UK Eyes Success of US FDA Breakthrough Designation Program

Expedited review of drugs in UK would be a win for patients, even bigger win for investors

Jan 24, 2014 at 1:10PM

The UK may soon be following in the footsteps of the US FDA on establishing a breakthrough therapy designation for drug approvals to also streamline their regulatory process for drugs entering the market.

The UK is considering licensing drugs for marketing and making drugs available to patients within the National Health Service, Britain's national health care system, prior to official approval by European Medicines Agency (EMA), the European analog of the FDA . The goal of this "promising innovation medicine' designation would allow patients to access medications months ahead of waiting for the EMA, a gain that could be essential for patients with progressing diseases.

Since starting in July 2012, the FDA breakthrough designation program had approved 37 of 140 applications received. The designation is granted for drugs of serious or life-threatening conditions and is based on preclinical data (often just Phase I trials), and expedites the development and review of the drug such that the FDA works closely with the company to find the most efficient path to approval.

The three drugs with breakthrough designation thus approved by the FDA are Roche's (NASDAQOTH: RHHBY) Gazyva, Johnson & Johnson's (NYSE: JNJ) and Pharmacyclics (NASDAQ: PCYC) mantle cell lymphoma therapy Imbruvica, and Gilead's (NASDAQ: GILD) Sovaldi. While Roche's chronic lymphocytic leukemia treatment was the first to approval in November of 2013, Gilead's hepatitis C treatment Sovaldi (sofosbuvir) was likely the first projected blockbuster drug to be approved under the designation. In the case of Imbruvica, the breakthrough designation shaved as much as a year off of approval time, but projections as to actual time usually saved is more in the range of 1-3 months.

With 2013's approvals, several drugs already granted breakthrough designation awaiting approval and many applications for breakthrough therapies, the program has been largely a success. The FDA is at no loss of applications, and their rejection rate for breakthrough designation doubled in the latter part of last year.

Bottom Line
The months saved on approval time may have clinical significance, but the actual time saved is not particularly radical. Nonetheless, its effect for investors is much larger – for biotechs, this revamps commercial prospects and rebalances the risk inherent in R&D for drug approvals that take several years. As such, not only should pharmaceutical companies see a UK version of a breakthrough designation invigorate R&D, but also possibly reshape the topography of major partnerships among pharmaceutical companies – both for smaller companies trying to ride the experience of Pharma behemoths and for larger companies that no longer feel the need to aggregate to build value and dissipate costs of development. In the US, this has been particularly true in the development of new cancer drugs, with about 41% of breakthrough drugs for cancer indications, following by 31% for orphan diseases and 21% anti-infectives.

However, the difference between the FDA's designation and the UK's potential program is the existence of a national health care system such that the 'promising innovation medicine' designation will be linked to reimbursement through the Early Access to Medicines program. This will allow drugs to be fast-tracked through regulations and delivery in the NHS.

The UK has been discussing the promising innovation medicine designation and Early Access to Medicine program for some time. This most recent push was part of the Empower Access to Medicine Campaign meeting and Department of Health Minister Earl Howe's positive words in addition to the largely positive review from the US program inject optimism that the UK may not be far behind in their own program.

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Fool contributor Amy Ho has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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