In a striking reversal from 2024, large European pharmaceutical companies secured 13 FDA approvals while their eight largest US counterparts received only four. No single US company had more than one new drug approval, highlighting a significant performance gap and a potential shift in R&D pipeline productivity between the two regions.
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The pharmaceutical industry's focus on rare diseases has intensified, with 57% of all novel drugs approved in 2025 designated as orphan treatments. This is a continued increase from prior years, indicating a strategic shift towards smaller patient populations with high unmet needs, as exemplified by three different drugs for Hereditary Angioedema (HAE) being approved within ten weeks.
Despite significant layoffs and leadership changes early in the year that caused delays, the FDA dramatically increased its output, approving nearly twice as many drugs in the second half of 2025 as the first. This suggests the agency adapted and found a new, more efficient footing after an initial period of disruption.
A key trend in 2025's drug approvals is that "best-in-class" therapies are distinguished not just by efficacy, but by innovations in formulation and delivery that improve the patient experience. Examples include subcutaneous versions of IV drugs and new delivery methods that expand patient access.
Despite widespread concern about political disruption at the FDA, key metrics for innovation in new drug approvals—such as first-in-class drugs and new targets—were almost completely flat in 2025 compared to previous years. This suggests the core regulatory engine has remained consistent, for now.
The FDA now allows a single, well-designed pivotal trial instead of the traditional two. This reform significantly cuts costs by $100M-$300M and shortens development timelines, enabling companies to test twice as many potential drugs with the same capital.
The FDA is predicted to approve new PARP inhibitors from trials like AMPLITUDE only for BRCA-mutated patients, restricting use to where data is strongest. This contrasts with the EMA's potential for broader approvals or denials. This highlights the diverging regulatory philosophies that create different drug access landscapes in the US and Europe.
The STARGLO trial (glofitamab-gemox) showed a strong survival benefit in Asia-Pacific patients but not in the small North American cohort. This geographic discrepancy, with only 9% of patients from the US, was a key reason the FDA did not approve the combination, while European agencies did.
Amidst growing uncertainty at the US FDA, biotech companies are using a specific de-risking strategy: conducting early-stage clinical trials in countries like South Korea and Australia. This global approach is not just about cost but a deliberate move to get fast, reliable early clinical data to offset domestic regulatory instability and gain a strategic advantage.
Morgan Stanley projects a dramatic increase in China's contribution to global medicine, with assets developed in China expected to represent about a third of all new US FDA approvals by 2040, a significant rise from just 5% today.
The industry's negative perception of FDA leadership and regulatory inconsistency is having tangible consequences beyond investment chilling. Respondents report actively moving clinical trials outside the U.S. and abandoning vaccine programs. This self-inflicted wound directly weakens America's biotech ecosystem at the precise moment its race with China is intensifying.
