American Journal of Law & Medicine

The FDA's accelerated approval process: does the pharmaceutical industry have adequate incentives for self-regulation?


Prompted by criticisms of long delays in its drug approval processes, the Food and Drug Administration (FDA or the Administration) took a number of measures in recent years to expedite access and increase availability of new drugs for terminally ill patients.(1) These reforms began in the late 1980s,(2) as acquired immune deficiency syndrome (AIDS) advocacy organizations openly criticized the FDA, noting that its policies were insufficient to address the prevalence of AIDS and the lag time for FDA approval of new AIDS treatments.(3) The FDA's primary responsibility is to promote efficacy and ensure safety of new drugs.(4) Consequently, the FDA must balance patients' desires to obtain new medications to treat serious and life-threatening illnesses against government's desires to protect patients from abuses of the new drug approval process.(5) The structure of the FDA's regulatory procedures is, therefore, essential to providing safe, effective medical treatments to patients.(6) FDA regulations and guidelines set forth standards and practices that pharmaceutical companies must follow to gain approval of newly developed drugs.(7)

The FDA has significantly accelerated its approval process for new drugs through a series of regulations that provide incentives to pharmaceutical companies to develop new drugs more rapidly and to expand clinical trials to allow more patients to receive potentially life-saving treatments.(8) However, as might be expected with such sweeping and rapid reforms, the FDA's accelerated approval policies have been widely criticized.(9) While some have praised the FDA's efforts and have suggested that its privatization and other deregulatory efforts continue, others have called for the FDA to return to its more conservative policies of the past.(10) Ironically, some of the same AIDS advocacy organizations that supported the FDA's initial reform efforts are now calling for reevaluation of the accelerated approval process.(11)

Expanded concerns about the FDA's accelerated approval process have prompted several proposals that would potentially improve the drug approval process.(12) Considering factors that might deter pharmaceutical companies from abusing FDA policies is important when evaluating potential reforms. Specifically, this Note argues that the pharmaceutical industry has strong incentives to self-regulate, and therefore, the current extent of FDA regulation is sufficient to ensure consumer safety.

This Note examines the FDA's accelerated approval process, which potentially allows the greatest numbers of patients to receive accelerated approval drugs that may have limited safety and efficacy.(13) Safety concerns over the accelerated approval process primarily stem from the fact that new pharmaceuticals are released well before traditional FDA clinical testing requirements would allow.(14) Part II of this Note provides a brief historical overview of the FDA's accelerated approval process and comment k(15) immunity from strict liability for unavoidably unsafe drugs. Part III examines some recent controversies surrounding the accelerated approval process and provides responses to these criticisms. Part III also discusses legal concerns surrounding comment k immunity for unavoidably unsafe drugs and comment k's effects on pharmaceutical companies' use of the accelerated approval process. Additionally, Part III examines the business incentives that pharmaceutical companies have for self-regulation, as well as recent proposals for FDA privatization and incentive-based structures, which would significantly alter the FDA's current accelerated approval process. Finally, Part III focuses on the FDA's reasons for strictly monitoring the approval process, primarily noting potential political concerns for the FDA if the accelerated approval process is abused. Part IV focuses on recommendations and briefly discusses proposed changes in the current regulation that may help alleviate fears that the accelerated approval process will be abused.

This Note argues that the current limits on the scope of illnesses and drugs covered by the accelerated approval process should remain in place for the foreseeable future to ensure adequate consumer protection. The Note concludes that the FDA's goals should be to maximize efficacy and safety under the current policy, whether by further articulating its goals or increasing enforcement of current policies. Reevaluation is necessary to ensure that regulations maximizing safety are in place, but privatizing or completely revamping the accelerated approval process is premature. Presently, pharmaceutical companies' incentives are sufficient to deter abuse of the accelerated approval process, and further FDA regulation is not required to control pharmaceutical companies' behavior.



The issue of how best to regulate the safety of pharmaceuticals has been of significant congressional concern since the 1930s.(16) In 1938, Congress enacted the Federal Food, Drug, and Cosmetic Act (FDCA),(17) which led to the establishment of the FDA.(18) The FDCA provided the FDA with authority to promulgate binding regulations and to control the flow of drugs into commerce.(19) The Kefauver-Harris Amendments,(20) adopted in 1962, imposed additional requirements on pharmaceutical companies to show both safety and efficacy of new drugs.(21) Although the goal of the Kefauver-Harris Amendments, according to Congress, was to promote public safety, the amendments also significantly increased the time required to bring new drugs to the consumer market.(22) This increased time to market (or lag time) has been one of the major factors prompting AIDS activists' complaints.(23) In response to activist pressures, the FDA began reducing regulatory restraints in 1987.(24)


1. The FDA's Goal of Expanding Access and Availability to New Drugs: Investigational New Drugs and Parallel Track Approvals

a. Investigational New Drugs and Establishment of the Parallel Track

In 1987, the FDA issued the first of its new rules, the investigational new drug (IND) exemption, which allows for broader patient use of new drugs prior to final FDA approval.(25) Generally, INDs are issued for Phase 2 or 3 clinically tested drugs.(26) Additionally, to receive an IND exemption, a drug must be used for a new treatment indication and/or the drug must be a safer or better alternative to treatments currently available for terminal or serious illnesses.(27) The drug's sponsor must continue to pursue actively FDA approval.(28) In 1992, following relatively successful IND approvals, the FDA implemented a new expansion policy: the parallel track policy.(29)

b. The Parallel Track Policy

The parallel track policy specifically applies to human immunodeficiency virus and AIDS treatments.(30) A parallel track application is filed as an amendment to the IND request.(31) A parallel track application allows clinical testing of INDs on patients who cannot participate in currently operational clinical trials, cannot tolerate available drugs or for whom the available drugs are ineffective.(32) Normal clinical trials continue while the IND is distributed to patients.(33) The parallel track policy requirements are similar to IND requirements; however, the parallel track expands the market to which INDs are available.(34) Although the parallel track policy increased availability of INDs, the FDA faced continued pressure to decrease the lag time for new drug approvals.(35) In response, the FDA implemented a plan relaxing its regulatory requirements further.(36)

2. The Continued Expansion: Accelerated Approval Exemption

In 1992, the FDA issued its broadest regulatory policy, allowing for accelerated approval of new drugs for treating serious or life-threatening illnesses.(37) Generally, the accelerated approval process is based on limited, preliminary information indicating that the drug is safe and may be effective.(38) On such a basis, the FDA may allow pharmaceutical companies to provide terminally ill patients with potentially life-saving prescription drugs before the new medications have undergone the usual complete FDA testing procedures.(39) The FDA's accelerated approval process still requires at least an initial showing of new drug safety and potential efficacy, usually supported by Phase 1 clinical trials.(40) All adverse side-effects must be immediately reported to the FDA.(41) The accelerated approval process raises concerns about pharmaceutical companies avoiding tort liabilities, because it allows these companies to use the comment k exemption from strict liability for unavoidably unsafe drugs as a shield in lawsuits.(42)


To what extent does comment k to section 402A of the Restatement (Second) of Torts (comment k) provide an additional incentive for pharmaceutical companies to abuse the accelerated approval process? Section 402A carves out special liability applicable to any: "Seller of Product for Physical Harm to User or Consumer."(43) Comment k essentially provides pharmaceutical companies with incentives to develop new drugs without risking strict liability if the drugs later turn out to be harmful.(44) This strict liability exemption reduces the risk posed to companies that provide adequate warnings and labeling of their drugs, yet allows liability if the companies have acted negligently.(45)

1. Conflicts in State Application

Conflicts have arisen over the scope and impact of comment k immunity from strict liability for unavoidably unsafe drugs. Many states have adopted comment k immunity.(46) However, state statutes vary as to the scope of the comment k exemption from strict liability and the implications of comment k on pharmaceutical companies' practices.(47) A brief review of two cases indicates the diversity of courts' application of the comment k doctrine. At one extreme, in Brown v. Superior Court,(48) the court adopted comment k immunity for all drugs, not just dangerous drugs, and noted that a majority of California courts have embraced the comment k exemption.(49) On the other hand, in Hill v. Searle Laboratories,(50) the court rejected the broad application of comment k to all FDA accelerated approval drugs and disagreed with the Brown decision, citing cases expanding strict liability policies.(51)

Presumably, most accelerated approval drugs would fall under the comment k exemption for unavoidably unsafe drugs; however, this has yet to be evaluated by courts. Consequently, the FDA must take an active role in ensuring consumer safety when unavoidably unsafe drugs are at issue. The FDA must fully evaluate all proposals that would privatize aspects of the accelerated approval process and the current FDA regulations for accelerated approval drugs should be adhered to, at least until other deregulatory FDA actions have proven safe and feasible in the nonaccelerated approval context.



Concerns that pharmaceutical companies will abuse the accelerated approval process are widespread and tied to concerns that lax FDA enforcement will potentially decrease consumer protection.(52) Methods of deterring accelerated approval process abuses, such as FDA regulation and monitoring of pharmaceutical companies that are pushing for potentially unsafe drugs to enter clinical testing, are a major concern for the FDA and patients, among others.

1. Incentives for the Pharmaceutical Industry to Use and Develop Drugs Under the FDA's Accelerated Approval Process

The FDA's accelerated approval process allows pharmaceutical companies to bypass several of the usual procedures serving to protect consumers from unsafe drugs.(53) Primarily, the accelerated approval process allows a limited class of individuals, who are unable to engage in normal clinical trials and who suffer from a serious or life-threatening disease, to receive new experimental pharmaceuticals through expanded clinical trials.(54) Phase 1 introduces a pharmaceutical to a small group of volunteers for a short period of time, usually less than one year, during which the sponsor notes the efficacy and safety of the new drug.(55) If the drug initially proves safe, the manufacturer may proceed to Phase 2, which lasts approximately two years and consists of several hundred patients in randomized double blind clinical trials.(56) Efficacy and dosage requirements are determined.(57) After the Phase 2 trial has shown safety and efficacy, the manufacturer proceeds to Phase 3, a larger-scale Phase 2 clinical trial.(58) Sponsors usually file a new drug application with the FDA after Phase 3 trials are completed.(59) Drugs may be introduced in the market as early as Phase 1 if the FDA believes that there is an initial showing of safety and efficacy.(60)

Clearly, the FDA's accelerated approval process also provides several business incentives for pharmaceutical companies to use the process. For example, faster approval may lead to more rapid recovery of sunk costs(61) spent on research and development (R & D).(62) In addition, pharmaceutical companies gain savings from lowered R & D expenses for clinical trials.(63) The lower expense for clinical trials allows for shifting of money to new R & D projects. The R & D savings may also be reflected in increased earnings per share (EPS)(64) and potential capital gains(65) on stock value increases for shareholders. A pharmaceutical company may further gain intangible assets such as goodwill(66)--especially in the case of cancer and AIDS treatments--and free publicity in the lay press, which may lead to more opportunities to secure future financing or venture capital.(67)

2. Concerns Regarding Potential Abuses in the Pharmaceutical Industry

Many economic and intangible benefits exist for pharmaceutical companies to use the FDA's accelerated approval process. Concerns have focused on these incentives, evaluating how the incentives may encourage pharmaceutical companies to abuse the FDA's accelerated approval process. In particular, bypassing Phase 2 and 3 clinical trials and introducing drugs into the market at such early stages raises several legal concerns, primarily stemming from potential safety hazards of these new drugs.(68) With such FDA approval, pharmaceutical companies may allow harmful and ineffective drugs to be prematurely introduced into the consumer market.(69) Also, accelerated approval may limit the ability of pharmaceutical companies to know or discover serious side-effects and contraindications.(70) Consequently, legal concerns have arisen about what diseases should be targeted for accelerated approval drugs. Because FDA protection of consumers should always remain a central goal,(71) a review of FDA enforcement practices is warranted. …

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