Many biotech company’s take a view that FDA approval will provide them with instantaneous market acceptance. As one veteran of the industry told us, “Historically, if you get FDA approval your sales will exponentially go through the roof”. As a result, for Biotech’s, getting the nod from the FDA was seen as carte blanche to writing a huge licensing deal. This now seems to be nothing more than a mirage.
Strong evidence is starting to emerge that FDA approval is no gaurantee of market acceptance at all. A recent Wall Street Journal article clearly articlates the challenges facing big pharma and biotech’s alike when gaining FDA approval. In addition to this, some recent work we have undertaken indicates that there is potentially a serious breakdown in trust between Big Pharma, the FDA and prescribers in the American market.
The outcomes of this are quite significant for Biotechs and their investors. Some of the findings would indicate that prescribers simply will not use a new therapeutic just because it has attained FDA approval. Clearly both Pharma and the FDA alike have been severely tainted by the recalls of drugs like Vioxx and the ongoing issues concerning GSK’s Avandia.
The Implications for Biotech’s hoping to cut a significant licensing deal is that ‘proof of technology’ is no longer enough. Just because the technology works is no gaurantee that Prescribers will switch to it once it has hit the market. As Pfizer found with Exubera, even the greatest technology can fail to win adopters in the form of either patients and prescribers.
The new challenge for biotech’s looking to license their technology becomes building a cogent case for why prescribers and patients will switch and how their technology provides a compelling reason for them to do so.
Build it and they will come has remained a field of dreams.
Michael R Johnson
2 responses so far ↓
1 David // Jul 3, 2008 at 3:38 pm
Interesting observation. No question of the importance that investors and analysts have placed on FDA approval in the past. Whether this continues becomes the key issue and what biotechs will do in response will be interesting. FDA approval is still good news though, just now a question of how good.
2 Paul // Aug 26, 2008 at 10:15 pm
As a policy maker and funder of clinical services, “FDA approval” no longer guarantees that an item/drug/device should be utilised, and nor should it. FDA approval is equivalent to TGA approval in Australia, meaning its safety and efficacy is proven, but its use in a population context/phase 3 scenario is yet to be tested. In the era of evidence based policy, practice and funding, FDA/TGA approval means little without clinical trial and real world data.
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