February 10, 2023

FDA Modernization Act Allows Faster, More Cost-effective Drug Development

Kevin Conard and Rachel Bolger
Kevin Conard and Rachel Bolger


On December 29th, as part of an omnibus appropriations bill, Congress passed the FDA Modernization Act 2.0, which President Biden then signed into law. This is an extraordinary step that will change the way new therapies are brought to market. It is also a testament to the promise and power of cell-based efficacy and toxicity testing.The act allows for the use of humanized, in-vitro toxicology assays to be substituted for animal studies during pre-clinical development. Let’s pause on that for a moment. The law ends an outdated FDA mandate that experimental drugs must be tested on animals before they are used on humans in clinical trials and allows the option to use alternative methods where appropriate. This is a big moment. The benefits of the change are numerous. Animal based toxicology studies are only ~70% predictive, are expensive to undertake, lengthy, and fraught with ethical considerations.


As medicine advances, small molecule drug development (like aspirin or acetaminophen) is being superseded by the development of promising biologics specific to humans (like monoclonal antibodies or biologics). Testing biologics specific for humans in animal-based toxicology models can lead to both false negative and false positive bias.  Using fully humanized, cell-based models enables a ‘Fail Early, Fail Often,’ approach to toxicity testing, which is a good thing. Drug candidates are filtered out earlier in the discovery process, which translates to less money wasted on drugs that don’t exhibit toxic effects in animals but do in humans.

This is the biggest policy development in congressional history in the quest to replace animal testing with morally and scientifically superior non-animal methods," said Wayne Pacelle, president of Animal Wellness Action and the Center for a Humane Economy. 

The act will significantly impact new business startups. The act enables a significant change in how new drugs are tested pre-clinically, both for toxicology and efficacy (mode of action). This represents a tremendous opportunity for the startup community. The past 10-15 years have witnessed many pioneering startups in the cell-based toxicology/drug discovery space. These businesses designed new methods of screening for toxicology using a myriad of detection methods. These are bold businesses developing clever solutions.  But change happens slowly in the pharmaceutical space for good reasons. New ideas require proper vetting; change is expensive, and the cost of undo risk is too great. Passing this act expedites the adoption of effective new ways of testing drug candidates.


The impact of the FDA Modernization Act 2.0 will be far reaching. It will modernize the way pharma brings new drugs to market and it will catalyze the development of new capabilities and testing regiments in the drug discovery and toxicology space. The act validates promising opportunity and new terrain for Biotech and Biopharma.

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