Article this AM on Bloomberg about FDA Approval Process
FDA Quickens Approval Process for Novel Treatments: Bull Case The FDA is giving drugs treating diseases with little or no options preferential treatment, as shown by its development of the Breakthrough Therapy designation. This lets the FDA expedite and streamline approval for new drugs. Dr. Janet Woodcock, head of the FDA's Center for Drug Evaluation and Research, highlighted this pathway at the Bloomberg Industries State of Health Care 2013 event.
U.S. drug demand has been relatively independent of pricing, with demand rising for higher-priced branded drugs even with the growing availability of generic equivalents. Price per unit has also increased, especially for drugs in difficult-to-treat diseases and areas of high unmet medical need. The Bull Case assumes drug demand will continue to increase independent of pricing.
A large portion of biotech revenue is derived from biologic agents, which require complex manufacturing processes, leading to varied safety and efficacy. The Bull Case assumes that the U.S. biosimilar pathway for approval will require high standards for bioequivalence, hampering the biosimilar commercial model and preserving branded biologic revenue.
With numerous blockbuster drugs losing patent protection, pharmaceutical companies have increased licensing, acquisitions and strategic partnerships with biotechnology companies. In the last decade, premiums paid on biotech-related deals averaged 42%. The Bull Case assumes that M&A will remain strong, as large pharmaceutical companies seek to offset lost revenue.