The signaling effects of incremental information: Evidence from stacked US Food and Drug Administration designations

Miller, Kathleen L.; Nardinelli, Clark; Pink, George H.; Reiter, Kristin L.

doi:10.1016/j.qref.2017.07.005

Cited by 2 publications

(1 citation statement)

References 33 publications

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“…As a result, drugs with a fast track designation may be able to demand higher prices before surpassing a country's WTP threshold. The expedited development timelines alongside higher health benefits are valued by investors, as several event studies find companies with fast track designated treatments yield excess returns [78][79][80][81]. Yet, these excess returns seem to have diminished over time [80].…”

Section: Fast Trackmentioning

confidence: 99%

Special FDA designations for drug development: orphan, fast track, accelerated approval, priority review, and breakthrough therapy

Michaeli,

Albers

et al. 2023

Eur J Health Econ

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Background Over the past decades, US Congress enabled the US Food and Drug Administration (FDA) to facilitate and expedite drug development for serious conditions filling unmet medical needs with five special designations and review pathways: orphan, fast track, accelerated approval, priority review, and breakthrough therapy. Objectives This study reviews the FDA’s five special designations for drug development regarding their safety, efficacy/clinical benefit, clinical trials, innovation, economic incentives, development timelines, and price. Methods We conducted a keyword search to identify studies analyzing the impact of the FDA's special designations (orphan, fast track, accelerated approval, priority review, and breakthrough therapy) on the safety, efficacy/clinical benefit, trials, innovativeness, economic incentives, development times, and pricing of new drugs. Results were summarized in a narrative overview. Results Expedited approval reduces new drugs’ time to market. However, faster drug development and regulatory review are associated with more unrecognized adverse events and post-marketing safety revisions. Clinical trials supporting special FDA approvals frequently use small, non-randomized, open-label designs. Required post-approval trials to monitor unknown adverse events are often delayed or not even initiated. Evidence suggests that drugs approved under special review pathways, marketed as “breakthroughs”, are more innovative and deliver a higher clinical benefit than those receiving standard FDA approval. Special designations are an economically viable strategy for investors and pharmaceutical companies to develop drugs for rare diseases with unmet medical needs, due to financial incentives, expedited development timelines, higher clinical trial success rates, alongside greater prices. Nonetheless, patients, physicians, and insurers are concerned about spending money on drugs without a proven benefit or even on drugs that turn out to be ineffective. While European countries established performance- and financial-based managed entry agreements to account for this uncertainty in clinical trial evidence and cost-effectiveness, the pricing and reimbursement of these drugs remain largely unregulated in the US. Conclusion Special FDA designations shorten clinical development and FDA approval times for new drugs treating rare and severe diseases with unmet medical needs. Special-designated drugs offer a greater clinical benefit to patients. However, physicians, patients, and insurers must be aware that special-designated drugs are often approved based on non-robust trials, associated with more unrecognized side effects, and sold for higher prices.

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Section: Fast Trackmentioning

confidence: 99%

Special FDA designations for drug development: orphan, fast track, accelerated approval, priority review, and breakthrough therapy

Michaeli,

Albers

et al. 2023

Eur J Health Econ

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Clinical benefit, development, innovation, trials, epidemiology, and price for cancer drugs and indications with multiple special FDA designations

Michaeli,

Albers

et al. 2023

JNCI: Journal of the National Cancer Institute

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Background This study analyzes the development, US Food and Drug Administration (FDA) approval, benefits, innovativeness, trials, epidemiology, and price of cancer drugs with multiple special designations: orphan, fast track, accelerated approval, priority review, breakthrough therapy. Methods 355 FDA-approved cancer drug indications with 841 special designations were identified (2012-2022). Trial, epidemiology, and price data were collected from FDA labels, Global Burden of Disease Study, and Medicare and Medicaid. The association between efficacy outcomes and indications’ number of special designations were compared in meta-analyses. Results Median development times were 7.3, 7.8, and 5.4 months (p = 0.027) for drugs with 0-1, 2-3, and 4-5 special designations, respectively. Multiple special designations were associated with a higher biotechnological and clinical innovativeness. Median patient enrolment in trials was 615, 471, 398, 168, 104, and 120 (p < 0.001) for indications with 0-5 special designations. Drugs for rare diseases supported by open-label phase 1/2 trials of single-arm design were granted more special designations. Hazard ratios for overall survival (0.80 vs 0.73 vs 0.73 vs 0.69 vs 0.56 vs 0.52, p = 0.003) and progression-free survival (0.70 vs 0.61 vs 0.59 vs 0.44 vs 0.37 vs 0.67, p < 0.001) substantially declined, whilst tumor response increased with more special designations. Mean monthly prices increased for drugs with 0-4, yet not 5, special designations ($21596 vs $14753 vs $32410 vs $41240 vs $38703 vs $19184). Conclusions Multiple special designations are associated with faster clinical development and greater benefits for patients with unmet needs; yet, also with non-robust trial evidence and a tendency for higher drug prices.

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The signaling effects of incremental information: Evidence from stacked US Food and Drug Administration designations

Cited by 2 publications

References 33 publications

Special FDA designations for drug development: orphan, fast track, accelerated approval, priority review, and breakthrough therapy

Special FDA designations for drug development: orphan, fast track, accelerated approval, priority review, and breakthrough therapy

Clinical benefit, development, innovation, trials, epidemiology, and price for cancer drugs and indications with multiple special FDA designations

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