Under Trump, FDA Seeks To Abandon Expert Reviews of New Drugs

Current FDA leadership is significantly reducing its reliance on external expert advisory committees for individual drug approvals, a policy shift championed by George Tidmarsh, head of the Center for Drug Evaluation and Research. The agency justifies this by citing redundancy and enhanced transparency through published complete response letters, but critics, including former FDA officials, argue it will diminish public scrutiny, reduce scientific rigor, and consolidate power within the agency. This move could impact the predictability and perceived legitimacy of drug approvals, potentially affecting investment confidence in the pharmaceutical and biotech sectors due to less transparent and potentially more politicized regulatory decisions.

Analysis

The Food and Drug Administration (FDA) is enacting a significant policy shift by moving to eliminate the use of external expert advisory committees for individual drug reviews, a practice established in 1972. George Tidmarsh, head of the FDA's Center for Drug Evaluation and Research, states this is to reduce redundancy and workload, arguing that the new practice of publishing "complete response letters" (CRLs) provides equivalent transparency. This move is already in effect, with only seven advisory committee meetings held recently compared to 22 in the same period last year. However, this rationale is heavily disputed by former FDA officials, academics, and industry groups, who contend that these committees provide crucial scientific rigor, public scrutiny, and a forum for expert debate that the agency might otherwise miss. Critics, including former FDA Commissioner Robert Califf, highlight that this change consolidates power within the agency, potentially shielding decisions from public accountability and making the approval process more opaque and politicized. The controversy surrounding Biogen's (BIIB) Aduhelm approval, which went against a committee's 'no' vote, exemplifies the type of public debate that may now be suppressed. More recently, Capricor Therapeutics (CAPR) saw its planned advisory meeting for a Duchenne drug canceled before receiving a rejection, underscoring the immediate impact of this new policy on companies with complex or novel therapies.

Key Decisions for Investors

• Investors should increase the risk premium assigned to development-stage biotech and pharmaceutical companies, as the removal of public advisory committees introduces significant regulatory unpredictability and diminishes transparency for drugs facing complex approval decisions.
• Place a higher emphasis on the unambiguous strength and clarity of clinical trial data, as therapies with borderline or nuanced results will no longer benefit from the external validation and public debate that advisory committees previously provided before a final FDA decision.
• For directly affected firms like Capricor Therapeutics, the path to approval is now more opaque, warranting close monitoring of their ability to address FDA concerns without a public forum; for the broader sector, this policy adds a new due diligence requirement to assess the risk of less scientifically-vetted or more politicized regulatory outcomes.