US Government Shutdown Raises Concerns in Pharmaceutical Industry as it Risks Delay in FDA Approval of New Drugs

As US government shutdown has stretched to a record 32 days, the United States Food and Drug Administration’s (USFDA) lack of funding has threatened the delay in approval of potentially lifesaving drugs. USFDA Chief Dr. Scott Gottlieb cautioned that FDA faces the risk of running out of funding, if the budget impasse doesn’t resolve soon.

The government shutdown refers to US President Donald Trump’s refusal to sign off on federal government funding if the Democrats in the US Congress don’t co-operate in passing $5.7 billion for building a wall on the Mexican border. The Democrats, being a majority in House of Representatives, are refusing to sign on the border agreement while blaming the President for delay in salary of 800,000 federal employees.

FDA relies on the fees from industry for 45% of its budget while the rest comes from the federal government, however as the drug regulator is not accepting any new applications or fees for approval during the shutdown, its current funding will last for another month before it is forced to delay applications and curtail reviews. The approval process involves several months from initial application, processing, review and final result. 10 drug makers are expecting their results by March this year, but if the FDA falls short of funding in the next four weeks these decisions may be delayed for a while.

Pharmaceutical companies face the challenge of launching new innovative drugs in the market to stay in business as well as balancing burgeoning costs involved in research and development and approval process. The delay is not only impacting companies with pending drug approvals but also others waiting for the shutdown end for filing applications. Brain Skorney, a senior biotech analyst at Robert W. Baird said that the delay is harming pharmaceutical companies as potential for generating revenue through new approved drugs is deferred while the costs continue.

The Johnson & Johnson Company has submitted its application for the approval of Esketamine nasal spray for treating treatment-resistant depression in young adults. The company which submitted its application in September 2018 is waiting for approval by March 2019. J&J’s Chief financial officer Joseph Wolk said that the government shutdown has delayed some FDA meetings but the company is hopeful that the drug would receive approval by March 4, 2019. He added that they expect the shutdown to end soon and that they are monitoring the situation closely.

A California-based biotech company Aimmune Therapeutics submitted its application for the approval of an experimental immunotherapy for treating peanut allergies a day before the shutdown started. The company’s regulatory filing states that FDA is holding on the review of its treatment until the shutdown ends.

The companies which received their approvals during the month long shutdown includes Exelixis for its drug Carbometyx which treats liver cancer and Abbott Laboratories for a device to treat heart defects. Swiss Drug maker Novartis denied any considerable impact of the shutdown on the application process however added that they are monitoring the situation closely and evaluating all their future projects in case the shutdown continues.

Author: Sabyasachi Ghosh

Sabyasachi Ghosh is an experienced market research analyst and consultant, with over six years of experience in end-to-end project management. He has worked at numerous leadership positions and has a vast experience of compiling high-quality market research reports. Sabyasachi is an authoritative voice in the market research sector, and has been cited in top industry publications. He is a travel junkie, and loves to travel far and wide with his friends.