Risk, Regulation and Strategy: A Multi-Case Study of the Botanical Drug Industry

Abstract

Regulation is a necessary part of life sciences as it ensures product quality and patient safety. The Food and Drug Administration (FDA) is the regulatory agency which facilitates patient safety by ensuring quality and efficacy of all drugs which are on the market in the US. The FDA botanical drug development pathway is a relatively new route to market offered to firms developing botanical-based polymolecular drugs. With only three approved botanical drugs to date, this market is still in its infancy. Achieving FDA approval for a botanical drug is a rigorous capital-intensive activity, but without approval these products cannot be sold on the US market. Effective development strategies and risk mitigation techniques are important to any firm aiming to achieve regulatory success. There has however, been no research into development strategies and risk mitigation techniques for firms attempting to gain FDA approval for botanical drugs. Therefore, firms have little guidance to make effective decisions when developing their botanical drug candidates. There is rapidly growing global interest in the use of botanicals for human health, as botanicals are largely seen by consumers as ‘safer’ alternatives to conventional synthetic medicines. Therefore, this is an important area of research to facilitate market access and broader accessibility of botanical drugs to consumers. The purpose of this thesis is to gain insight into the major regulatory challenges faced by firms developing botanical drugs and understand how firms strategize and minimise risk when working towards FDA market approval. An exploratory qualitative research approach employing a multiple case study method was used to inspect these phenomenon. Purposive sampling and company benchmarking was used to identify cases, which were then built using in-depth semi-structured interviews and multiple secondary data sources. Three cases were built, each based on an international botanical drug development firm, who, at the time of writing had a different regulatory outcome: failed, on-going and approved. Through thematic analysis of the study data, this study identified nine important findings to inform firms of the major challenges faced when developing a botanical drug through the FDA approval process. These challenges majorly occured in the early stages of botanical drug development and included challenges in preclinical studies, lack of clarity on usage of previous human use data, communication with the FDA, financing the development process, management structures within the firm, strategic decisions on collaboration, choosing the indication, choosing the right development strategies and the right partners to mitigate risk. The challenges exposed in this study, triangulated with existing information from the literature, allowed for practical recommendations to firms developing botanical drugs and aiming for FDA approval. The overall recommendations to these firms focused around decisions that firms could take to improve regulatory success, particularly in early communication with regulators, strategic collaborations, aligning the firm management structure and using risk mitigation tools.