Getting a new drug through the US Food and Drug Administration’s (FDA) approval process at first attempt is worth around US$639.2 million on average in additional revenues, an analysis by Parexel Consulting has found.

The estimate comes from a new white paper – Getting to Approval: Emerging FDA Review Outcome Trends for New Drugs – from Parexel Consulting, a business unit of US-based contract research organisation Parexel International.

The paper suggests the ability to obtain new product approvals is perhaps the most critical factor shaping the pharmaceutical industry’s future performance at a time when R&D costs continue to rise in relation to output and ‘safety first’ becomes the dominant principle in the US regulatory environment. The most pressing challenge for industry executives “has shifted from building the pipeline to executing the pipeline”, it comments.

The importance of achieving a first-cycle approval – the shortest distance between filing a New Drug Application (NDA) and launching the product, as Parexel Consulting puts it – is underlined by the decade-long downturn in submissions for new molecular entities (NMEs) in the US, the white paper notes.

After averaging 45+ per year in the mid-1990s, NME filings to the FDA dropped to 21 in 2006. Last year they recovered slightly to 28 submissions. The preliminary results of an FDA study on NMEs released in June indicated that the overall decline may reflect industry’s waning interest in seeking approval for less innovative NMEs, Parexel Consulting points out.

Cutting approval times

Regardless of causes, the implications of a first-cycle review for those NMEs that stay the course are “enormous”, the white paper says. For NMEs signed off by the FDA in 2007 and the first half of 2008, the approval times for compounds cleared in a single review cycle were less than one third those for NMEs requiring resubmissions (8.6 months versus 27.7 months).

The US$639.2 million average revenue gain from first-cycle approval was calculated on the basis of a 19.1-month mean approval gap for NMEs cleared in the first cycle during 2007 and H1 2008, versus those needing multiple review cycles. Parexel then applied to this formula projections by EvaluatePharma (May 2008) for fifth year post-launch sales of NMEs approved in the US during 2006 and 2007.

Somewhat surprisingly, in the current ‘safety first’ climate, there has been a recent increase in the percentage of US NDAs gaining first-cycle approvals, the white paper observes. In the fiscal year (FY) 2006 cohort (the latest to mature fully), the FDA’s Center for Drug Evaluation and Research set a record for the user-fee era of approving 51% of NDAs in the first review cycle.

At the same time, the prognosis for NDAs that fail to secure approval at first attempt is troubling. In FY 2007, for example, nearly a quarter of Class 1 NDA submissions – the less complex refilings in response to minor issues raised in the first-cycle review – failed to gain approval, “a notable increase from prior years”.

Even more worrying, Parexel Consulting notes, is that close to two-thirds of Class 2 NDA resubmissions – typically filed in response to more significant questions arising in the initial or previous review cycle – during FY2007 did not make it to approval, almost double the rate seen in the immediate preceding years.

Priority is crucial

The white paper also highlights how crucial priority review status – usually reserved for drugs with indications where there are no satisfactory alternatives or that offer significant improvements over what is already available – can be in terms of review times and associated revenue potential. “Increasingly, it appears that priority status is the on-ramp to life in the fast lane for new drugs pending FDA approval,” Parexel Consulting comments.

The FDA’s performance goals specify six months for taking action on priority NDAs, compared with 10 months for standard NDAs, the white paper notes. However, the implications of a priority rating are “far more significant” – for example, between 1 January 2006 and 30 June 2008, priority NMEs were cleared on average 13 months ahead of standard-rated NMEs.

Moreover, 94% of the priority NMEs approved in 2006, 2007 and the first half of 2008 were cleared in the first review cycle, while around one quarter of all standard NMEs approved over the same period needed three cycles to get through the process.

According to Parexel Consulting’s calculations, priority review status is worth nearly US$448.4 million for the average NME approved today, based on a 13.4-month mean approval lag between priority and standard NMEs cleared in H1 2008.

Unfortunately, though, emerging FDA data suggest that obtaining priority review status may be increasingly difficult, the white paper cautions. After granting priority ratings to 30% of the NDAs submitted in 2005, the agency has done so for only 18% of applications filed in FY 2007 and up to 31 March 2008.