Rush to Phase 1: Considerations for Initial Regulatory Interaction

As biotech companies approach Phase 1 clinical trials, questions often arise concerning where studies should be initiated, considering factors such as study start-up, Regulatory Authority review timelines, patient populations, and, more recently, concerns over perceived instability with the FDA. Halloran has seen the uncertainty of early 2025 due to the Reduction in Force, leaving many Sponsors to evaluate Ex-US options for Phase 1 trials, whether that be EU, New Zealand, Australia, or China.  

Over the last decade, Phase 1 trials in China have seen a significant uptick in frequency due to the speed at which companies can initiate their studies. This expansion by China has been noted by significant year-on-year growth in the number of clinical trials initiated (Citeline 2024 White Paper), and has raised concern in the United States, as noted by recent discussions from the Senate Health, Education, Labor and Pensions committee (Medill on the Hill).  

This continuing development is clearly at the top of Dr. Makary’s mind as the FDA begins its User Fee negotiations for PDUFA VIII. Dr. Makary’s recent comments, “If your Phase 1 trial is not in the United States, maybe you should pay a higher user fee,” Makary said at a supply chain resiliency meeting at the National Academies of Sciences, Engineering, and Medicine. The concern from Dr. Makary does not rest solely with Phase 1 trials, as the FDA has previously expressed concern over clinical trials supported solely by Phase 3 data from China due to representability concerns for the US population. Now, Dr. Makary has further noted concern over whether the Phase 3 data could be trusted.  

What is unclear at this stage is whether these changes are what the FDA will seek in PDUFA negotiations, if there could be tiers to this fee depending on the location of the Phase 1 study, or if this is simply a negotiation tactic. However, to de-risk development, Sponsors must begin to take these potential changes into consideration. While the risk to small biotech posed by the increased User Fee cost may be mitigated by some Sponsors entering into partnerships with larger pharmaceutical companies, the acceptability of Phase 3 data from China by the FDA would be more difficult to mitigate. The uncertainty of these potential policy shifts only further amplifies the need for a sound Regulatory and Product Development strategy to derisk development by evaluating the pros and cons of each regulatory application and interaction for a Sponsor’s specific product.   

Whether these changes occur as part of PDUFA or to what extent, and if there is any reciprocation by China, it will be important to follow closely. Dr. Makary has shown a willingness during his tenure to consider new approaches to the challenges he perceives in drug development. While the FDA has been through a significant change in 2025, this development, in some ways, is more status quo for Dr. Makary’s FDA. Halloran will continue to follow and monitor this closely as it develops. If your company is interested in discussing your overall product and regulatory strategy, and how to best de-risk development involving global trials, don’t delay the discussion.

Contact Halloran, as we are available to offer real-world experiences and strategic advice to best de-risk your development program and position you for success.