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FDA: Helping Small Businesses Get Big Results

Small companies have a significant effect on U.S.-made pharmaceuticals

Published: Wednesday, April 19, 2017 - 12:01

It is well known that small business is vital to the success of the U.S. economy. Less known, though, is how instrumental it has been to the growth and innovation in drug development.

We may think of the pharmaceutical industry in terms of giant corporations, but the fact is that there are hundreds of small firms—with very few employees—that are developing many of the important drugs that we use every day. The U.S. Food and Drug Administration (FDA) defines a small business as one with fewer than 500 employees (including employees of affiliates), but many are much smaller.

Industry sources indicate that, during the past decade or so, more than half of the novel drugs (i.e., those not previously marketed in the United States) developed in this country and approved by the FDA, have been developed by small companies. Small companies also affect the generic drug industry, creating market choice, competition, and increased access. According to FDA data, of the 2,176 new and generic drug applications submitted to the agency in 2014–2015, at least 639, or about 29 percent, were submitted by firms with fewer than 500 employees.

Small companies have certain advantages. They can be nimble with decision making and can quickly progress with new ideas. A smaller drug-development pipeline allows them to focus on a single or few products. But they also have unique challenges. A small workforce tends to require employees to wear multiple hats, as opposed to their larger counterparts who typically employ teams of specialists. And because many small companies are focused on developing one drug at a time, they often operate on a “high-reward, high-risk” model. There is a smaller margin for error for a small company that has invested all its resources in developing one drug than for a large company that is able to spread its risk across several products it is developing simultaneously.

For many years, to help level the playing field, the FDA has been assisting small pharmaceutical companies to maximize their opportunities for success. The Generic Drug Forum on April 4–5, 2017, is one example of the work the FDA does to support small businesses. Organized by the FDA’s Center for Drug Evaluation and Research (CDER) Small Business and Industry Assistance (SBIA) staff, representatives from a wide range of pharmaceutical companies gathered to learn about the development, testing, review, and approval of generic drugs. The CDER SBIA holds at least four meetings a year as part of a series called the Regulatory Education for Industry (REdI) conferences.

REdI conferences typically attract significant international attendance (in person or via webcast). This global reach is important because about 80 percent of active pharmaceutical ingredients used in U.S.-manufactured drugs come from more than 150 different countries. The map below shows the geographic distribution of our most recent REdI conference registrants. Thirty percent of registrants were from outside the United States, representing 55 countries worldwide.


International participation at CDER SBIA REdI conference (September 2016)

Many of these companies have never submitted an application for approval to the FDA. Whether new or experienced, many are very early in the drug development process. In CDER’s SBIA program, 43 percent of the companies have fewer than 100 employees, and 17 percent have fewer than 10 employees.

Although the mission of CDER SBIA is to help small businesses, its educational products are available to the entire pharmaceutical industry. In addition to REdI conferences, SBIA also offers webinars with live question-and-answer sessions by FDA subject matter experts on timely topics of interest to small companies.

The CDER SBIA recently held a half-day live webinar, which featured CDER experts from the Office of Pharmaceutical Quality discussing specific microbiology issues. CDER SBIA also provides a variety of helpful resources, including a bimonthly electronic newsletter, CDER SBIA Chronicles, an audio podcast, CDERLearn, and online tutorials developed by CDER subject matter experts. It also interacts with its constituents through presentations and exhibits at conferences, and assistance is always available to help out via phone and email. All slides, webcasts, and documents that it develops to help small companies are posted on the CDER SBIA Learn web page after the event.

REdI conferences and all other SBIA services are available at no cost to all who wish to attend and participate, which is particularly helpful to smaller companies with limited resources.

At a time when quality manufacturing and the safety and effectiveness of drugs in development is as important as ever, CDER understands that providing support to small businesses through education and resources is vital to advancing innovation and protecting public health.

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About The Authors

Brenda Stodart’s picture

Brenda Stodart

Brenda Stodart, Pharm.D. Captain, United States Public Health Service, Program Director at the FDA’s CDER Small Business and Industry Assistance Program, Division of Drug Information.

Renu Lal’s picture

Renu Lal

Renu Lal, Pharm.D., pharmacist at FDA’s Division of Drug Information, CDER Small Business and Industry Assistance Program.