Drug development is one of the world’s most high-risk / high-reward industries, with the vast majority of drugs created never making it to market. Of those that do make it to market, they often do so only after the expenditure of hundreds of millions – or even billions – of dollars.
Development of a new small-molecule drug can cost over one billion dollars.
The drug approval process is stringent by necessity, because people need to be confident in the drugs they take, and because the financial and human consequences for putting a harmful drug onto the market can be catastrophic.
The traditional drug approval process happens through the 505(b)(1) pathway, and obtaining a drug patent is only the beginning. It requires the drug’s sponsor to conduct all studies and collect all data necessary to demonstrate a drug’s effectiveness and safety. Pursuing the traditional 505(b)(1) pathway to drug approval is expensive and drawn out, and that is by necessity. However, it is not the only pathway to drug approval.
505(b)(2) Is a Faster Approval Process
While the 505(b)(1) process can take as long as 15 years, the 505(b)(2) process can be completed in as little as 30 months, and at a far lower cost than the traditional approval process. The designation 505(b)(2), like 505(b)(1), refers to a section of the Food, Drug, and Cosmetics Act.
In 1984, the Hatch-Waxman Amendments to this act created the 505(b)(2) drug approval pathway, under which a drug must demonstrate safety and efficacy to the same standard as the traditional 505(b)(1) pathway. The difference is that under 505(b)(2), the drug sponsor may use existing data collected by others to meet some or all safety and efficacy requirements. It’s easy to see how this process would involve less time, cost, and risk than drug approval under 505(b)(1).
Use Cases for the 505(b)(2) Approval Process
While generic drugs are one use case for the 505(b)(2) process, there are several other, less obvious ones:
- Bioequivalence claims – where alternative drug formulations and new dosage strengths can be assessed on a basis of evidence of bioequivalence.
- Pediatric use – where the FDA must conclude that the disease course and effect of the drugs are sufficiently similar to allow extrapolation from adult data to pediatric patients.
- Modified release dosages – where drugs with modified release dosages are approved based on pharmacokinetic data clearly linking the new dosage form to immediate-release dosage forms.
- New dosage, regimens, or dosage forms – where approval can be based on the conclusion that a new dose, regimen, or dosage delivery form is effective based on existing pharmacokinetic data.
- New uses – for existing drug use in other disease phases, closely related diseases, or other populations based on a single clinical new use study combined with independent substantiation from related existing data.
The 505(b)(2) process can be used to bring new pediatric drugs to market in some cases.
Market Exclusivity Is Included with This Process
Under the 505(b)(2) approval process, approved drugs may be eligible for up to seven years of market exclusivity in the case of orphan drugs. Up to three years of market exclusivity are possible in other cases. These exclusivity periods may allow drug developers to recoup their development costs, potentially spurring new research efforts.
The 505(b)(1) process offers market exclusivity that usually varies from around 12 to around 16 years, during which time the products are free from competition from generics. The costs of bringing a new drug to market are often high enough that even that long period of exclusivity may not allow all R&D costs related to the new drug to be recouped.
505(b)(2) Represents an Efficient Use of Drug Development Funds
When the amendments were passed by Congress allowing the 505(b)(2) drug approval pathway, lawmakers hoped that by easing approval requirements for certain drugs they would increase the number of drugs available to patients. The 505(b)(2) process has become a reasonable alternative to spending on the development of new blockbuster drugs for many drug manufacturers. By allowing a shorter time-to-market and requiring a much smaller financial investment, the process is finding new applications in today’s drug development landscape.