The Impact of Breakthrough Therapy Designation on Drug Safety

The long drug approval process in the United States imposes significant development costs on firms and delays access for patients, especially when a therapy that addresses a condition with no existing treatments shows early promise. To shorten approval timelines, the Food and Drug Administration (FDA) has instituted expedited pathways that are designed to bring the most promising therapies to patients more quickly. In this paper, we study the safety implications of the newest of the four expedited pathways: The Breakthrough Therapy Designation (BTD) program. We also examine the effectiveness of Risk Evaluation and Mitigation Strategies (REMS) and the Boxed Warnings (BW)—two pharmacovigilance tools that the FDA uses to mitigate the safety risks. To conduct our study, we compile a unique dataset of 327 drugs approved by the FDA between 2012 and 2019. We measure drug safety as the number of serious adverse events associated with a drug in a year. Results from the instrumental variable analysis show that BTD drugs incur 1,722 additional serious adverse events in a year (equivalent to 2.7 times the average annual serious adverse events) compared to non-BTD drugs. We find that REMS substantially reduces this safety gap, but BW does not. Specifically, BTD drugs with REMS record 875 fewer serious adverse events per year than BTD drugs without REMS. By revealing the BTD program’s detrimental effects on drug safety and showing which pharmacovigilance tools effectively mitigate these hazards, we contribute to quality and new product development literatures, and provide actionable guidance to policymakers. We propose that the FDA should consider requiring REMS for all drugs approved with BTD status.