Drug companies rushing to meet year-end targets to apply for U.S. regulatory approval of new drugs might want to slow down.

The Food and Drug Administration typically receives a higher number of new drug applications in the final three months of the year than at any other time of year. But these end-of-year applications have the lowest rates of approval during FDA's first crack at reviewing them, compared with submissions made during other quarters, according to the agency.

In addition, while other fourth-quarter submissions may ultimately be approved, the approval may not occur in as timely a manner as other quarters.

Both regulators and industry insiders suspect the rush to meet self-imposed corporate deadlines - possibly spurred by employee-compensation incentives - leads to sloppier applications. Errors and omissions in clinical data and other information can cause the FDA to have more questions, forcing the agency to take longer than the standard 10 months to make a decision.

"I personally believe people are pushing to submit things by the end of the year for business reasons as opposed to 'It's ready,'" said Robert Yetter, microbiologist with the FDA's Center for Biologics Evaluation and Research, who addressed the issue in a speech Tuesday at the Regulatory Affairs Professionals Society conference in Philadelphia.

Yetter advises letting internal corporate deadlines slide if an application isn't ready for prime time.

Douglas Hunt, senior director of global regulatory affairs at drug and medical-device maker Baxter International Inc. (BAX), acknowledged the industry's tendency to submit items by the end of the year, though he tries to avoid this and to make sure Baxter's applications are ready for review.

It should also be noted that issues at the FDA itself - such as understaffing - may contribute to delays. Yetter said heavy workloads sometimes result in FDA reviewers having new questions about an application late in the review process, forcing a delay. Baxter's Hunt said he has noticed an increase in such "late questions" from FDA.

Consulting firm Booz Allen Hamilton conducted independent evaluations of FDA's so-called "first-cycle" review performance. The first cycle refers to the initial review period, which is generally 10 months from submission for standard applications and six months for those designated priority review because the drug has potential to be a major advance in treatment. It's not uncommon for FDA reviews to extend beyond these periods.

The timelines are governed by the Prescription Drug User Fee Act, which authorizes FDA to collect fees from companies that apply for agency approval of new drugs and other products.

Booz Allen found that 44% of applications filed between 2002 and 2007 were submitted in the final three months of those years, more than twice as high as the next highest quarter, the second quarter. But only 38% of fourth-quarter submissions were approved during the FDA's first review cycle, versus an average of 51% for all applications.

The time of year with the best odds? The third quarter, or July through September, whose first-cycle approval rate exceeded 70%.

The timeliness of FDA action can make a big difference to companies. Eli Lilly & Co. (LLY) and Daiichi Sankyo Co. (4568.TO) had hoped their anti-clotting drug Effient would hit the market sometime in 2008, having submitted it to FDA the day after Christmas 2007. But the FDA extended its evaluation based on additional information the companies provided during the first cycle of the review, and the agency didn't approve the drug until July 2009 - thus costing nearly a year's worth of sales for what the companies hope will become a blockbuster.

Eli Lilly spokeswoman Tammy Hull said she didn't believe the timing of the submission of Effient to FDA factored into the delay.

"It was a very robust submission," she said. In a recent article in The New England Journal of Medicine, an FDA reviewer said the agency "grappled with a number of complex issues during the review process," including the drug's risk of causing bleeding and a drug-formulation issue.

-By Peter Loftus, Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com