FDA Layoffs Affect Drug Approvals, Forcing Pharma Companies to Exploit Loopholes

There are signs that the FDA's major layoffs have begun to affect drug approvals. Women's health company Daré Bioscience has become the first reported victim.

The company originally planned to advance a female-use sildenafil (i.e., "Viagra") cream into Phase III clinical trials this year. However, due to FDA approval delays, the company will postpone the trial and instead plans to launch the product this year as a compounded drug.

In fact, at the end of last year, the company had already reached an agreement with the FDA on the key study design and endpoints for the topical sildenafil cream. At the time, it planned to submit a study protocol and statistical analysis plan to the FDA in Q1 of 2025, intending to file a New Drug Application (NDA) under the 505(b)(2) pathway—which allows the use of existing drug safety data—and launch the trial by mid-year.

Now that Q1 has passed, Daré's CEO says they are still waiting for some information from the FDA regarding the analysis plan. The FDA has postponed the release of guidance documents twice in the past two months. The feedback received from the FDA was “too brief” and requires further discussion.

Previously, the company was able to obtain trial-related information within agreed timelines. The current trial’s uncertainty has delayed the second confirmatory late-stage study necessary to support the NDA. As a result, Daré is temporarily shifting focus to FDA Section 503B, planning to sell the cream as a compounded drug later this year.

Female Sildenafil Cream

Normally, PDE-5 inhibitors like “Viagra” are used by men, but female sexual arousal disorder (FSAD) shares physiological mechanisms with erectile dysfunction (ED), including vasodilation and increased blood flow. Women’s genital tissues also express PDE-5 isoenzymes, which are closely associated with vascular dilation following stimulation.

Daré Bioscience's topical sildenafil cream uses KNOSIS? local delivery technology, which enhances drug permeability through L-arginine and ionic salts (like sodium chloride), avoiding systemic side effects. This technology is patented (US10898489B2) and has completed a Phase IIb clinical trial, showing significant efficacy in treating FSAD.

Clinical data shows the cream increases genital blood flow, improves arousal response, and is well tolerated without the systemic side effects of oral sildenafil.

If pursued via the normal 505(b)(2) process, this drug could enjoy 3–5 years of market exclusivity. But while the 503B path exploits a regulatory loophole, it does not offer exclusivity.

The Loophole: FDA Section 503B

FDA Section 503B allows outsourcing facilities to compound and sell certain drugs without full NDA approval. These facilities must meet FDA quality standards and clearly label usage instructions and potential risks on the product.

The rule was originally well-intentioned—to address drug shortages and unique clinical needs by allowing licensed pharmacies to modify formulations, dosages, and delivery methods. For example, if a patient is allergic to a component, a pharmacy can reformulate the drug.

However, in practice, the rule has been exploited. Some compounding pharmacies do not meet GMP standards. Their products may contain too little, too much, or none of the active ingredient—or even harmful or incorrect ingredients.

A case in point: compounded versions of semaglutide and tirzepatide, which were heavily pursued legally by Eli Lilly and Novo Nordisk. These compounds led to improper usage, causing side effects like gastrointestinal issues, fainting, dehydration, headaches, gallstones, and acute pancreatitis. In serious cases, hospitalization was needed.

As of August last year, the FDA had received 346 adverse event reports for compounded semaglutide and 136 for compounded tirzepatide—many tied to incorrect dosages.

Now, Daré Bioscience is choosing to use the 503B pathway to market its female-use sildenafil cream, raising concerns that similar problems may arise.

An Act of Desperation

Given the circumstances, Daré Bioscience may have had no choice.

According to the company’s 2024 annual financial report, as of December 31, it had about $15.7 million in cash and cash equivalents, with a working capital deficit of around $3.2 million.

While the deficit isn’t massive, the company cannot afford to burn through cash. With several other drugs in development, R&D costs are a major concern, and the commercialization of sildenafil adds to the financial burden. In today’s tough economic climate, even slight FDA delays could bankrupt a company.

It’s likely that Daré Bioscience won’t be the last company forced to take this kind of desperate measure.