The FDA Comes Around
Innovation in the health care sector is accelerating due in part to a more accommodating regulatory environment for new approaches to medical treatment. Tracking which companies are participating in novel drug manufacturing may be important for health care investors.​​

Chart showing the FDA is increasingly fostering innovation 

  • In an effort to foster competition through innovation, the Food and Drug Administration (FDA) has approved 168% more novel drugs in 2018 than in 2016.

  • Often perceived as a regulatory roadblock, the FDA has become a facilitator of innovation by trying to reduce the regulatory burden on new and novel drugs and devices that address unmet medical needs.

  • The FDA is also collaborating with companies in a more proactive way during the development process. The agency is offering more guidance and engaging in more interactive exchanges with companies prior to a product filing. In certain cases, submissions are permitted on a rolling basis as data or modules are completed, as opposed to one complete submission at the end of data collection and analysis.

  • We believe that what is taking place in health care is not only hopeful to consumers and patients, but also attractive from an investment perspective. Novel drug manufacturers and medical device companies as well as those businesses that sell products and services to aid in new product innovation are potential beneficiaries.

Risk Disclosure: Investing in the stock market involves risks, and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Healthcare companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. The views expressed are the views of Fred Alger Management, Inc. as of February 2019. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

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