The Supreme Court today will hear a challenge to the FDA's approval of mifepristone, a medicine used to help induce abortions.
Why it matters: Were SCOTUS to rule in favor of mifepristone's opponents, it could chill future biotech investment for almost every medical indication.
Zoom out: The core question in the case is over whether the FDA has sole discretion to determine a drug's efficacy and safety, or if courts also can play a role.
- The former is how biotech has traditionally operated. It's not cheap, but at least the process is understood and uniform.
- Introducing the possibility of litigation creates costly new variables, to the point that investors may no longer think the reward is worth the risk. Particularly given that the timeline for challenging FDA decisions could be boundless.
Between the lines: Imagine court cases on everything from vaccines to Viagra to Ozempic. Or drugs whose development included the use of embryonic stem cells.
- All it would take is one sympathetic judge.
What they're saying: "I think it is a disaster," says Bryan Roberts, a longtime health care VC with Venrock. "What if a state had decided to outlaw the Covid vaccine when it came out? Or flip it around. What if a state wants to approve a drug that the FDA doesn't? Under this notion, isn't that also fair game?"
- "If the FDA loses in the Supreme Court, it would be a catastrophic event," adds Jeremy Levin, CEO of Ovid Therapeutics and former CEO of Teva Pharmaceutical. "Not just in America, but globally. FDA approvals are stamps of approval around the world, with many countries depending entirely on it. Plus the vast trade and economic issues for nations that buy medicines from America."
The bottom line: Venture capitalists have invested around $100 billion into thousands of U.S. biopharma startups since the beginning of 2000.
- SCOTUS isn't being asked to rule on the future flow of such monies, but it might as well be.
