https://www.fda.gov/about-fda/fdas-evolving-regulatory-powers/milestones-us-food-and-drug-law-history

[3] https://www.fda.gov/about-fda/history-fdas-fight-consumer-protection-and-public-health

[4] https://www.sciencedirect.com/science/article/pii/S0378595516303914

[5] https://www.qualitydigest.com/inside/fda-compliance-article/fda-milestones-021919.html

[6] https://www.sciencemag.org/news/2018/07/hidden-conflicts-pharma-payments-fda-advisers-after-drug-approvals-spark-ethical

[7] https://www.nature.com/articles/d41573-019-00074-z

[8] https://blogs.sciencemag.org/pipeline/archives/2019/05/09/the-latest-on-drug-failure-and-approval-rates

[9] https://academic.oup.com/biostatistics/article/20/2/273/4817524

[10] https://www.sciencemag.org/news/2018/07/hidden-conflicts-pharma-payments-fda-advisers-after-drug-approvals-spark-ethical


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