Counting the annual tally of drug approvals by the US Food and Drug Administration (FDA) consistently understates the true value of industry R&D productivity, argues research company EvaluatePharma.

For one thing, EvaluatePharma says, most FDA approval counts only look at those products cleared by the agency’s Center for Drug Evaluation and Research (CDER).

This meant that in 2010 they ignored two products expected by analysts to be far away the most commercially successful of last year’s approval crop: Dendreon’s prostate cancer vaccine, Provenge, and Pfizer’s pneumococcal vaccine, Prevnar 13.

These products were signed off by the FDA’s Center for Biologics Evaluation and Research (CBER), as were three other products that did not generally make the approval counts for 2010, EvaluatePharma points out.

The Pharmaceutical Research and Manufacturers of America does include CBER products in its annual review of US approvals, but “this tends to be published well after the initial surge of press and analyst reports early every year which draw mostly on CDER numbers only”, the researchers add.

Factoring in BLA approvals would mean a total of 26 products were cleared by the FDA in 2010, rather than the 21 generally reported. These comprised 15 new molecular entities and six biologics approved by the CDER as well as the five biologics approved by the CBER.

More important

“With such intense scrutiny of pharmaceutical productivity at the moment, FDA approval rates are an important number to get right,” commented Dr Jonathan de Pass, chief executive of EvaluatePharma.

“Approvals by CBER are only going to become more important in the future, with advances in areas like gene therapy and the significant investment going into improved haemophilia therapies, for example.”

What adding in CBER products does not change significantly is the trend in FDA approval rates, and notably the marked decline in approvals between 2009 and 2010.

So omitting the CBER quotient gives a total of 21 US approvals last year, 25 in 2009, 24 in 2008 and 18 in 2007. With the CBER biologics approvals, the numbers are 26 in 2010, 34 in 2009, 31 in 2008 and 26 in 2007.

Leaving out CBER clearances means that annual approval rates are widely under-reported by around 20%, EvaluatePharma says. Yet the much-discussed decline in R&D productivity on a year-to-year basis is still evident.

Quality not just quantity

The researchers further argue, however, that assessments of R&D productivity should focus on quality as well as quantity of approvals. Although the 26 new products cleared by the FDA in 2010 was the lowest rate in the last ten years, the potential value of these products is a significant improvement on 2009, they note.

Based on estimates of cumulative US sales five years after approval, “the class of 2010 look set to become the best on record since the stellar graduates of 2004”, with combined fifth-year sales of US$11.6 billion versus US$6.4 billion for drugs and biologics approved in 2009, EvaluatePharma points out.

Moreover, the improvement in quality should continue this year, with 28 novel agents expected to gain FDA approval, generating potential five-year US sales of US$12.9 billion, it predicts.

On the same basis, and underlining the importance of taking quality into account, a comparison of 2002 with 2003 shows that the number of new products approved by the FDA rose significantly from 26 to 35, yet the value added by these products five years post-approval fell by more than a quarter, from US$12.7 billion to US$9.1 billion. .

Conversely, in 2004 the number of approvals was not much higher than in the previous year (38 versus 35) but the value of these products surged by 63% to $14.8 billion, including blockbusters such as Avastin, Spiriva and Lyrica.

The EvaluatePharma analysis also highlights the importance of factoring novel biologics into broader assessments of R&D productivity. Of the US$36.6 billion in US sales added by new FDA-approved products over the last five years, $7.5 billion, or 20%, came from novel biologics signed off by the CBER, it notes.