OUP accepted manuscript

Unveiling the impacts of FDA Breakthrough Therapy Designation: a dual-perspective examination of economic and developmental outcomes for biotechnology companies

Biotechnology and small pharma companies must recognize the opportunity presented by FDA Breakthrough Therapy Designation (BTD) to expedite drug development for serious conditions. This paper evaluates BTD economic and developmental impacts on such companies. Analysis of 29 BTD events from 2017 to 2022 revealed immediate share price boosts and improved drug approval rates, alongside faster development times. Yet, long-term share prices underperformed relative to the broader market, underscoring the persistent risks in pharma investments. Although offering new insights, the limited sample size calls for further investigation.

Clinical benefit, development, innovation, trials, epidemiology, and price for cancer drugs and indications with multiple special FDA designations

BACKGROUND

This study analyzes the development, US Food and Drug Administration (FDA) approval, benefits, innovation, trials, epidemiology, and price of cancer drugs with multiple special designations: orphan, fast track, accelerated approval, priority review, and breakthrough therapy.

METHODS

In total, 355 FDA-approved cancer drug indications with 841 special designations were identified (2012-2022). Trial, epidemiology, and price data were collected from FDA labels, the Global Burden of Disease study, and Medicare and Medicaid. The association between efficacy outcomes and indications' number of special designations were compared in meta-analyses.

RESULTS

Median development times were 7.3, 7.8, and 5.4 months (P = .027) for drugs with 0 to 1, 2 to 3, and 4 to 5 special designations, respectively. Multiple special designations were associated with higher biotechnological and clinical innovation. Median patient enrollment in trials were 615, 471, 398, 168, 104, and 120 (P < .001) for indications with 0 to 5 special designations. Drugs for rare diseases supported by open-label phase 1/2 trials of single-arm design were granted more special designations. Hazard ratios for overall survival (0.80 vs 0.73 vs 0.73 vs 0.69 vs 0.56 vs 0.52; P = .003) and progression-free survival (0.70 vs 0.61 vs 0.59 vs 0.44 vs 0.37 vs 0.67; P < .001) substantially declined while tumor response increased with more special designations. Mean monthly prices increased for drugs with 0 to 4 but not 5 special designations ($21 596 vs $14 753 vs $32 410 vs $41 240 vs $38 703 vs $19 184).

CONCLUSIONS

Multiple special designations are associated with faster clinical development and greater benefits for patients with unmet needs but also with nonrobust trial evidence and a tendency toward higher drug prices.

Special FDA designations for drug development: orphan, fast track, accelerated approval, priority review, and breakthrough therapy

BACKGROUND

Over the past decades, US Congress enabled the US Food and Drug Administration (FDA) to facilitate and expedite drug development for serious conditions filling unmet medical needs with five special designations and review pathways: orphan, fast track, accelerated approval, priority review, and breakthrough therapy.

OBJECTIVES

This study reviews the FDA's five special designations for drug development regarding their safety, efficacy/clinical benefit, clinical trials, innovation, economic incentives, development timelines, and price.

METHODS

We conducted a keyword search to identify studies analyzing the impact of the FDA's special designations (orphan, fast track, accelerated approval, priority review, and breakthrough therapy) on the safety, efficacy/clinical benefit, trials, innovativeness, economic incentives, development times, and pricing of new drugs. Results were summarized in a narrative overview.

RESULTS

Expedited approval reduces new drugs' time to market. However, faster drug development and regulatory review are associated with more unrecognized adverse events and post-marketing safety revisions. Clinical trials supporting special FDA approvals frequently use small, non-randomized, open-label designs. Required post-approval trials to monitor unknown adverse events are often delayed or not even initiated. Evidence suggests that drugs approved under special review pathways, marketed as "breakthroughs", are more innovative and deliver a higher clinical benefit than those receiving standard FDA approval. Special designations are an economically viable strategy for investors and pharmaceutical companies to develop drugs for rare diseases with unmet medical needs, due to financial incentives, expedited development timelines, higher clinical trial success rates, alongside greater prices. Nonetheless, patients, physicians, and insurers are concerned about spending money on drugs without a proven benefit or even on drugs that turn out to be ineffective. While European countries established performance- and financial-based managed entry agreements to account for this uncertainty in clinical trial evidence and cost-effectiveness, the pricing and reimbursement of these drugs remain largely unregulated in the US.

CONCLUSION

Special FDA designations shorten clinical development and FDA approval times for new drugs treating rare and severe diseases with unmet medical needs. Special-designated drugs offer a greater clinical benefit to patients. However, physicians, patients, and insurers must be aware that special-designated drugs are often approved based on non-robust trials, associated with more unrecognized side effects, and sold for higher prices.

Review of the impact of the FDA's Fast Track Designation on biotechnology companies' share prices

This study examines the effect of the FDA's Fast Track Designation (FTD) on biotech company share prices. Using an event-study approach on 25 FTD announcements between June 2019 and June 2020, notable short- and long-term share price hikes were observed, with a 5-day cumulative average abnormal returns of 21.59%, 30-day at 38.34%, 1-year at 76.64% and 3-year at 111.37% against the XBI benchmark. These surges surpass prior research findings, indicating stronger investor reactions. The role of the COVID-19 pandemic as a confounder is discussed. Although the sample size is limited, the results offer valuable insights for investors and small pharma firms. Further research is recommended to delve into the driving market factors.

Pharmacists' Knowledge and Perceptions of FDA Approval Standards and the Breakthrough Therapy Designation

The “breakthrough therapy” designation (BTD) is a recent mechanism implemented by the United States Food and Drug Administration (FDA) to expedite access to drugs that address unmet needs. The purpose of this study is to describe pharmacists’ knowledge of FDA drug-approval standards and knowledge and perceptions of the BTD. Pharmacists engaged in advanced clinical practice were identified through membership profiles of a professional pharmacy organization. Eligible participants were then sent a questionnaire to assess knowledge of FDA approval standards and the BTD. A total of 226 pharmacists responded. The majority of respondents were women (70.2%) and had completed post-graduate training (85.8%). Over half correctly answered at least two of three questions on FDA approval standards (58.1%) and the BTD (78.1%). Only 24.1% of respondents identified as being familiar with the BTD. The majority of pharmacists (62.8%) were certain that FDA-approved “breakthrough” drugs represented a major advance over currently approved therapies and most (88.5%) preferred the drug designated as “breakthrough” in a hypothetical scenario. In conclusion, pharmacists were able to correctly answer questions about FDA approval standards and the BTD. However, they were unfamiliar with the implications of a BTD and may overestimate the benefit demonstrated by these drugs. Future research should identify knowledge gaps in pharmacist understanding of regulatory mechanisms designed to expedite drug approval.