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It now costs an average of £2 billion to develop a new drug, an increase from $1.2 billion in 2010. Despite the reasons for this, it is evident that firms currently have fewer incentives to innovate.

It is coming up to a year since Scott Gottlieb was appointed the head of the Food and Drug Administration (FDA). It’s been a busy one, that’s seen the launch of the process of lowering nicotine levels in cigarettes, approved self-testing kits for breast-cancer genes and an increased approval of new medicines, including a record number of copycat drugs. 

However, there is one thing that hasn’t received a lot of attention, and that’s regulating, writes The Economist. New rules were reportedly at a 20-year low in 2017. In a bid to rectify this, the FDA is planning on providing more guidance to industry, which Gottlieb hopes will help pharmaceutical firms in America develop drugs more efficiently. 

It now costs an average of £2 billion to develop a new drug, an increase from $1.2 billion in 2010. Despite the reasons for this, it is evident that firms currently have fewer incentives to innovate. 

Gottlieb has come forward with a few ways to change this. The first involves asking the agency to rethink how much information the FDA demands at an early stage. For example, with better models of a drug’s toxicity, it could be tested in animals later in the process rather than at the outset. 

The second idea is to extend to other areas of the innovative trial design that the FDA has pioneered in recent years for cancer drugs. This could mean breaking away from the traditional hard boundaries of the drug testing process. But, it is worth mentioning that trials constantly adapt by expanding and shrinking cohorts of patients depending on their response to treatment. As a result, this makes the process more efficient, and the agency is open to the inclusion of non-trial data. 

With the recent news that some cancer drugs don’t need to show that they extend overall survival, rather than just prolong a patients life without the cancer getting worse, Gottlieb has another plan for Alzheimer’s. 

It’s no secret that dementia is a growing area of concern as the population ages, and there have been a number of costly failures when attempting to deal with the disease. Since 2003, more than 200 compounds for dementia have entered phase-2 clinical trials, and none have yet passed the final phase 3 trial by showing that it can slow cognitive decline and preserve the ability to perform everyday functions. 

In an attempt to counter this trend, the FDA is controversially deciding whether to approve dementia drugs based on their effect on biomarkers: signatures of genes or proteins that imply the presence and severity of a disease. It could potentially be worth the risk if overall better medicines are able to reach patients. Pharma companies have welcomed Gottlieb’s ideas with “almost uniform pleasure and happiness”, noted John Maraganore, boss of biotech company Alnylam, who also chairs industry group, BIO. 

This attitude is expected, especially since lower development costs mean higher returns. However, it is less clear how much these savings will help the industry’s giants, whose research and development efforts are stretched across a number of fields, without any deeper changes to their business models. 

Even though right now it remains to be seen if Gottlieb’s approach can improve efficiency and innovation across the industry, his tenure may well be judged a success if he manages to slow their decline. But for now, the rest is up to the industry.