Early Entrant Protection in Approval Regulation: Theory and Evidence from FDA Drug Review

Innovation under regulatory uncertainty: Evidence from medical technology

“…(2010) define “entry order” as the order in which a drug within a given disease group submits an application for FDA approval. In exercises presented in Appendix D and Appendix Tables II and III, I replicate Carpenter et. al.…”

Analysis of Labeling Decisions Regarding Therapeutic Indications During New Drug Application Reviews in Japan

“…One plausible explanation for these behaviors is that economic interests might induce companies to propose overly ambitious indications with broader target populations than regulators would comfortably agree with, leading to MLUs during the NDA review. Regarding the differences in regulatory decisions between the first entrant drugs and the followers, regulatory stringency for later entrants into the market was also confirmed in the context of NDA review in United States; the first drug arrivals to any market encounter the shortest approval times from a gatekeeping regulator 6 , 7 …”

“…From the point of view of the industry, economic incentives may hold sway in competitive market situations and appear as strategically “inflated” indication proposals aimed at maximizing financial returns from the NMEs. Regulators try to evaluate the proposed indications of later entrants into the market in a stringent manner, as has been suggested in previous research 6 , 7 . These incentives for both players may work more overtly in the universal health‐insurance system in Japan.…”

“…Regarding the differences in regulatory decisions between the first entrant drugs and the followers, regulatory stringency for later entrants into the market was also confirmed in the context of NDA review in United States; the first drug arrivals to any market encounter the shortest approval times from a gatekeeping regulator. 6,7 Because "Expected peak sales" was significantly associated with limiting of the proposed indications, we further evaluated the marginal effect of "Estimated peak sales in Japan" on the probabilities of the three types of modifications, i.e., MLU, "No change, " and MEU (Figure 1). Although the variable was clearly associated with elevated probabilities of MLU in the four Figure 1, the magnitude of the marginal effects of "Estimated peak sales in Japan" varied depending on the therapeutic category, especially with respect to antiviral drugs and antibiotics.…”

“…Regulators try to evaluate the proposed indications of later entrants into the market in a stringent manner, as has been suggested in previous research. 6,7 These incentives for both players may work more overtly in the universal health-insurance system in Japan. When optimizing the indications for NMEs during the NDA review process, both applicants and reviewers should, ideally, consider these backgrounds and possible mechanisms behind that have an impact on labeling modifications and avoid unnecessary inefficiencies that could potentially result from strategyoriented behaviors on both sides.…”