Should real-world evidence play a bigger role in FDA drug approvals?

A new issue brief from the Manhattan Institute explores whether broader use of real-world evidence could make drug development more efficient, less expensive, and more accessible to patients, particularly those with rare diseases.

As the US Food and Drug Administration (FDA) begins a new chapter under newly confirmed commissioner Dr Marty Makary, who has signaled support for data-driven decision-making, a new issue brief from the think tank the Manhattan Institute argues that expanding the use of real-world evidence (RWE) could improve the agency’s regulatory processes, ultimately making drug development faster, more affordable, and ensuring patients have expanded access to new treatments.

At a time when technological advances are creating new opportunities, the brief, authored by Randall Lutter, a senior fellow and former FDA regulatory advisor, calls for a series of reforms to promote the use of RWE in regulatory decision-making. These include increasing transparency around how RWE is used, investing in further research to evaluate its reliability, and setting specific, measurable targets to guide its adoption.

Lutter acknowledges that randomized controlled trials (RCTs) remain the gold standard but argues that the FDA’s continued reliance on them can delay access to treatments and increase costs. This is particularly true in cases where RCTs are impractical or ethically challenging, such as rare diseases with small patient populations and well-understood prognoses. He advocates for a broader use of alternative trial designs, including pragmatic randomized trials and nonrandomized studies that draw on real-world data (RWD), such as electronic health records and insurance claims.

A prominent example is the UK’s RECOVERY trial, launched during the COVID-19 pandemic. By embedding a pragmatic trial design within routine care settings, the study generated rapid, reliable data on multiple therapies that directly influenced treatment guidelines around the world. According to Lutter, this model demonstrates what’s possible when regulators prioritize flexibility and practical, timely answers.

Lutter explains that US policy has established a foundation for using RWE in drug regulation, notably through the 2016 21st Century Cures Act, which directed the FDA to explore how RWE could support new indications and post-approval requirements. The FDA’s 2018 framework now recognizes both pragmatic trials and observational studies using RWD. Under the reauthorized seventh version of the Prescription Drug User Fee Act (PDUFA), the agency launched the Advancing RWE Program. However, Lutter points out that confidentiality agreements with sponsors limit transparency. In 2023, only two products—tocilizumab and lacosamide—were approved using RWE, despite over 100 approvals for new indications. With little public detail on how RWE contributed to these decisions, it is difficult to identify barriers to broader use. This lack of visibility also makes it hard to assess whether limited uptake stems from FDA caution or sponsor reluctance to rely on RWE in regulatory submissions.

Looking ahead, Lutter calls for continued investment in regulatory science to explore when and how RWE can substitute for traditional trial data. While inferring causation from observational data remains difficult, this should not deter the FDA from supporting further research and more ambitious use of real-world approaches.

To achieve these reforms, Lutter recommends:

• An independent body such as the National Academies of Sciences, Engineering, and Medicine (NASEM) should assess legal and regulatory barriers to using RWD in pragmatic trials and propose solutions.
• The FDA should expand annual reporting on the use of RWE, with clear distinctions between trial types and safeguards for commercial confidentiality.
• Additional funding should be allocated to study the application and limitations of RWE in diverse regulatory contexts.
• The agency should set a quantifiable strategic goal for the use of RWD and RWE in regulatory decisions. An achievable goal could be that by 2030 half of all supplemental drug and biologic applications are approved using pragmatic trial data.
• At least ten approvals for novel rare disease treatments should incorporate RWE, including nonrandomized trials.

These recommendations, to set quantitative goals, increase reporting, and fund further research, would bring the FDA closer to the European Medicines Agency (EMA)’s structured and strategic use of RWE within regulatory science. Prior to the current administration, the FDA established the CDER Center for Real-World Evidence Innovation (CCRI) to enhance the agency’s ability to incorporate RWD and RWE into regulatory decision-making. However, there have been no public updates on the center’s activities since its launch, raising questions about its role and future direction, particularly amid broader changes under the new leadership at the Department of Health and Human Services (HHS). While the CCRI has the potential to play a leading role in modernizing evidence generation, its impact remains uncertain.