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Institute Report
Proliferation of Innovation Over Time
Frequency, timing and clinical value of expansions post-initial approval
Feb 18, 2025
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The Inflation Reduction Act’s Medicare Drug Price Negotiation Program represents a paradigm shift in drug pricing policy in the U.S. For drugs selected for maximum fair price (MFP) setting, the window for achieving returns is likely to condense as the MFP setting comes into effect at 9 years post-initial FDA approval for small molecules and 13 years for biologics. This changing dynamic suggests that clinical development post-initial approval may be adversely impacted. Understanding the historical trends in this development is crucial for assessing the potential effects of this policy on innovation and implications for stakeholders.

This report analyzes all novel active substances (NASs) approved between 2000 and 2023 to understand how the innovation of drugs evolves after the initial FDA approvals. To assess this proliferation of innovation, the report highlights the total share of drugs that have more than one FDA approval and the types of approvals received by such drugs. These types of approvals are classified across various categories such as new indication, different line of therapy, new patient population, NAS combination drug, NAS with prior-NAS combination, combination regimen, and new formulation. It also examines the time points and target indications across therapeutic areas of these approvals.

Key Findings



Exhibit 1: NASs by number of post-initial approved expansions and indications

  • Drugs are generally not finished with their innovation cycle with respect to therapeutic value at time of initial approval. More than half of NASs approved between 2000 and 2023 received at least one expansion post-initial approval. This trend was consistent across both biologics (47%) and small molecules (52%).
  • Post-initial approval expansions are common across therapeutic areas. These expansions were most frequent in respiratory, immunology and cardiovascular therapeutic areas with over two-thirds of NASs receiving at least one expansion. NASs received an average of at least two post-initial approval expansions in all therapeutic areas studied except for dermatology.


Exhibit 4: Expansions of NAS post-initial approval by time since first approval

  • Drugs can receive approvals for expansions several years after their first approval. Biologics on the market for 13 years and longer achieved only 31% of their lifetime approvals within the first year of approval. By 9 years, they had reached 67%, with the remaining 33% realized in subsequent years, including 15% after 13 years.
  • Small molecules on the market for 9 years and longer achieved just more than 35% of their lifetime approvals within the first year of approval. By 5 years, they had reached 66%, with the remaining 34% realized in subsequent years, including 15% occurring after 9 years.


Exhibits 5: Biologics and small molecules by type expansions over time

  • Post-initial approval expansions can offer meaningful clinical benefits for patients. Overall, 75% of the post-initial approval expansions of a drug are focused on new patient populations and indications. An estimated 87% of expansions post-initial approval for biologics fall into these two categories while the equivalent number for small molecules is 69%.


Exhibit 6: Percentage of expansions with FDA designations!

  • Of the expansions received by 446 NASs totaling 1,458, 29% were for orphan drug populations. Further, 7% of the expansions were granted accelerated approval, 16% had priority review, 6% had fast track designation, and 9% had breakthrough designation.
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