Threat From Within: Why Biopharma's Drug Development Bottleneck Is Systemic

By Rohit Gupta, Partner, Beghou

While regulatory uncertainty has dominated biopharma headlines this year, long-term data suggest that companies' own organizational deficiencies may be just as damaging. Consider that, on the same day in July 2025, three advanced therapy programs each received a Complete Response Letter (CRL) from the FDA.

All three — Capricor's CAP-1002 for Duchenne muscular dystrophy, Ultragenyx's UX111 for Sanfilippo syndrome type A, and Rocket Pharmaceuticals' Kresladi for leukocyte adhesion deficiency — were rejected for  CMC deficiencies. These structural issues had been building for some time; analysis of FDA CRLs from 2020 to 2024 showed that 74% cited manufacturing or quality issues.

And that pattern may also be a harbinger of future struggles, if the industry, which has been slow to confront the issue, neglects the following reality about drug development: The primary constraint is no longer scientific or regulatory but organizational. And most biopharma companies are not built for what’s coming.

What Has Changed

In 2024, 57% of FDA novel drug approvals involved at least one expedited designation, whether Breakthrough Therapy, Fast Track, Priority Review, or Accelerated Approval. That figure reflects how the agency operates now, not an edge case reserved for urgent unmet needs.

Rolling review has moved from pandemic workaround to a more standard tool. The FDA has also signaled openness to approving a single well-controlled pivotal trial in certain settings, with confirmatory evidence generated in parallel rather than in sequence. That not only means that the initial trial will be the most pivotal but also that development timelines will shrink pharma’s traditional launch window.

AI is compressing development, too. Tech-first biotech Insilico Medicine moved its idiopathic pulmonary fibrosis candidate from target identification to preclinical nomination in 18 months, the company said, against an industry benchmark of two and a half to four years. These are early proof points. The direction is not ambiguous. When one part of a system accelerates, the constraint moves. Drug development is moving from evidence generation toward the enterprise that must act on it.

Opting Out Is Not Free

One objection to the above argument is that accelerated pathways are voluntary. Standard timelines still exist. If the compressed window is a product of choices a company doesn’t make, the organizational problem never arises. There are two things wrong with this line of thinking, however.

First, when a rival earns Breakthrough designation and reaches the market a year ahead in oncology or rare disease, prescribing patterns form, formularies favor the pioneer, and payers establish reference points. The second entrant arrives on the market with opinions already formed. Opting out is defensible but not without consequences.

Moreover, the organizational argument doesn't depend on regulatory acceleration alone. Again, AI is compressing standard programs just as much as the regulators are. An organization that cannot make decisions faster, commit capital under uncertainty, and run workstreams in parallel is exposed in any scenario.

Structural Mismatch

It’s worth noting that the CMC-heavy CRL pattern noted above predates the current period of FDA leadership change and spans multiple administrations. This is not an artifact of any regulatory posture. It reflects a structural mismatch between how biopharma organizations make capital commitment decisions and what compressed timelines now demand of them.

Scale-up decisions have historically been made after Phase 3 readout, when probability of approval justified the capital. While that logic was rational when development was long, it’s dangerous now. Companies must make large, partially irreversible capital commitments under uncertainty that used to be fully resolved before anyone reached for a checkbook. That’s not a scheduling problem but a reality of decision-making.

The market access dimension compounds this. A drug approved by the FDA in early 2026 will typically not reach reimbursed patients in France or England until late 2027 or beyond. Germany's AMNOG pharmaceutical marketing process takes a year after launch to reach a negotiated price; the U.K.’s National Institute for Health and Care Excellence runs for nine to 12 months. These timelines do not compress in response to the acceleration in clinical development. Commercial and market access functions must now be active during development, not after. Sequential handoffs that made sense when time was abundant are now self-imposed delays.

Not All Are Equally Exposed

Large pharma has the infrastructure but often lacks the decision-making apparatus to deploy it in coordination before certainty arrives. With quarterly portfolio reviews, function-level profit and loss, and leadership forums calibrated to a slower evidence environment, the pieces exist but not the operating model for moving them together quickly. Small biotechs, on the other hand, can make rapid decisions, but they often lack the cross-functional depth needed to run parallel workstreams.

The most exposed companies sit in the middle. They’re too large to be genuinely agile yet too small to field the teams with the requisite degree of parallel execution. They must solve the problem themselves, with less slack than large pharma and less tolerance for distraction than an early-stage startup.

This is where the organizational bottleneck may manifest itself most visibly over the next five years. In terms of therapeutic area, oncology teams have operated under compressed timelines for a decade and have built the muscle. Others — namely cardiovascular, CNS, metabolic disease, and immunology — are less prepared and are rapidly approaching the same predicament.

What Needs To Change

Fixing this is not a culture initiative, and it cannot be solved by adding a cross-functional task force to an existing sequential operating model. Three shifts are required:

First, capital commitment decisions, particularly manufacturing scale-up, must be explicitly restructured to occur earlier and under more uncertainty than current stage-gate frameworks were designed to handle. This means building probabilistic investment models that account for CMC risk alongside clinical risk, with clear ownership at the leadership level for making the call before Phase 3 resolves.

Second, commercial and medical functions must be formally embedded in development-stage planning — not as observers but as contributors to trial design, endpoint selection, and evidence strategy. The pivotal trial is increasingly the commercial blueprint. Organizations that treat it as purely a clinical exercise are making a structural error.

Third, the leadership profile required to run this model needs to be named and developed. The integrated leader who can hold ambiguity across development, regulatory, manufacturing, and commercial functions simultaneously, and make resource allocation calls before the evidence is complete, is a different archetype than the functional depth specialists most biopharma organizations have historically built for. That profile is scarce. Organizations that haven’t identified it are already behind.

The biopharma industry spent 30 years arguing that slow development was a problem imposed predominantly from the outside. As some of those external constraints now loosen, a new risk is emerging. Organizations are discovering that the constraint was never entirely outside the building.

About The Author:

Rohit Gupta is partner at Beghou.