Investors could be confused by new US drug reviews

The US Food and Drug Administration's new drug review response system could confuse investors, according to some analysts. The agency is switching from the three tiered "approval," "approvable" and "not-approvable" letters (Marketletters passim) to a "complete response" letter in cases where a drug is not immediately approved.

Moningstar analyst Damien Conover told Reuters that the new format may "not give as much visibility to the direction the FDA is going." He argues that, by no longer distinguishing between the "approvable" and "non-approvable" layers of response, that investors will no longer have a clear cut idea of which drugs are more likely than not to clear the US regulator's review process quickly.

However, the old system was criticized by some drug firms and analysts because the "non-approvable" term implied that a drug had failed outright, which need not be the case, and "approvable" did not always indicate the same level of additional data that drugmakers might have to supply.