Pharmaceutical Drug Regulation in the United States and United Kingdom: Assessing Consumer Drug Availability and Pricing

By

Rhea Bhatt

A thesis submitted in partial fulfillmentof the requirements for the degree of

B.S. Biomedical Sciences and Political ScienceGraduation with Honors College Distinction

College of Arts and Sciences University of South Florida

Thesis Chair: Dr. John DormoisDr. Deidre Orriola

Date of Approval: March 15, 2019

Word Count: 7896

Keywords: [regulatory requirements], [US Food and Drug Administration], [European

Medications Agency], [Medicines and Healthcare Products Regulatory Agency], [Implications of

Brexit on UK pharmaceutical industry]

Table of Contents

I. Introduction

II. Literature Review

III. The Development of Regulation in the United States and United Kingdom

IV. Contrast in Regulatory Philosophy

V. Anti-trust and Price Fixing of Medical Products

VI. Addressing Increasing Drug Prices in the United States

VII. Potential Changes to the American Approval Process

VIII. Impact of Brexit on British Drug Approval

IX. Key Distinctions Between US and UK

X. Conclusion

XI. Works Cited

Introduction

The regulation of medical drugs, devices and therapies involves competing goals of

assuring safety and efficacy while providing rapid movement of innovative therapies through the

investigative and regulatory processes. There is a trade-off between affordability and

accessibility of the remedy (patient quality of life) and associated risk (toxicity of the drug).

While both the United States and the United Kingdom have similar regulatory priorities and

missions, the approaches to drug and device approval are distinct. Approval and regulation of

novel medical drugs, devices and therapies poses complexities. Extensive research and

development, clinical trials, lengthy regulatory review requirements, and funding are all factors

that should be considered in the analysis of drug and device evaluation (Van Norman, 2016).

While the US relies on a highly centralized process through the US Food and Drug

Administration (FDA), the European Commission has established systems to synchronize the

regulations of its 28 member states. This report summarizes the approval requirements for new

drugs in the United States and the United Kingdom. It further aims to compare the approval

process and identify opportunities for improvement and streamlining to maximize patient

outcomes and ensure safety and efficacy and drugs and devices. There are structures in place in

the United States and United Kingdom that aim to ensure novel therapies are safe and effective

for patients. Yet, despite this comprehensive structure, there are inherent differences in the drug

approval process, including the degree of centralization and the timeline from initial application

to consumer availability. Price fixing by pharmaceutical companies is used as an example to

demonstrate the need for improved patent regulation and stronger antitrust legislation in the US.

Finally, the paper further discusses the implications of Brexit on the UK pharmaceutical

industry. This paper aims to explore the differences and similarities between the American and

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British drug approval process and highlight inefficiencies in the existing framework, specifically

citing exclusion payments and product hopping in the US and the decision for the UK to leave

the EU.

Literature Review

Section I: How are drugs licensed and approved in the United States?

The Center for Drug Evaluation and Research (CDER) at the FDA is the consumer

watchdog and works to ensure safety and efficacy of novel drugs. Throughout history, drug

toxicity, adverse effects, non-compliance, adulteration, abuse, counterfeiting, and mass

poisonings have caused countless deaths, suffering and misfortune. The FDA “is responsible for

protecting health of the public by ensuring the safety, efficacy, and security of human and

veterinary drugs, biological products, and medical devices” (FDA, 2018). The agency also

ensures the safety of our nation's food supply, cosmetics, and products that emit radiation (FDA,

2018). CDER’s evaluative role not only prevents health fraud, but it also allows physicians and

patients to use medications appropriately. Its purpose is to ensure that both generic and brand

name products are safe and effective (FDA, 2018).

Drug companies seeking to sell a product in the United States must first test it and send

evidence to CDER that its health benefits outweigh its known risks. Physicians, statisticians,

chemists, pharmacologists, and other scientists at CDER conduct an independent and unbiased

review of the company's data and proposed labeling. Based on this review, the drug may or may

not be approved for commercial markets.

FDA outlines a three-pronged structure for drug approval:

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1) Analysis of the target condition and available treatments—FDA reviewers analyze

the condition or illness for which the drug is intended and evaluate the existing treatment

options available patients.

2) Assessment of benefits and risks from clinical data—FDA reviewers evaluate clinical

benefit and risk information submitted by the drug maker, taking into account any

uncertainties that may result from imperfect or incomplete data. It is expected that drug

manufacturers will submit results from two well-designed clinical trials, to ensure the

data from the first trial are not the result of chance or bias. Phase 2 trials, which last

between several months to two years and involve several hundred participants, assess

efficacy and side effects of the drug. Phase 3 trials typically last 1 to 4 years and involve

anywhere from 300 to 3,000 volunteers to help to monitor adverse reactions. In certain

cases, especially if the disease is rare and multiple trials may not be feasible, convincing

evidence from one clinical trial may be enough. Evidence that the drug will benefit the

target population should outweigh any risks and uncertainties.

3) Strategies for managing risks—Risk management strategies include an FDA-approved

drug label, which clearly describes the drug’s benefits and risks, and how the risks can be

detected and managed. In situation when there is an additional effort needed to manage

risks, a drug maker should implement Risk Management and Mitigation Strategy

(REMS).

Accelerated Approval, expedited drug approval

Accelerated Approval can be applied for therapies that treat a serious or life-threatening

condition and provide therapeutic benefit over available therapies.

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“This approach allows for the approval of a drug that demonstrates an effect on a “surrogate endpoint” that is reasonably likely to predict clinical benefit, or on a clinical endpoint that occurs earlier but may not be as robust as the standard endpoint used for approval. This approval pathway is especially useful when the drug is meant to treat a disease whose course is long, and an extended period of time is needed to measure its effect” (FDA, 2018).

It is important to note that after the drug enters the market, the drug maker is required to conduct

post-marketing clinical trials to verify the drug’s benefit. If further trials fail to verify the

predicted clinical benefit, FDA may withdraw approval. Accelerated Approval pathway was

instituted in 1992 and has been effective in expediting approval for many drugs that treat life-

threatening conditions. These regulations allowed drugs for serious conditions that filled an

unmet medical need to be approved based on a surrogate endpoint.

“A surrogate endpoint used for accelerated approval is a marker (a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit) but is not itself a measure of clinical benefit. Likewise, an intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on irreversible morbidity and mortality (IMM)” (FDA, 2018).

Using surrogate or intermediate clinical endpoints can save valuable time in the drug

approval process. For example, instead of having to wait to learn if a drug actually extends

survival for cancer patients, the FDA may approve a drug based on evidence that the drug

shrinks tumors, because tumor shrinkage is considered reasonably likely to predict a real clinical

benefit. “In this example, an approval based upon tumor shrinkage can occur far sooner than

waiting to learn whether patients actually lived longer. The drug company will still need to

conduct studies to confirm that tumor shrinkage actually predicts that patients will live longer”

(FDA, 2018). These studies are known as phase 4 confirmatory trials (FDA, 2018).

Many antiretroviral drugs used to treat HIV/AIDS entered the market via accelerated

approval, and subsequently altered the treatment paradigm. Several targeted anti-cancer

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medications also have been introduced to the market through Accelerated Approval pathway

(FDA, 2018).

Where confirmatory trials verify clinical benefit, FDA will generally terminate the

requirement. Approval of a drug may be withdrawn or the labeled indication of the drug if trials

fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify the risks

associated with the drug (e.g., show a significantly smaller magnitude or duration of benefit than

was anticipated based on the observed effect on the surrogate) (FDA, 2018).

Section II: How are drugs licensed and approved in the United Kingdom?

The European Medicines Agency (EMA) is responsible for regulatory approval of new

drugs within the European Union (EU). As a result of the UK leaving the EU, this is subject to

change. United Kingdom plans to leave the EU on March 29, 2019. The European Medicines

Agency (EMA) is responsible for reviewing applications for new drugs within the European

Union (EU). Once a drug has EU marketing authorization, it is ‘licensed’, ‘registered’ or

‘approved’ (Cancer Research UK, 2017).

The Medicines and Healthcare products Regulatory Agency (MHRA) is responsible for

enforcing European drug approval regulations within the UK, making sure drugs are safe and

effective. MHRA is responsible for reviewing new drugs when pharmaceutical companies want

to license medicines outside of the EMA’s centralized authorization procedure. The MHRA also

enforces European drug licensing regulations in the UK. The agency ensures the safety and

effectiveness of medicines in the UK. The following is a list of MHRA responsibilities: the

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approval of clinical trials carried out in the UK, regularly inspecting laboratories and

pharmaceutical companies, sampling medicines to ensure they meet quality standards, collecting

and reviewing evidence about drug side effects from patients and health care workers, gathering

information about fake medicines.

In the EU, an application for a new drug is submitted to the member state for approval.

Each country designates its regulatory body to conduct clinical trials. Both the US and UK

follow a step-wise process for clinical trials. There are four distinct phases of the clinical trials

process. Phase 0 and 1 involve a smaller number of healthy subjects in order to determine dose

range and clarify pharmacology (Van Norman, 2016). Phase II trials, used to determine

dose/response relationship, involve several hundred patients with the target condition. Phase III

trials involve several hundred to several thousand patients to evaluate safety and efficacy (Van

Norman, 2016).

Phase I: trails conducted with a small healthy sample to clarify pharmacology and dose

range

Phase II: conducted in several hundred patients with target condition to determine dose-

response relationship

Phase III: confirmatory travels in several hundred to several thousand patients to

substantiate safety and efficacy.

Once clinical trials are complete, the drug enters one of four approval pathways:

centralized procedure, decentralized, mutual recognition, or the national process, described in

detail later under the “Contrast in Regulatory Philosophy” section. The centralized process is

conducted by the EMA. The decentralized process involves simultaneous application in multiple

EU member states. After approval in a member state, a new application can be filed for the

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mutual recognition in all states via the EMA (Van Norman, 2016). Lastly, the national process

involves filing an application to the designated “national body within a single EU” member state

(Van Norman, 2016).

After a drug has been approved the National Institute of Clinical Excellence (NICE)

decides whether a drug should be made widely available on the NHS. Once a drug is licensed,

NICE may assess it to see whether it should be widely available on the NHS in England. The

Scottish Medicines Consortium (SMC) decides if the new drug should be available on the NHS

in Scotland. After licensing, the MHRA continues to collect information and continue to monitor

the safety and effectiveness of the drug.

The Development of Regulation

United States

Congress passed the Food and Drugs Act of 1906 which prevented “interstate commerce

in misbranded and adulterated drugs” (Teff, 1985). However, the 1906 Act had several

limitations including only allowing “prosecution and seizer after the event” despite being a

critical signature of the need for consumer protection (Teff, 1985). The US Food and Drug

Administration was established in 1927, and originally referred to as the Food, Drug and

Insecticide Administration. 

United Kingdom

The history of drug regulation in the United Kingdom followed a similar pattern to that in

the United States. The thalidomide incident prompted the Medicines Act of 1968 which

increased restrictions on pharmaceutical companies. It should be noted that during this period,

there were no safety or efficacy requirements, “even an inquiry…after the thalidomide disaster

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did not recommend immediate mandatory controls” (Teff, 1985). Between 1964 and 1971, the

majority of regulatory tasks were carried out by the Committee on Safety of Drugs (CSD).

Contrary to suggestions from the CSD, leading trade associations, namely the Association of the

British Pharmaceutical Industry and the Proprietary Association of Great Britain “agreed that

their members would not undertake clinical trials or market new medicines” (Teff, 1985).

In the late 1960s, English legislation focused on consumer protection by means of legal

regulation to reduce consumer vulnerability. The Medicines Act 1968 not only imposed "safety

and efficacy requirements, but also introduced restrictions on advertising and promotion” (Teff,

1985). Additionally, the 1968 Medicines Act established provisions for safety inspections of

manufacturing plants and finalized a system of licensing. Today, pharmaceutical companies are

required to submit their new drug applications (NDAs) to the Committee on Safety and

Medicines (CSM), the key body involved in licensing medicines for human use (Teff, 1985).

Europeanization also has had substantial impact on the history of drug regulation in the

UK. According to Eva Ruffing’s work, the concept of Europeanization acts as the independent

variable and “its value increases when national agencies become more engaged in European

decision-making” (Ruffing, 2017, 5). Broadly speaking, “the change in coordination structures

due to Europeanisation processes has only been modest” (Ruffing, 2017, 17). This, perhaps, is

“due to peculiarities of the policy domain, in which a very clear separation between ministry and

agency is established to ensure expertise-driven decision-making in the sensitive field of

pharmaceutical safety” (Ruffing, 2017, 17).

Contrast in Regulatory Philosophy

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There are three primary institutions involved in the British drug approval process

including The European Medicines Agency (EMA), The Medicines and Healthcare Products

Regulatory Agency (MHRA), and The National Institute for Health and Care Excellence (NICE).

Each agency is responsible for carrying out tasks during specific points throughout regulatory the

process. EMA is responsible for granting product licenses before a new drug can be marketed in

the UK (Drug and Therapeutics Bulletin, 2009). The four types of marketing authorizations

outlined by the EMA are: the centralized procedure, mutual recognition procedure, decentralized

procedure, and national procedure, as described earlier in the paper.

Prior to 1993, regulation and marketing of drugs and devices fell under the jurisdiction of

the EU member states. After the formation of the EU in 1993, regulation have become more

standardized. The EC has established certain regulations which state and central agencies are

required to abide by concerning marketing of drugs. Most new drug applications are handled by

the state itself.

Under the EU directive standardizing European regulations, products first were required

to be approved in the member states. Additionally, the “directive establishes consistent

guidelines throughout the member states regarding the information that must be submitted for

approval” which is similar to FDA regulations “regarding investigational new drug applications

and new drug approval applications” (Van Norman, 2016). In both the US and the UK, the drug

progresses through a sequence of studies to determine safety and efficacy.

The European Medicines Agency was formed in 1995 with funding from the EU,

pharmaceutical industry and member states (Van Norman, 2016). In contrast to the FDA, the

EMA does not oversee all drug approvals; instead, there are four approval options, depending on

“the drug class and manufacturer preference” (Van Norman, 2016). The first option is through

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the centralized process which is controlled by the EMA. The EMA Committee for Medicinal

Products issues a license for the drug or device and is comprised of representatives from each

member state. The centralized process is compulsory for certain treatments including:

HIV/AIDS, oncology, diabetes, neurodegenerative disorders, autoimmune disease and viral

diseases (Van Norman, 2016). Another approval option is the national process, in which the

individual member state has its own requirements that are separate from EU regulations. The

third option is mutual recognition, which maintains that “drugs approved in one EU state via the

state’s national process can obtain marketing authorization in another EU member state” (Van

Norman, 2016). The final approval pathway is known as the decentralized procedure. If the

product has not been authorized for use in any member state and does not fall under the

mandatory centralized process, the “manufacturer can apply for simultaneous approval in more

than 1 EU state” (Van Norman, 2016). This is the most common route; in 2008, there were 1,400

decentralized applications compared to only 100 centralized applications (Van Norman, 2016).

There are two main points of contrast between the FDA and EU drug approval processes are the

time required for drug approvals and transparency of nonpublished drug trials data. For both

patients and manufacturers, it is critical that time undergoing approval is minimized.

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Figure 1: European Medicines Agency compared to US Food and Drug Administration

(FDA.gov)

The figure above outlines the approval processes utilized by the FDA and EMA. From

submission to EU marketing authorization, the process takes 14 months through the EMA.

Through the FDA, the process generally takes 8 months under priority review and 12 months

under standard review. As depicted, check stops extend the timeline for European drug approval.

The FDA defines the timeline to review the application and is generally an expedient process, so

long as the submitted application is thorough.

Anti-trust and Price Fixing of Medical Products in the US

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The lack of stringent antitrust policy significantly contributes to inequalities in care.

Aggressive competition among sellers in a marketplace offers consumer “the benefits of lower

prices, higher quality products, and services, more choices, and greater innovation,” and

healthcare is no exception (Federal Trade Commission). Oligopolistic and monopolistic firms are

capable of capturing wealth from consumers. Similarly, powerful firms in the market capture

wealth from smaller-scale producers (generic pharmaceutical companies) by depressing the

prices of their goods. Consequently, consumers pay higher prices, contributing to larger profits

for firms and “ultimately larger dividends and capital gains for shareholders and larger salaries

and bonus for executives-- two groups that tend to be overwhelmingly affluent” (Khan and

Vaheesan, 248). The US healthcare framework relies upon these competitive dynamics to

regulate price inflation across industries. Insurance monopolies create situations where few

options for coverage exist in a particular geographic sector, which subsequently allows the

company to charge exorbitant premiums from patients. Anticompetitive behavior can pose

unnecessary strains on both consumers as well as smaller firms who not may be able to offer

drugs/goods at a lower price due to lower volume. Stricter regulation of the pharmaceutical

industry could be useful to address increasing drug prices and alleviate drastic inequities in the

healthcare sector.

Within the industry, two key pharmaceutical practices contribute including exclusion

payments and product hopping. Pharmaceutical manufacturers leverage two strategies:

“exclusion payments by branded drug makers to prospective generic rivals” and product

hopping, or artificial patent extension, by branded drug manufacturers, as discussed below.

While effective in terms of price protection for drug manufacturers, these practices hamper

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generic drug competition and subsequently impose an unnecessary burden on patients and

consumers (Khan and Vaheesan, 249).  

The Drug Price Competition and Patent Term Restoration Act, informally known as the

Hatch-Waxman Act of 1984, establishes that “a generic drug maker can enter the market and

compete against a patented drug maker with a bioequivalent drug and without performing full

clinical trials” that are typically required for a novel formulation (Khan and Vaheesan, 250).

Prior to entering the market, the generic company is required to demonstrate that either a) the

patents covering the branded drug are expired or b) the generic drug does not impose on the

existing patents. The Hatch-Waxman Act is intended to promote competition in the

pharmaceutical industry. However, over the past two decades, branded drug manufacturers have

attempted to prevent or delay generic entry by filing patent infringement suits. The act of filing

the lawsuits alleging patent infringement is not anti-competitive in itself, but there have been

instances where brand name pharmaceutical companies have paid rival generic companies to

postpone market entry, limiting competition and extended branded drug patent life. These

practices benefit both brand name and generic drug companies, but disadvantage consumers. It is

important to note that the exclusion payment, which is a portion of the branded firm’s monopoly

profit, is often higher than the generic company would receive in a competitive market. Branded

and generic drug companies benefit at the expense of consumers who continue to pay exorbitant

amounts for critical treatments.

Product hopping also introduces severe inequalities from an anti-competitive perspective.

In a product hopping strategy, branded drug manufacturers make small adjustments to existing

branded drug to obtain a new patent (artificially extend the patent) and extend their monopoly

position. For example, a drug company may change the form of administration from tablet to

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capsule, extending their patient, even though the change does not offer any additional clinical

benefit. This anticompetitive process of product hopping reduces the profit loss to the brand from

generic entry, ultimately allowing branded firms to set the prices of drugs. It is again patients

who bear the financial brunt of this pricing strategy, since they continue to pay more in terms of

copayments for the newly introduced branded drug. According to a Bureau of Labor Statistics

press release, product hopping costs patients more than twenty billion dollars a year.

A specific example of this phenomenon is insulin injections. Due to a “series of product

hops by branded manufacturers,” limited generic competition has inflated the price of diabetes

treatment (Khan and Vaheesan, 250). The financial burden ultimately impacts consumers that are

most in need of affordable and accessible care. Low-income patients have higher rates of Type 2

diabetes for various reasons, including limited access to fresh and nutritious produce. These

patients not only encounter difficulties to make suggested lifestyle changes, and due to pricing

maneuvers are now frequently unable to afford insulin injections which help regulate their blood

sugar. This is a clear example of how lenient antitrust laws contribute to health care inequality as

well as overall inequality.

On the other hand, some argue that increased regulation restricts innovation and

disincentivizes pharmaceutical companies to invest in R&D, which in turn limits production of

new technologies, devices, and medications. It should be noted that these practices stimulate

formulation and production of new and emerging technologies, devices and treatments that could

be highly revolutionary and contribute to overall health of humanity. These policies, however,

encourage anti-competitive tendencies and contribute to healthcare inequality across the United

States and prevent patients from purchasing the medications they require to sustain themselves.

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Addressing Increasing Drug Prices in the United States

The Problem: According to recent reports, drug companies announced price increases

averaging around 6 percent per drug in January 2019. Many pharmaceutical companies argue

that the annual increases are on the “list price” of drugs, which are typically reduced “by

additional payments to middlemen such as pharmacy benefit managers and health insurers”

(Azar, 2019). These payments, which are known as rebates, are ubiquitous in drug purchase

contracts. Drug companies claim that since “overall drug spending by insurers and patients does

not rise as much as the list price increases might suggest” to account for rebates, annual list price

increases are insignificant (Azar, 2019).

According to Azar, increases in list price have significant impact on American

consumers. In January, insurance deductibles reset, and Americans pay for drugs based on list

price. For “47 percent of Americans in high-deductible plans, this means thousands of dollars in

drug costs” (Azar, 2019). For those who require experience drugs covered in Medicare Part D,

patients pay coinsurance which is calculated as a share of list price.

The pharmaceutical market operates very differently from a typical marketplace, enabling

drug companies to increase prices annually. “Since pharmacy benefit managers, hired by insurers

and employers select the medications covered, a drug with a higher list price is often a more

attractive choice to cover than a cheaper competitor” (Azar, 2019). These high prices enable drug

companies to make larger rebate payments to pharmacy benefit managers, insurance companies

and employers, as opposed to patients. In a functioning free market, this competition would drive

down prices of drugs. However, in the current pharmaceutical market, prices continue to rise in

order to facilitate higher rebate payments to pharmacy benefit managers and health insurers.

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Recent Improvements: In May of 2018, the White House and Secretary Alex Azar

released the Health and Human Services blueprint for lowering drug prices. As a result, “drug

companies took 57 percent fewer price increases on brand drugs than in the same period in 2017”

(Azar, 2018). In response, Amgen, Merck and Gilead decreased list prices for specific products.

But smaller and fewer list price increases is only the first step.

Since the release of the drug-pricing blueprint, the Food and Drug Administration has

approved a record number of generic drugs in fiscal year 2018 (Azar, 2019). According to the

Council of Economic Advisers, generic approvals have saved consumers $26 billion dollars

(Azar, 2019). Meanwhile, the FDA also approved a record number of new drugs and biologics in

2018, introducing new competitors into the existing drug market, driving down costs for patients.

More Problems and Some Solutions: When it comes to the prices of the most expensive

physician-administered drugs in Medicare, the U.S. does poorly in comparison to peers around

the world. The U.S. pays almost twice as much since there is no negotiation and less competition

in the existing market. Economists argue that the lack of transparency and price discrimination

result in higher discounts for pharmacy benefit managers. If the drug manufacturer isn’t required

to offer discounts to other pharmacy benefit managers, it may result in deeper discounts.

Increased transparency in “drug pricing could encourage competition and force manufacturers to

cut prices to gain market share, especially for drugs that compete within a class” (Arnold, 2018).

Secretive pricing and establishing the “consumer expense on an artificial price to maintain the

negotiating leverage of pharmacy benefit managers forces patients to overpay” (Arnold, 2018).

“Pharmacy benefit managers could provide significant value,” but the existing system does not

align with the interests of consumers or insurers (Arnold, 2018). An improved business model

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must become more closely aligned with the interests of patients and payers. The Trump

administration proposed a model to remedy the issue by “securing a share of the discounts that

companies voluntarily give other countries for Americans” (Azar, 2019).

Other potential solutions have been proposed to drive down list prices. The

administration proposed the first-ever requirement to disclose drugs’ list prices in television

commercials. The Department of Health and Human Services is currently working with

“Congress on legislation to undo the Affordable Care Act’s limits on the penalties manufacturers

pay to the Medicaid program when they raise their list prices faster than inflation” (Azar, 2019).

Achieving lower drug prices will require involvement from industry, federal agencies,

and Congress. The presented solutions should be considered to arrive at a truly competitive

market for prescription drugs, as long as drug safety and patient care are at the center.

Potential Changes to the American Approval Process

Some suggest creating an agency similar to the United Kingdom’s NICE which

“independently reviews and recommends drugs within the same class, based on their safety,

efficacy and overall merit and benefit” (Gortler, 2016). The FDA is currently uninvolved in drug

pricing in the United States. Congress could explore either partnering or creating an agency to

“monitor drug prices and help assess their overall value, comparative effectiveness, and cost-

effectiveness” (Loike and Miller, 2017). The Institute for Clinical and Economic Review is an

existing organization that is establishing value-based price benchmarks according to benefits a

drug offers patients. Additionally, in 2010, the Patient Protection and Affordable Care Act

(PPACA) authorized the establishment of the Patient-Centered Outcomes Research Institute

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(PCORI) to carry out comparative effectiveness research (CER) and improve its quality and

relevance, which unfortunately, has yet to live up to its potential.

According to a report published by the US Government Accountability Office in 2018, “PCORI is a federally funded, nonprofit corporation established to carry out and improve comparative clinical effectiveness research, which evaluates and compares the health outcomes and the clinical effectiveness, risks, and benefits of two or more medical treatments, services, or items. From fiscal years 2011 through 2017, the Department of Health and Human Services (HHS) obligated about $448 million from the Trust Fund. Of this amount, HHS obligated about $260 million (or 58 percent of all obligations) to the dissemination and implementation of CER findings. As most PCORI-funded CER had not yet been completed due to the time needed to conduct this research, HHS efforts focused instead on the dissemination and implementation of CER funded by other federal entities. Additionally, HHS obligated funds for efforts to train researchers on conducting CER, build data capacity, and on administrative activities” (Government Accountability Office, 2018).

Another potential regulatory change would be to require academic institutions and

pharmaceutical companies to publish the results of clinical trials on ClinicalTrials.gov within one

year of “a trial’s primary completion date and to make their patient-level data available to all

researchers and physicians” (Loike and Miller, 2017). As of 2017, only 47 percent of trials were

registered and only 65 percent of trials for new drugs had publicly disclosed results.

Granted, academic researchers are often disinclined to disclose their research findings

publicly but increasing transparency “is likely to save money and spur innovation, as researchers

learn from the lessons of others and avoid duplicating costly trials” (Loike and Miller, 2017).

Unreported research results can compromise the safety of human research while also slowing the

pace of innovation (Piller and Bronshtein, 2018). In an investigation published in 2015, Boston-

based STAT news found that several high-profile research institutions were not publishing

clinical trials data for public access. Both patients and doctors rely on the public repository

ClinicalTrials.gov to “compare the effectiveness of approved and experimental drugs and

devices” (Piller and Bronshtein, 2018).

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STAT’s follow up study found that clinical trial results reporting has increased

significantly in the last two years. STAT analyzed 18,700 clinical trials results that should have

been published on ClinicalTrials.gov between 2008 and 2017 and found that “prestigious

medical research institutions were among the most flagrant violators of the reporting law” (Piller

and Bronshtein, 2018). Major research universities, drug and device companies are violators of

the existing law, most notably Memorial Sloan Kettering Cancer Center, the University of

Pittsburgh, and Stanford University. In order to increase and enforce transparency in scientific

reporting, a new rule gives the FDA and NIH “authority to levy financial penalties-- withholding

grants, or in the case of drug companies, imposing fines of up to $10,000 a day for late results”

(Piller and Bronshtein, 2018). STAT calculated that the FDA could have accumulated more than

$40 billion from violations of the law as of 2017. To uphold and improve both legal and ethical

standards with the goal of promoting clinical innovation and science transparency, federal

agencies can implement a transparency scorecard or a ranking system for all newly approved

drugs.

Similarly, more stringent oversight should be conducted for prominent figures in

medicine. Medical journals and professional societies have imposed stricter rules about reporting

relationships to industry but despite these efforts, in September of 2018, the Chief Medical

Officer of Memorial Sloan Kettering Cancer Center resigned “amid reports that he had failed to

disclose millions of dollars in payments from health care companies in dozens of research

articles” (Thomas and Ornstein, 2018). Dr. Jose Baselga “omitted his financial ties to companies

like Swiss drug maker Roche and several small biotech start-ups in prestigious medical

publications like The New England Journal of Medicine and The Lancet” (Thomas and Ornstein,

2018). The Times and ProPublica found that Dr. Baselga failed to report industry ties in 60% of

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180 papers he published since 2013. This number has since risen—Dr. Baselga failed to disclose

conflicts of interest in 87% of the journal articles he co-wrote in 2017. Prominent physicians

should be held to a higher standard and disclose payments from drug companies. Currently,

medical journals do not thoroughly fact-check authors’ disclosures. A more standardized system

for reporting industry ties could be useful to mitigate these conflicts of interest.

Another potential change is to reduce restrictions on startups and smaller drug

manufacturers. The United States is highly reliant on private drug companies to invest in R&D to

develop new drugs for existing and emerging diseases (Gortler, 2016). More conservative

scientists suggest limiting economic restrictions outlined by the US Department of Agriculture

(USDA), Environmental Protection Agency (EPA), and Food and Drug Administration, on these

startups to encourage innovation. The current system of drug approval in the US entails

exorbitant costs which have adversely affected the emerging biotechnology industry (Gortler,

2016). “Small biotechnology companies, unable to generate sufficient funds to finance the drug

approval process, face possible extinction. The potential decline of small biotech companies

threatens innovative drug development and the United States' reign as a global leader in

biotechnology” (Gortler, 2016). Many conservative agency officials argue that there is potential

for changes in the current drug approval process that would encourage growth of small biotech

companies while ensuring safety and efficacy of new medications.

Impact of Brexit on British Drug Approval

In June 2016, Britain stunned the world when voters elected to leave the EU, leaving the

pharmaceutical industry to prepare for the imminent changes. Being an EU member state

involves “being part of the single market, which allows people, goods, services and money to

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move freely across” borders (Kwon, 2018, 1). This lack of clarity around the specific mechanism

of dissociation from the EU is especially troublesome for the pharmaceutical industry, in which

the “development of drugs and other products depend heavily on the political and regulatory

conditions of a country, and often require planning years in advance” (Kwon, 2018, 2). A recent

report published by PricewaterhouseCoopers noted that life sciences firms “employed 482,000

people and contributed $40 billion USD to the country’s GDP” (Pricewaterhouse

Coopers, 2018). At this uncertain stage, it is nearly impossible to predict the full extent of

consequences of Brexit on the pharmaceutical industry may not be realized until the UK’s

departure and potentially for several years afterwards (Kwon, 2018, 5).

In January of 2017, Jeremy Hunt, former Secretary of State for Health, reported that “the

MHRA does around 40% of the testing for the EMA, and often the most complex cases” (Barber,

2017, 12). In its 2017 Work Programme, “the EMA reported that currently, UK experts

constitute 15% of its expert base and conduct around 20% of the scientific work” (Barber, 2017,

12). Since initial negotiations, Prime Minister Theresa May has expressed interest in retaining

access to each of the four approval pathways. In the best-case scenario, the UK would maintain

access to European centralized procedure. The most common approval pathway for new drug

applications in the EU is the centralized process. The centralized procedure allows drug

companies to apply for market access throughout the EU through a single application with the

EMA. Despite the UK’s interest in continuing with the centralized pathway in March of 2018,

the EU rejected any possibility of the UK remaining a member of the EMA post-Brexit. It is

unlikely that UK will be involved with the centralized procedure post-Brexit since EMA

published guidelines contingent upon “UK not having access to the centralized procedure after

March 30, 2019” (European Medicines Agency, 2017).

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It is likely that post-Brexit, products manufactured in the UK will not be approved across

the EU. Also, The MHRA would be required to established guidelines, independent of the EMA

to allow approval at the domestic level. It should be noted, as a result of Brexit, the UK drug

market will decrease in size drastically, compared to the US and EU pharmaceutical industries.

As a result of this lowered priority, it may take longer for patients to be able to access new drugs

and devices. Even though Jeremy Hunt has suggested that drugs licensed in the EU would

automatically be authorized in the UK, this does not guarantee cooperation from EU drug

companies. Brexit is likely to affect 274 small and medium-sized UK-based pharmaceutical

companies registered with the EMA (McHale and Bevington, 2018). For a smooth transition,

mutual recognition of authorizations “would have to be transferred to EU-based authorization

holders to continue being sold in the EU” by March 2019 (McHale and Bevington, 2018).

Recently, “16 drug companies and 10 trade associations have been asked to sign non-

disclosure agreement (NDAs) which prevent them from revealing any information related to

contingency plans” produced in conjunction with the Department of Health and Social Care

(Syal, 2018). These “gagging orders” essentially prevent drug companies from revealing

information to the public in the case of a no-deal Brexit.

It is clear that the UK government desires to maintain the “deeply integrated trade and

economic relationship between the UK and EU after Brexit, and to provide legal certainty and

avoid disruption for business and consumers with respect to the continued availability of goods

in the EU and the UK” (Gough, 2017, 1). It is important to avoid “duplicative compliance

activity after exit” namely re-inspecting approved manufacturing plants or collecting and re-

submitting clinical trials data (Gough, 2017, 1).

Key Distinctions between US and UK

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Streamlining the regulatory process to ensure efficacy and evaluate safety are crucial for

the introduction of new therapeutics to market. Unaffordable drug pricing impact not only the

patient, but also affect the overall cost of health care. Over the past decade, there have been

efforts to harmonize the regulatory processes of the FDA and the EMA. An in-depth

understanding of the regulatory procedures in the US and UK can guide resource allocation,

facilitate advances in novel treatments, and “ultimately optimize patient care” (Howie et al.,

2013).

A common concern is that regulation hampers drug development and slows approval

timeline since pharmaceutical companies incur costs in their “efforts to meet clinical research

requirements that may be excessive and duplicative” (Howie et al., 2013). Accelerated approval

pathways, advanced by both the FDA and EMA, are frequently utilized by drug manufacturers.

The goal of the accelerated pathways is to shorten the time from application to approval for

therapies that treat diseases whose morbidity and mortality are significant and for which there are

few effective alternatives available on the market. In the US, Section 901 of the Safety

Innovations Act (FDASIA) passed in 2012 permits use of surrogate endpoints such as

progression-free survival (PFS) rather than overall survival (OS) within the accelerated pathway

which allows “demonstration of efficacy within a shorter period of time” (Howie et al., 2013). In

order to be considered for accelerated approval, the clinical trials must meet the surrogate

endpoint and after approval, confirmatory phase IV trial data must be provided to verify the

clinical benefit. Regorafenib, a treatment for metastatic colorectal cancer, “was approved by the

FDA just 3 months after it became eligible for accelerated approval” (Howie et al., 2013).

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Despite similarities in the pathways used for accelerated approval, the agencies differ

when it comes to time to approval and the marketing of new treatments. Some argue that the

EMA’s processes allow for faster approval than those of the FDA, but recent data suggests that

the FDA typically approves drugs more quickly than the EMA (Howie at al., 2013). This is a key

point of difference between the FDA and EMA. The FDA is responsible for scientifically

evaluating new drugs and issuing market approval. In contrast, “the scope of the EMA’s

Committee for Medicinal Products for Human Use (CHMP) is limited to the scientific evaluation

of therapeutics” (Howie et al., 2013). After approval from CHMP, the EMA works with the

European Commission (EC) to bring the agent to market. This decoupling of the scientific

approval process and the marketing approval process leads to additional delays (Howie et al.,

2013). Until the drug the marketed and prescribed, the pharmaceutical companies cannot collect

revenue since patients do not have access to the treatment. There are practical patient care and

financial differences between the two approaches in the US and UK.

As addressed earlier, “in the UK, new drugs are licensed through the Medicines and Healthcare products Regulatory Agency (MHRA) or go through the EMA. If the treatment is approved by the EMA, it then must be approved by the MHRA in order to be marketed in the UK. In addition, the National Institute for Health and Care Excellence (NICE) must then evaluate the agent for both efficacy and cost concerns in order to determine whether the agent that has been approved for sale by the MHRA will actually be purchased by the National Health Service (NHS)” (Howie et al., 2013).

While significant steps have been taken to harmonize and align regulatory practices for

drug approval and marketing, there remain differences in decisions made by the FDA and the

EMA impact accessibility of novel treatments. However, differences between agencies with

regard to time to approval appear to be shortening, and alignment is increasing as a result of

ongoing and deliberate efforts (Howie et al., 2013).

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Conclusion

Although there are many similarities between the drug approval process in the US and

UK, there are differences between the approaches “rooted in the historical origins and

commissions of the” responsible agencies (Van Norman, 2016). One major distinction is that

while the FDA was founded as a centralized consumer protection agency, the UK system was

established from the need to standardize commercial rules across EU member states.

Consequently, the FDA is often characterized as prioritizing consumer safety at the expense of

commercial enterprise. Conversely, the European system is accused of “being primarily

concerned with preserving commercial interests to the detriment of patient safety” (Van Norman,

2016).

Despite assertions that approval time is significantly longer the US, studies indicate that

drugs reach the commercial market at a faster rate than they do in the UK. However, for devices,

approval timeline in the US is slower compared to that of the UK. Since there is no European

clearinghouse that reports these specific data, it is difficult to analyze “lag time” between the

processes, but a 2012 report published by Boston Consulting Group cites a lag of three years

(Van Norman, 2016).

It is also important to note that “approval does not equate with availability to patients”

(Van Norman, 2016). Despite longer regulatory reviews in the US, the period of time from

application to clinical availability is shorter in the US. This can be attributed to the length of

reimbursement approval once a drug is approved in the UK (Van Norman, 2016). The approval

processes conducted by the FDA and EMA are similar, however, the systems differentiate after

approval from the centralized agency. In the US, once the FDA approves the drug, there is a

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smooth transition to market availability. However, in Europe, drug companies must obtain

reimbursement approval in each country. Due to the existence of centralized universal health

insurance programs, in this case the National Health Service (NHS), the UK government

negotiates the price of the new treatment with the pharmaceutical companies to ensure the

market price is appropriate. The drug manufacturer is required to negotiate the price with each

EU member state prior to public availability. Recently, there have been efforts to standardize and

establish regulatory consistency between the US and UK. For example, “recent legislation in the

U.S. Congress facilitates release of drugs that have already achieved European approval” (Van

Norman, 2016). Common concerns between the US and UK approval requirements highlight the

need for mutual cooperation, stronger regulations, and increased transparency in the

pharmaceutical sector.

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