The Food and Drug Administration (FDA) approved 41 new medicines in 2014, the most since 1996, when the agency approved a record 53. FDA approved 27 in 2013. The jump can be attributed to many new drugs for orphan diseases, which are rare conditions and disorders that affect fewer than 200,000 people in the U.S.
The spike in approvals is notable for a number of reasons.
For one, the pharmaceutical industry as a whole has been bouncing back from a number of patent losses on big name products over the last couple of years—the so-called patent cliff. While a number of large companies indeed will face stiff generic competition, the 2014 new drug approval numbers shows that innovation has not slowed down.
Another thing that makes the spike in approvals somewhat surprising is the backlash the agency experienced earlier this year over its approval of Zohydro, a powerful pain medication. It was perhaps expected that the FDA would be overly restrictive to avoid a future uproar. In October, FDA responded to the criticism, defending its approval.
The 18-year high in drug approvals also reflects the pharmaceutical industry’s ongoing shift toward specialty drugs for niche conditions, which often come with extra exclusivity protections (7 years), streamlined approvals, and higher prices. With almost 40 percent of the new drugs for treating rare diseases, it is not unusual for annual costs per patient to reach more than $100,000, Reuters reports.
The American Pharmacists Association looked closely at the upswing in specialty drugs. “In 2012, specialty drug spend accounted for approximately $87 billion, or about 3.1% of national health spend in the United States,” APhA states. “In 2020, the forecasted specialty drug spend is expected to be $400 billion, or about 9.1% of national health spend.” Furthermore, analysts predict that 7 of the top 10 drugs in terms of sales will be specialty products. Looking ahead to 2015, the pipeline is again forecasted to have a high number of approvals in oncology, as well as immunology and rare diseases.
The APhA notes that the trend toward development of rare disease treatments is expected to continue growing.
As of 2013, more than 450 drugs were in various stages of development for rare diseases. Further evidence of the growth in rare disease drug development is shown by the fact that in 2010, of the top 100 drugs in the United States, 23 were for the treatment of diseases with 100,000 or fewer patients. In 2014, that number of rare disease drugs had increased to 41. Meanwhile, drugs targeting diseases with higher patient populations became less popular. In 2010, of the top 100 drugs, 55 treated diseases with 500,000 or more patients. By 2014, that total was reduced to 35 drugs.
While few would disagrees about the importance of developing therapies for rare conditions, the FDA has a unique perspective as the regulator. Two issues jump out from their standpoint.
First, for many rare disorders, trials have proved too small to gain FDA’s okay. A recent article in BioFlash describes the struggle in the context of Duchenne muscular dystrophy, a quickly worsening disease that affects young boys. Only 12 patients participated in the Phase 2b trial for a potential drug for the disease.
Second, when FDA deems a drug “orphan” companies do not have to pay “user fees” to apply for approval. With more drugs being given that designation, the FDA could face a financial shortfall. It will be important to follow FDA’s response. Robert Nelson, deputy director and senior pediatric ethicist at the FDA recently said: “If every disease is an orphan disease, the FDA goes bankrupt or else our taxes go up to pay for it.”
Across the Atlantic, the European Medicines Agency, which includes generic drugs in its list, also experienced an upswing. They recommended 82 new medicines last year, up from 79 in 2013, and 57 in 2012.
It will be interesting to follow the trends going forward in 2015, especially on the orphan drug side.