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Complete Response Letters (CRLs): Big Trouble for Small Pharma

A Complete Response Letter (CRL) can have a devastating effect on a small company’s share value, as evidenced by the recent examples of Recro Pharma and Cosmo Pharmaceuticals.

A recent EP Vantage analysis of publicly-reported Complete Response Letters (CRLs) issued by the FDA from 1 January 2017 until 30 May 2018 had surprising results. The analysis found that small companies received most of the CRLs issued during this period, of those that were publicly reported. In a joint effort with EP Vantage, Camargo analyzed the results and discovered another surprising fact: 80% of the CRLs issued for drug products were to companies planning to utilize the 505(b)(2) regulatory pathway for US FDA approval, and all of the 80% were small companies.

The US 505(b)(2) regulatory pathway allows reduced cost, risk, and time to approval because of the ability to utilize existing data. However, the publicly available data must be of a standard acceptable to the FDA, with an appropriate bridging strategy and justification to a standard acceptable to the FDA, in order to realize the benefits.

So why are smaller small/specialty pharma companies struggling to get first cycle 505(b)(2) approvals? Several factors may be involved in the overrepresentation of small pharma in the CRL list.

  • Regulatory expertise: EP Vantage suggests smaller companies struggle to recruit staff with appropriate regulatory expertise.
  • Lack of Familiarity: A perception that approval of a new indication or dosage form of an approved drug will be straightforward. This can be an overly optimistic judgement without appropriate and extensive 505(b)(2) regulatory expertise. Problems can arise with CMC, bridging, and justifying public data that are not encountered in traditional 505(b)(1) programs. More on this later.

Here we take a closer look at who received the CRLs and what the deficiencies were.

What Is a Complete Response Letter?

A CRL ‘reflects FDA’s complete review of the data submitted’ in an NDA or ANDA application, and the subsequent finding that the FDA cannot approve the application ‘in its present form’ (21 CFR §314.110). A CRL details the reasons that the submission has been found to be inadequate, and hopefully includes recommendations from the FDA on what the Sponsor will need to do to address the deficiencies.

The use of Complete Response Letters was codified for drugs in 2008 (21 CFR §314.110) and earlier for biologics. CRLs replace the previous system of ‘approvable’ or ‘not approvable’ letters for drug products.

Who Received Complete Response Letters?

In the period from 1 January 2017 to 30 May 2018, the list of applications assembled by EP Vantage contained 33 applications for which the FDA issued a CRL. The list did not include supplemental NDAs. Of these 33 applications there were:

  • 6 biologic products (4 potential biosimilars and 2 products attempting to obtain a Biologic Licensing Application i.e., new biologic products)
  • 2 complex generics (ANDAs; both used Advair Inhalant as their reference product)
  • 25 new drug applications (NDAs) — consisting of 4 New Molecular Entities (NMEs) and 21 non-NMEs.

Notably, of the 12 applications consisting of biologics, complex generics, and NMEs, all but 2 were from large pharma. The remaining 21 applications were for non-NMEs, and all but one are/were seeking approval via the 505(b)(2) pathway.

All 21 of the non-NME NDAs attracting CRLs were from smaller pharmaceutical companies, according to the company size classification system applied in the EP Vantage analysis.

Number of Complete Response Letters by Approval Type

In an earlier analysis, Camargo noted that approximately fifty percent (49.2%) of products approved via the 505(b)(2) pathway in 2017 were submitted by Sponsors that had 4 or fewer approved products in the US, and for 30% of products, the 505(b)(2) product approval was the only FDA-approved product that the company had. At the other end of the spectrum, only 23.8% of the 505(b)(2) products approved were from large pharma (defined as having had more than 100 products approved by the FDA).

It must be noted that the time period for the more recent analysis extends until May 2018 versus the calendar year 2017 in our earlier analysis, and that the metric for classifying large and small companies in both analyses are different. With these caveats in mind, small companies apparently achieve half of the 505(b)(2) approvals yet receive a disproportionately high number of CRLs prior to approval.

The actual number of 505(b)(2) submissions or CRLs is not known since privately held companies do not have to share this information.

Why Are Smaller Companies Struggling with 505(b)(2) Approvals?

There are two main reasons why smaller companies receive a higher rate of Complete Response Letters for their 505(b)(2) products than larger pharma.

  1. Smaller companies often submit more complicated 505(b)(2) approvals than larger pharma, who are more likely to focus on minor changes to dosage forms, excipient changes, or changes to the release profile of a product.

In contrast, smaller companies tend to develop more drug-device combination products, new indications, or changes in route of administration to approved products (Camargo internal data). While all of the changes mentioned above can be challenging depending on the circumstances, typically the more complicated products need more attention to CMC, human factors studies, and clinical strategy to obtain a first cycle 505(b)(2) approval.

  1. The regulatory nuances of the 505(b)(2) pathway are often underappreciated, causing investors and regulatory teams more familiar with 505(b)(1) submissions to believe that if a drug is already approved in a different form, approval of the proposed product will be straightforward. This problem can also apply to larger companies.

While the 505(b)(2) pathway offers the advantage of using existing information, knowing how to use it properly is important. This requires experience with the 505(b)(2) pathway. The problem is compounded further with the level of complexity of the product.

To demonstrate these points, we looked at the type of products that received CRLs in the period from 2017 until the present. Eight drug products contained a device component, 2 products represented a change in dosage form from an immediate-release to an extended release implantable insert, at least 2 were fixed-dose combinations (2 and 3 APIs), and at least 5 products were for a new indication and/or route of administration. More details on these products will be available when and if they are approved.

Reasons for the CRLs

Although some companies did not share the details of the deficiencies noted in the CRL for their application, 14 of 21 (67%) did. CMC issues were common (at least 6 applications), as we have previously blogged. Requirements for additional human factors and usability engineering studies were reported for 3 products (watch out for our blog on this soon). Two applications required a more robust analysis of their clinical data to obtain approval. At least 5 (and probably more) of the Sponsors of the applications were requested to conduct additional clinical studies for approval.

Although company press releases don’t typically list the specific CMC deficiencies, both public and privately held companies often bring their CRL letters to Camargo to get the issues resolved. A common CMC deficiency noted for smaller companies is differences between the formulation used in the bridging study versus the commercially viable formulation. While the company may have saved money on formulation development prior to proof of concept studies, receipt of a CRL demonstrates that this was a false economy.

Another common CMC deficiency is assuming that FDA standards do not need to be met for a 505(b)(2) application as the company can rely on data for the Listed Drug. If CMC advice from a 505(b)(2) expert is not obtained prior to NDA submission, a CRL will dispel this belief.

A CRL that requests new clinical studies for a 505(b)(2) application is usually one of two problems. An assumption that less evidence of efficacy or safety is required for approved drugs, or a failure to use and justify the existing information.

Many of these issues could have been foreseen and dealt with constructively prior to NDA submission. A well-planned 505(b)(2) strategy, and productive communication with the FDA at milestone meetings throughout development will bring many of these issues to light before a CRL becomes necessary.


While smaller pharmaceutical companies received almost all of the CRLs for new drugs, this may be in part attributable to the more innovative and/or complicated products, and in part due to regulatory and CMC staff that lack experience with the 505(b)(2) pathway.

It is sometimes possible to muddle through the regulatory process without specific 505(b)(2) experience, often with a larger development program than necessary. But if avoiding a CRL is important to your bottom line, let Camargo help with 505(b)(2) development strategy including regulatory, device-specific, and CMC advice. Contact us.


Angela Drew, PhD, Product Ideation Consultant, Camargo Pharmaceutical Services.


The CRL list was provided by Amy Brown, Senior Reporter, EP Vantage. Amy’s original article entitled “Are Small Companies Carrying The Complete Response Letter Can?” can be found here.