Matthew Herper cited the above statistic in his Forbes blog today from a study looking at FDA decisions from 2007-2010 covering 120 votes. Basically, the FDA follows its advisors advice 74% of the time. Most tellingly, the FDA only overruled a "no" vote from the advisory committee 3 times. So rejections from the committee hold up. In your face!
What about situations where the committee experts accept the application and vote yes! Well, the FDA does not appear to feel similarly constrained to accept a yes vote - as these constitute the bulk of the rejected "advice" decisions. Herper states that the Provenge case when viewed in this light seems like business as usual. There was ample precedent prior to Provenge for an advisory panel to recommend approval and then have the FDA decide to withhold approval pending further data.
The Forbes post further makes the point then that investors should put more stock in rejections by the advisory panel being upheld by the FDA - alarm bells if you've invested in weight loss drugs. Postive votes on the other hand are a little more tenuous as to the final decision - sound advice might be to not bet the mortgage on a YES from the advisory panel.
No, if you want to be in the prognostication business, you may just want to dial in the following players in The Street's first annual Drug Approval Contest. BigHerm, BioTrekker, Barca Boy, Joe and RJMCanoe have all correctly predicted the outcomes of the first five FDA drug approvals decisions in October - out of 95 participants. Dial in the ones in the know.
Post Script: I was curious to find some statistics on what percentage of clients in the business world rejected their consultants (advisors) advice. I couldn't find much in a quick Google search. But I did find this UK study published in 2010 from the IT industry. It seems 88% of senior IT managers now consider it prudent to seek advice from outside consultants - but a whopping 97% - YES 97% - companies that seek the help of expensive consultants then make matters worse by determinedly ignoring part or even all of the advice they have paid for! The FDA looks progressive in comparison - at least they listen predominantly to their hired guns.
Posted by Bruce Lehr October 13th 2010.