“We’re on an unsustainable path, where the cost of drug development is growing enormously, as well as the costs of the new medicines. We need to do something now, to make the entire process less costly and more efficient. Otherwise, we won’t continue to realize the practical benefits of advances in science, in the form of new and better medicines.” Scott Gottlieb US FDA Commissioner, 2017*

When Commissioner Gottlieb said this, he was referring to the regulatory burdens at the US FDA. But the concept is actually more global. With the face of medicine changing through the technological advancements of this century, and with more and more countries waking up to their populations' disease burdens, the role of regulation in drug development will be consequential.

According to a May 2018 article in Policy Med by Thomas Sullivan, the approval rate for drugs entering clinical development is less than 12%. This means that 11 or less putative drugs/molecules that pass the pre-clinical phase of drug development actually are approved to be marketed. Any investor looking at this data would run for the hills! The study that Sullivan's article relies on from Tufts Center for the Study of Drug Development (CSDD), indicates that of the $2.558 billion figure per approved compound includes average out-of-pocket cost of $1.4 billion and time costs (the lag time for drug development) of $1.2 billion. With a time cost of 1.2 billion, its not difficult to see why investors may be wary of investing in this highly risky sector. Those investors who don't run for the hills, would like to see some return on their investment. Presumably, reducing the time cost of drug development would have some impact on prices.

It's in this expense (time cost), that Gottlieb believes his work at the FDA can and should, at least in part, help. But how does regulatory harmonization fit in all of this? Consider this: Countries around the world are waking up to the health needs of their patient populations. Spurred on by the WHO's efforts awareness raising in this area, countries are searching for ways to address their patient's health needs, whether through revamping health systems or increasing drug availability. One of the many way that the WHO has directed countries' efforts in this area, is through regulatory system strengthening under the umbrella of one of its sub-entities, the International Conference of Drug Regulatory Authorities. WHO members are being urged through resolutions, guidances and training efforts to strengthen their regulatory systems. The Global Benchmarking Tool is the primary means by which the WHO attempts to objectively evaluate regulatory systems and identify areas for improvement. These assessments tools have led to WHO member countries to put in place new regulatory systems in some instances, and to strengthen their existing systems in others.

A drug company seeking approval for a product in multiple countries must now navigate the morass of regulations in each country. If the time cost was for seeking approval in one or two countries was high, then it is likely to be exorbitant in multiple markets. This complication has not gone unnoticed by governments and industry and a movement to harmonize regulations through multilateral forums is underway.

One of the first multilateral forums to take up the mantle of regulatory harmonization, was the International Council on Harmonization (ICH) which develops guidelines in the key areas of the drug approval process. Inspired by the successful harmonization of Europe's regulatory systems in the 1980s, the ICH began it's efforts to harmonize the regulatory systems between Europe, Japan and the US in early 1990. The ICH has since expanded (in 2015) to include several other countries including China and Brazil among others. Today, ICH guidelines are the gold standards by which regulatory authorities approve drugs.

Regional efforts to harmonize have also cropped up over the years, as the Asia Pacific region through the Asia Pacific Economic Cooperation's Regulatory Harmonization Steering Committee and the African continent (African Medicines Regulatory Harmonization ) also have created forums for harmonization. These regional efforts mainly encourage the adoption of the ICH guidelines and reliance on the decisions of more sophisticated regulatory authorities such as those in the US, Japan and Europe.

While the US is still the most lucrative market for pharmaceuticals by far, this paradigm is changing as China, Brazil and Korea enter as players on the world stage. This dynamic will change even more in the coming decade as more and more countries put in place health systems with regulatory authorities. This will not only increase the market potential for pharmaceuticals, but will also intensify the need for streamlined regulations as companies seek approval in these new markets. The US, EU and Japan have been leaders in ICH; the first set of regulatory authorities to work towards harmonizing their sophisticated systems through uniform guidelines.

In an ideal world, a company seeking approval would need only to submit its dossier one time in order to receive global approval, but that world, if it is even possible, is decades, perhaps even a generation away. Today, we can hope for streamlined sophisticated regulatory systems which are relied on by other less sophisticated regulatory authorities to approve the much needed medicines that patients will need.

While it is unclear exactly what impact harmonization will have on the price of pharmaceuticals, one thing is clear, products that once took years to enter less developed markets, will be approved and ready to make their way to patient populations earlier than before. This data point will make investors less likely to run for the hills. Gottlieb's concern that medicinal advancements are being hindered would be diminished as the promise of expanding markets attracts investors. Of course availability and access can be miles apart, depending on the infrastructure and the overall health system of the country. But at least, the products would be available.

*On March 5, 2019 Commissioner Gottlieb announced his resignation.