FDA to End Two-Study Mandate for New Drugs to Accelerate Market Access

The FDA’s decision to move away from the 'two-study' rule marks the end of a sixty-year era in pharmaceutical regulation. Since the 1962 Kefauver-Harris Amendment, the agency has generally demanded two independent, adequate, and well-controlled clinical trials to establish 'substantial evidence' of a drug's effectiveness. By relaxing this requirement, the FDA is acknowledging that modern trial designs—often involving thousands of patients across hundreds of global sites—can provide sufficient statistical power and evidence of efficacy within a single, robust study. This change represents a tectonic shift in regulatory philosophy, moving from a rigid procedural mandate to a more flexible, data-driven assessment of benefit versus risk.

This shift is an extraordinary development for the biotechnology sector, particularly for small-cap and mid-sized firms. Historically, the cost of a single Phase 3 trial could exceed $100 million, and the requirement for a second confirmatory trial often forced companies into highly dilutive funding rounds or premature partnerships with larger pharmaceutical entities. By allowing a 'one and done' approach for pivotal data in a broader range of indications, the FDA is effectively lowering the barrier to entry for innovation. This could lead to a surge in New Drug Applications (NDAs) over the next three to five years as companies re-evaluate their clinical pipelines and accelerate their timelines to market.

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Historically, the cost of a single Phase 3 trial could exceed $100 million, and the requirement for a second confirmatory trial often forced companies into highly dilutive funding rounds or premature partnerships with larger pharmaceutical entities.

However, the industry should not mistake this flexibility for a lowering of scientific standards. The FDA has indicated that while it may accept a single pivotal trial, that trial must be 'persuasive' and 'robust.' In practice, this likely means the agency will demand higher statistical significance—perhaps p-values significantly lower than the traditional 0.05—and more comprehensive internal consistency across subgroups and secondary endpoints. Furthermore, the agency is expected to lean more heavily on its Accelerated Approval pathway, which allows for earlier market entry based on surrogate endpoints, provided that rigorous post-marketing (Phase 4) confirmatory trials are completed. The burden of proof is not disappearing; it is simply shifting in its timing and structure.

From a market perspective, this move will likely redistribute capital within the healthcare ecosystem. Investors may become more willing to fund companies through the final stages of development if the path to commercialization is shortened by several years. Conversely, the competitive landscape will become significantly more crowded. As the 'time-to-market' moat shrinks, the premium will shift from companies that have the capital to run multiple trials to those that possess the most compelling and differentiated clinical data. We may also see a shift in the role of Contract Research Organizations (CROs), who may see a decrease in the volume of trials per drug but an increase in the total number of unique drug candidates entering late-stage development.

Critics and patient safety advocates are already expressing caution, noting that the two-study rule served as a vital safeguard against 'false positives' or fluke results. If a drug is approved based on a single trial that is later found to be flawed or non-replicable, the public health and legal consequences could be substantial. To mitigate this, the FDA is expected to bolster its post-market surveillance capabilities, utilizing real-world evidence (RWE) and digital health technologies to monitor drug performance in the general population. For stakeholders, the message is clear: the regulatory gates are opening wider, but the scrutiny on real-world performance will be more intense than ever before.