Drug approval is unequivocally the linchpin to any drug development effort and, given the role of the US market in the global marketplace, the drug approval standard employed by FDA remains a perennial focus of stakeholders across the industry. In light of recent remarks from the FDA commissioner on the development of a new conditional approval pathway, we revisit FDA’s existing approval standard and the broader regulatory and policy context that has, to date, underpinned FDA’s drug approval practices and anchored the agency as the worldwide “gold standard.”
Conditional approval is typically understood to provide for earlier, albeit potentially temporary, drug approval based on a lower evidentiary threshold, while conclusive evidence of effectiveness of a product is developed and confirmed. While the concept of conditional approval in the United States for human drug products remains conceptual with no formal proposals or announcements from FDA or legislation from the US Congress, it has sparked debate about its implications for public health, patient safety, and the current regulatory framework.
Exploring the contours of FDA’s existing approval pathways, this post positions the conditional approval proposals within the broader regulatory context, highlighting both potential promises and pitfalls.
The Current Approval Standard
FDA’s drug approval standard under the Federal Food, Drug, and Cosmetic Act (FFDCA) requires drug sponsors to establish “substantial evidence” of a drug’s safety and efficacy, which is defined as
evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof (21 USC § 355(d))
FDA has interpreted this standard to typically necessitate at least two randomized controlled trials (RCTs), with results that demonstrate a drug’s benefits and a process that adequately evaluates the drug’s risks, although FDA also recognizes other paths to establishing safety and efficacy. With a single approval standard applicable to all drug and biologic products, FDA has worked to recognize and adopt certain flexibilities within this framework while simultaneously maintaining a sufficiently rigorous standard that can be applied consistently across the entire range of therapeutics and diseases and conditions they are intended to treat.
Meeting the Standard: Small Populations
Despite FDA’s efforts to employ flexibility in the approval standard, this process can pose significant challenges for the development of rare disease drugs. Rare diseases collectively affect an estimated 30 million people in the United States but, by definition, each individual rare disease typically impacts only a small number of patients. The small size of the patient population, combined with the heterogeneity of these diseases, still-developing science, and the resources required for drug development, can make it extraordinarily difficult to design and conduct multiple large-scale RCTs, resulting in promising therapies becoming stranded without a viable regulatory path forward for approval.
While FDA, in an attempt to address these challenges, has crafted and implemented programs and mechanisms (such as orphan drug designation) to support the development of treatments for rare disease, debate continues as to whether the “substantial evidence” approval standard is fit for the purposes of at least a subset of rare disease.
Meeting the Standard: Speed
Another hurdle to FDA’s traditional “substantial evidence” standard is of course speed. The time required to design and conduct large-scale RCTs is typically significant, in particular when direct clinical benefit must be measured during the course of a trial.
Here too FDA has created a number of programs intended to facilitate the development of therapeutics, in particular when approval would meet an unmet clinical need. Most notably, arising out of the HIV/AIDS epidemic, FDA’s accelerated approval program, beginning as a regulation in the 1990s and later codified by Congress into the FFDCA, provides for the approval of drugs for serious conditions that fill an unmet medical need based on a surrogate or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.
At its core, this pathway accelerates drug development by allowing the development of “substantial evidence” of effectiveness of a drug product based on a surrogate endpoint earlier in the progression or treatment of a disease, rather than based on the more traditional, and by definition slower, direct measure of clinical benefit.
A Misnomer: Accelerated Approval as Conditional Approval
FDA’s current accelerated approval pathway allows a drug to reach the market more quickly by relying on certain surrogate endpoints instead of traditional clinical endpoints. Under this framework, sponsors must also verify the anticipated clinical benefit through subsequent confirmatory trials. And if these trials fail to substantiate the drug’s effectiveness, FDA has expedited authority to withdraw its approval.
Perhaps because the accelerated approval pathway shares some features of proposed conditional approval pathways (such as reliance on different types of evidence, post-market obligations, and expedited withdrawal procedures), accelerated approval is sometimes thought of, or even referred to, as a form of conditional approval. Fundamental to the conditional approval processes being proposed by the commissioner, however, would be a distinctly different—and lower—approval standard.
FDA is careful to note that drugs granted accelerated approval meet the same standard for safety and effectiveness as those granted traditional approval (even if, for example, the studied endpoints may differ).
Pathways to Conditional Approval
More specifically, a conditional approval framework, as proposed through prior legislative initiatives like the 2024 “Promising Pathways” bill and recently discussed by the FDA commissioner, would allow initial approvals based on substantially more limited evidence, such as mechanistic plausibility or early-phase data, and would then rely on subsequent post-approval studies or real-world data collection to confirm the safety and efficacy of the product. Representing a fundamental shift in how we currently think about the drug approval process, a conditional approval framework raises significant questions about how safety and efficacy would be ensured in the absence of traditional RCT data.
Further, given the speculative and informal nature of this concept at this stage, it is unclear how a conditional approval pathway might be implemented, and to date we do not have further indications from FDA or elsewhere on how this may progress. Congress could pass legislation that explicitly authorizes a conditional approval pathway, including as seen in the proposals in the 2024 Promising Pathways Act (which included allowing FDA approval based on limited initial evidence while mandating rigorous post-market surveillance and ongoing evidence collection).
Legislative action may provide FDA with clear statutory authority to operationalize such a framework, but would also depend on action from Congress. Alternatively, FDA may consider whether it might itself develop such a pathway through policy and rulemaking or through individual application decisions and adjudications, employing the existing flexibility within FDA’s current statutory approval authority beyond its historic boundaries.
Seeking to achieve this within a single statutory approval standard may lead to numerous legal, scientific, and clinical challenges in implementation. Given current de-regulatory mandates, transparency may also be a challenge here for FDA and industry alike. Regardless of the mechanism, any conditional approval framework would require the inclusion of robust safeguards, such as mandatory post-market studies, adverse event monitoring, and clear processes for withdrawing approval if safety and efficacy concerns arise.
Potential Downstream Impacts
The introduction of a conditional approval pathway would likely have wide-ranging implications, both positive and negative:
- Patient Access. While a conditional approval pathway could expand access to treatments, in particular for rare disease drugs, it might also create greater disparities in access to care if high costs or limited insurance coverage prevent widespread use.
- Coverage and Reimbursement. Currently, private payors and Medicare can exclude accelerated approved drugs from coverage if determined that clinical trial evidence is insufficient. Conversely, subject to very limited exceptions, Medicaid, to comply with the requirements of the Medicaid Drug Rebate Program, must cover all FDA-approved drugs including accelerated approval drugs. Payors have expressed concern over potential approval revocation of conditionally approved drugs. Some indicate they may postpone pharmacy and therapeutics committee review of conditionally approved drugs for six to twelve months, or until FDA grants full approval to allow confirmatory studies to be completed. Others will require a medical exception and review process or prior authorization. Given these issues have arisen in the accelerated approval context, where FDA employs the same approval standard for traditionally approved drugs, we expect payor concerns and coverage restrictions to multiply in the context of conditional approval.
- Post-Approval Data Generation. Sponsors would likely face increased pressure and responsibility for collecting post-market data, including monitoring adverse events and conducting long-term follow-up studies. Failure to meet these obligations could undermine confidence in the conditional approval framework. Given the focus on and concerns with the timeliness and feasibility of post-approval confirmatory evidence generation in the context of accelerated approval products, again, we would expect these issues to be exacerbated in the context of conditionally approved products.
- Incentivizing Innovation. By lowering pre-market evidentiary barriers to developing a rare disease drug, a conditional approval pathway could stimulate investment in disease research and development, in particular for rare diseases. However, the long-term success of this alternative pathway would depend on whether public trust in the approval process and regulatory system more broadly is maintained, which would require the appropriate balance of innovation with adequate safety and efficacy safeguards. Further care would be required in designing and implementing such a system such that the interactions between pathways—traditional, accelerated, and conditional—were considered and addressed to ensure, for example, that the creation or addition of a new pathway does not inadvertently impact existing pathways or the innovation and treatment alternatives that they generate.
- Regulatory Precedents. Establishing a conditional approval pathway for rare diseases could set a precedent for similar frameworks in other areas that are heavily regulated by FDA. This could lead to broader changes in FDA’s regulatory landscape as a whole, with far-reaching implications for drug development, safety, and efficacy standards.
Key Takeaways
The introduction of a conditional approval pathway for rare disease drugs would represent a significant evolution in FDA’s regulatory framework. The idea of a conditional approval pathway remains, at this point, theoretical, with no formal proposals from FDA or legislative action to date. While such a pathway could address critical unmet needs, it also raises significant concerns about patient safety and the integrity of the drug approval process.
Striking the right balance between promoting scientific advancements and maintaining appropriate safety and efficacy standards will be essential to ensuring that any new framework benefits patients without compromising public health. Our team of FDA lawyers at Morgan Lewis are monitoring these proposed changes to FDA’s regulatory framework and are well-positioned to assist clients in navigating these complex discussions and potential future developments.