A friend recently asked me what I was most excited about in the biotech industry, outside of what I’m working on. I paused for a minute, and then realized that I’m unfortunately not excited about much right now. I realized, sadly, that a lot of focus right now is on follow-on drugs for well-trodden indications that are lower risk. The problem is one of incentive structure: we are witnessing a decisive shift toward de-risked commercial spaces. Pharmaceutical companies are prioritizing follow-on treatments for established, well-trodden indications. These areas offer safe returns and clear regulatory pathways, but they sideline pioneering work and leave behind patients with rare and underserved diseases.
The obesity market best illustrates this paradigm shift. For decades it was unclear whether drugs could ever be approved for weight loss. Now, post-GLP-1 approval, the floodgates have opened, targeting a large global population with a high willingness to pay. The market’s momentum is staggering: sales, already nearly $16 billion globally, are projected by some estimates to top $150 billion by 2035. This financial landscape naturally incentivizes rapid, incremental innovation, such as oral GLP-1s and the next generation of "Triple G agonists" targeting glucagon, GLP-1, and GIP, which promise even greater efficacy.
Meanwhile, technologies that were groundbreaking and offered potential to treat fatal and debilitating genetic diseases have stalledunder the weight of heightened regulatory scrutiny and clinical risk. Several gene therapies were linked to fatalities this past year, leading to questions regarding risk/benefit analysis, as seen with the controversy surrounding Sarepta's Elevidys (DMD gene therapy). As a result, a number of products were pulled from the market, and many clinical trials were halted. Additionally, regulatory uncertainty for rare and ultra-rare conditions with zero treatment options available has increased, with rare disease treatments for devastating conditions refused by FDA after drawn-out regulatory processes. This year alone, FDA delayed and then rejected drugs for Barth’s Syndrome, Sanfilippo Syndrome and pyruvate dehydrogenase complex deficiency (PDCD). These technologies are exciting and hold huge potential for patients, but represent existential risk for drug developers because the regulatory goalposts appear to be moving—an FDA non-binding agreement early in development can be overturned later in the approval process.
Ironically juxtaposed to this is the skinceuticals industry. With minimal government oversight, the primary barriers to market entry are effectiveness and consumer willingness to pay, which has allowed technological advancement to move at the speed of innovation. For example, last year, several companies launched exosome-based skin products. Exosomes are recently-discovered cell-based transport vesicles containing proteins and RNA that are used to signal within a cell and from one cell to another. Stem-cell derived exosomes are believed to have regenerative and anti-inflammatory properties and once absorbed by the skin can protect and rejuvenate skin cells. Originally, stem-cell derived exosomes were developed to treat devastating diseases, such as neurodegenerative diseases and pediatric heart failure. However, the uncertainty of a new regulatory pathway alongside the high cost of clinical trials has been prohibitive thus far. Next up: mitochondrial products that deliver energy-generating capacity directly to the skin.
The current incentive structure is clear: low-risk, high-return markets are being saturated, while the highest-impact therapies for devastating diseases are left stranded due to unpredictable regulatory environments and soaring development costs.
As a scientist and a woman in my forties, I’m happy that my skin will benefit from biological innovation, but I’d rather see children with rare diseases access treatments they desperately need. We need to take a close look at the structures in place to fund and approve new drug treatments and evaluate how we are incentivizing innovation in the pharmaceutical industry. If regulatory guidelines remain volatile and non-binding, it only incentivizes companies to pursue drugs for diseases that already have treatment options and a clear path to market. Meanwhile, the high cost for development of new drugs leads to exceedingly high drug prices, which threaten to bankrupt governmental healthcare programs like Medicare and Medicaid. If we don’t change the system, we risk falling behind on innovation and losing sight of where innovation is needed most – saving lives.
Dr. Shoshana Shendelman, PhD is a scientist and entrepreneur who has founded numerous biotech companies. She is a pioneer in the development of drugs for rare and underserved diseases. Currently she is Vice Chair of the Board of Advisors at Columbia University Medical Center and Columbia University Vagelos College of Physicians and Surgeons.
