The FDA Wants to Approve Your Drug Faster. There's a Catch.
FDA Commissioner Marty Makary is rewriting the rules of drug approval: one trial instead of two, AI-powered reviews, and a new pathway for ultra-rare diseases. The biotech industry loves the vision, but Wall Street isn't sure the execution can keep up.
One Trial to Rule Them All
For decades, the unwritten rule of getting a drug approved looked something like this: run two big clinical trials, cross your fingers, and wait. A lot. Commissioner Marty Makary wants to tear up that playbook.
The FDA's new default policy flips the old standard on its head. Instead of requiring two pivotal trials to prove a drug works, one well-controlled study plus supporting evidence (think real-world data or strong mechanistic backing) is now enough. And the burden has shifted, too. It used to be on the drug company to justify why a single trial should suffice. Now it's on FDA reviewers to explain why they'd demand a second one.
This isn't technically brand new territory. The agency has approved drugs off a single trial before, especially in oncology and rare diseases. In fact, 66% of novel drugs approved in 2024 already relied on just one pivotal study, according to an AgencyIQ analysis. But making it the official default across all therapeutic areas? That's a different animal entirely.
The "Trust Me, It Works" Pathway
Makary's second big swing targets the smallest patient populations. On February 23, the FDA released draft guidance for a "Plausible Mechanism" framework, designed for ultra-rare diseases and individualized therapies like bespoke gene-editing treatments.
The logic is almost philosophical: if you're treating a disease that affects, say, 50 people on Earth, you can't exactly run a 10,000-patient randomized trial. So this framework lets developers lean on non-clinical studies, small patient groups, and a convincing biological explanation of why the drug should work. No new approval pathway is being created; the framework just gives the agency a formal structure for accepting less traditional evidence.
Makary co-authored the intellectual groundwork for this approach in a 2025 New England Journal of Medicine article alongside CBER Director Vinay Prasad. It's the rare regulatory policy that started as an academic argument and became actual guidance within a year.
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While the headline-grabbers are about novel drugs, Makary has been quietly reshaping the biosimilar landscape, too. Biosimilars are the generic-drug equivalent for complex biologics, and getting them approved has historically been expensive, slow, and frustrating.
Back in October 2025, the FDA eliminated the default requirement for comparative efficacy studies in biosimilar development. Companies can now lean on analytical testing, pharmacokinetic studies (how the drug moves through the body), and immunogenicity assessments instead. The estimated savings: roughly $24 million and one to three years per product.
A follow-up guidance in 2026 went further, streamlining pharmacokinetic testing requirements when justified. That could cut development costs by another 50%, saving around $20 million more. For an industry that's supposed to be driving drug prices down through competition, removing these bottlenecks is a pretty big deal.
AI Enters the Chat
As if overhauling evidence standards weren't enough, Makary wants machines doing some of the paperwork. The FDA has piloted using AI to handle filing reviews, a process that currently takes months. Early results suggest it could take minutes.
And for drugs deemed national priorities, a new Commissioner's National Priority Voucher program promises review turnarounds of one to two months, not the usual many months.
Wall Street Is Cautiously Optimistic (Emphasis on "Cautiously")
You'd think biotech investors would be popping champagne. Faster approvals, lower development costs, fewer redundant trials: it reads like a wish list. But the analyst community has been more measured than you might expect.
RBC Capital Markets analyst Brian Abrahams acknowledged the positive potential for reducing timelines and costs. In the same breath, though, he warned that "volatility in leadership and uncertainty around development adds risk to investments." Translation: the policies sound great on paper, but unpredictable execution makes it hard to model.
BMO Capital Markets analysts pointed to a concrete example of this tension. Disc Medicine's bitopertin applied through the national priority voucher program and got rejected, despite prior agreements with the FDA on its data package. That kind of inconsistency makes companies (and their investors) nervous. A similar review delay hit Eli Lilly's orforglipron.
The broader pattern is one of mixed signals. Makary publicly commented on UniQure in a way that sent the company's shares tumbling. For a commissioner promising streamlined predictability, the early track record has been bumpy.
The PDUFA Elephant in the Room
All of these reforms are unfolding against the backdrop of PDUFA VII reauthorization, the five-year renewal of the user fee system that funds most of the FDA's drug review operations. The current authorization expires September 30, 2027, and in May 2025 the FDA published Federal Register notices announcing a public meeting as part of the preliminary public engagement process.
The FDA must submit its final recommendations to Congress by January 15, 2027. Industry trade groups have been pushing for greater predictability in regulatory timelines and better communication between the FDA and sponsors during the review process. Given Makary's ambitious reform agenda, the PDUFA talks will be where theory meets budget reality. Faster reviews require more (or better-equipped) reviewers, and that costs money.
Who Stands to Win?
If these policies stick, late-stage biotech companies are the obvious beneficiaries. Several are already riding expedited pathways into potential 2026 approvals. Denali Therapeutics has a BLA under priority review for tividenofusp alfa, targeting Hunter syndrome (MPS II) with no new treatment in nearly two decades. Vertex Pharmaceuticals could file for accelerated approval of povetacicept for inflammatory kidney conditions based on interim Phase 3 data.
Smaller names are benefiting too. Oncolytics Biotech and Siren Biotechnology both received Fast Track designations in February 2026 for their respective oncology programs. That number of companies using expedited pathways seems likely to climb.
The Big Picture
Makary is betting that the FDA has been asking for too much evidence, for too long, at too high a cost. He's probably right that some trials were redundant. The question is whether "one trial plus supporting data" will catch everything that a second trial would have caught. Because when a drug gets approved faster and it works, everyone celebrates. When it gets approved faster and it doesn't, everyone asks who cut corners.
The biotech industry is getting the regulatory environment it's always wanted. Now it has to prove it deserves it.
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