Derisking new drug development at its riskiest stage

When it comes to drug innovation, it doesn't look pretty out there - although appearances can be deceiving.

Still, the raw data can be downright discouraging. Consider this 2011 estimate from the Centre for Medicines Research (a subsidiary of Thomson Reuters) on attrition in the pivotal, Phase III trials required for FDA approval of new medicines from 2000 to 2010.

phase III attrition - resized.jpg

By Phase III, companies should have a pretty good idea of what they're looking at, in terms of the safety and efficacy profile of their candidates. But the number of projects failing in that late stage more than doubled over the last decade, according to CMR, from 26 to 55.

CMR also reported a decline in the number of new products entering Phase III trials, a 55% decline from 2007-2010. (Phase I and Phase II starts were down as well.) Oncology appears to be one of the few areas of where companies are increasing their investments:

Despite the overall decrease in the number of new compounds entering
each stage of development, Anti-Cancer is one of only two therapeutic areas
to see positive growth in the number of projects being developed for launch
compared to 2008 pipeline volumes. Anti-cancer development continues
to attract the highest proportion of investment across the industry, with in
excess of 25% of total R&D expenditure...and also contributed to
over one third of all NME launches in 2010.

The irony is that the technologies (like whole genome sequencing) generating leads in drug development have never been more sophisticated, or inexpensive (compared to a decade ago), while it has gotten progressively harder to translate those basic science discoveries into new drugs reaching patients.

The reasons for the breakdown are complex, but one issue appears to be increasing regulatory complexity and rigidity - which not only adds to the cost of drug development, but to the enormous uncertainty affecting the whole venture. And since the risk of failure is still enormous in even the last and most expensive phase of drug development, regulatory risk is a tremendous deterrent to investment in the field (although, again, oncology appears to be one of the few exceptions.)

My colleauge Avik Roy ventures an explanation for the woes afflicting drug development, and a potential solution that would help to de-risk late stage development projects in his new report, Stifling New Cures: The True Cost of Lengthy Drug Trials. Roy writes that:

Matthew Herper of Forbes recently totaled R&D spending from the 12 leading pharmaceutical companies from 1997 to 2011, and found that they had spent $802 billion to gain approval for just 139 drugs: a staggering $5.8 billion per drug.

The biggest driver of this phenomenal increase has been the regulatory process governing Phase III clinical trials of new pharmaceuticals on human volunteers. One reason: Phase III clinical trials have become far larger and more complex than they were in the past. From 1999 to 2005, as the Tufts group has shown, the average length of a clinical trial increased by 70 percent; the average number of routine procedures per trial increased by 65 percent; and the average clinical trial staff work burden increased by 67 percent. On top of that, increasingly stringent enrollment criteria and trial protocols resulted in 21 percent fewer volunteers being admitted into trials and 30 percent more enrollees dropping out before completion of the tests.

Overall, Phase III trials now represent about 40 percent of pharmaceutical companies' R&D expenditures. But this often-cited statistic actually understates the gravity of the burden. This is because overall R&D expenditures include all pharmaceutical candidates that a company tests--including hundreds that never reach the Phase III trial stage. When we confined our analysis to those drugs that actually get approved, we found that Phase III clinical trials typically represent 90 percent or more of the cost of developing an individual drug all the way from laboratory to pharmacy.

Roy notes that the exception to the rule of exhausting and expensive Phase III trials can be found in the FDA's accelerated approval pathway, which was created in 1992 for HIV medicines and later cancer drugs. Accelerated approval offers developers an opportunity to bring promising new medicines to market after mid-stage testing (typically late Phase II trials), provided companies agree to conduct confirmatory trials later. The FDA can pull medicines approved under AA if they don't prove to be effetive, or unanticipated safety problems crop up.

Roy believes that this pathway should be extended to create a "conditional approval" pathway for new medicines beyond cancer and HIV, including obesity, heart disease, and diabetes, indications that account for hundreds of thousands of deaths annually, but where the FDA still requires enormous Phase III trials to rule out rare safety risks.

Susan Desmond-Hellman, the Chancellor at UCSF, is one of the people (among many) who have endorsed this type of approach:

Is there a system where we could, as we increase our confidence in safety and advocacy, allow for broader distribution and more promotion? Not a yes or a no answer? I think that could really change two things. One is, the odds in the business model would be more stacked in favor of investing in difficult things like obesity, type 2 diabetes, [and] high blood pressure, which were at risk for no innovations.

Roy believes that "allowing these companies to gain revenues for their medicines in these severely obese or diabetic patients would allow them to fund Phase III trials with dramatically lower financial risk, while still demonstrating that their drugs were sufficiently safe and effective."

By focusing on targeted patient populations that are at the highest risk the FDA and companies could offer physicians and patients new therapeutic options where they are needed most, and where the "risk to benefit" profile would be much more likely to be positive.

The science, the industry, and the FDA are all moving in this direction, as has been amply demonstrated with new targeted drugs for cancer, cystic fibrosis, and other orphan indications. What the FDA appears not to be ready for is to endorse the approach for broader indications.

Still, one provision in the new FDA user fee reauthorization under discussion in Congress (and developed with input from the Agency) would create a new designation for "breakthrough therapies" that demonstrate significant efficacy in early stage testing, and mandate that the FDA work with companies to accelerate testing and review of such products in as few patients as possible, as quickly as possible, without changing the FDA's standards for safety and effectiveness. (Former FDA Commissioner Mark McClellan explains the approach here.)

This type of approach is an important incremental improvement, and a step closer to the conditional approval paradigm that Roy advocates. If the provision stays in the legislation, and the FDA (and industry) gains confidence in the process, it could be quickly broadened out beyond traditional accelerated approval indications.

And this is what we really should be asking FDA to do: not just review applications faster, but find ways to bring important new therapies to patients much faster and less expensively than we are currently doing.

For another overview of the problems that Roy discusses, see Ronald Bailey's excellent article Building a 21st Century FDA at Reason.

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