Spending on postapproval drug safety.

Withdrawals of high-profile pharmaceuticals have focused attention on post-approval safety surveillance. There have been no systematic assessments of spending on postapproval safety. We surveyed drug manufacturers regarding safety efforts. Mean spending on postapproval safety per company in 2003 was 56 million dollars (0.3 percent of sales). Assuming a constant safety-to-sales ratio, we estimated that total spending on postapproval safety by the top twenty drug manufacturers was 800 million dollars in 2003. We also examined, using regression analysis, the relationship between the number of safety personnel and the number of initial adverse-event reports. This study offers information for the debate on proposed changes to safety surveillance.

Impact of economic, regulatory, and patent policies on innovation in cancer chemoprevention.

Chemoprevention agents are an emerging new scientific area that holds out the promise of delaying or avoiding a number of common cancers. These new agents face significant scientific, regulatory, and economic barriers, however, which have limited investment in their research and development (R&D). These barriers include above-average clinical trial scales, lengthy time frames between discovery and Food and Drug Administration approval, liability risks (because they are given to healthy individuals), and a growing funding gap for early-stage candidates. The longer time frames and risks associated with chemoprevention also cause exclusivity time on core patents to be limited or subject to significant uncertainties. We conclude that chemoprevention uniquely challenges the structure of incentives embodied in the economic, regulatory, and patent policies for the biopharmaceutical industry. Many of these policy issues are illustrated by the recently Food and Drug Administration-approved preventive agents Gardasil and raloxifene. Our recommendations to increase R&D investment in chemoprevention agents include (a) increased data exclusivity times on new biological and chemical drugs to compensate for longer gestation periods and increasing R&D costs; chemoprevention is at the far end of the distribution in this regard; (b) policies such as early-stage research grants and clinical development tax credits targeted specifically to chemoprevention agents (these are policies that have been very successful in increasing R&D investment for orphan drugs); and (c) a no-fault liability insurance program like that currently in place for children's vaccines.

Cost of innovation in the pharmaceutical industry.

The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).

The cost of biopharmaceutical R&D: Is biotech different?

The costs of developing the types of new drugs that have been pursued by traditional pharmaceutical firms have been estimated in a number of studies. However, similar analyses have not been published on the costs of developing the types of molecules on which biotech firms have focused. This study represents a first attempt to get a sense for the magnitude of the R&D costs associated with the discovery and development of new therapeutic biopharmaceuticals (specifically, recombinant proteins and monoclonal antibodies [mAbs]). We utilize drug-specific data on cash outlays, development times, and success in obtaining regulatory marketing approval to estimate the average pre-tax R&D resource cost for biopharmaceuticals up to the point of initial US marketing approval (in year 2005 dollars). We found average out-of-pocket (cash outlay) cost estimates per approved biopharmaceutical of $198 million, $361 million, and $559 million for the preclinical period, the clinical period, and in total, respectively. Including the time costs associated with biopharmaceutical R&D, we found average capitalized cost estimates per approved biopharmaceutical of $615 million, $626 million, and $1241 million for the preclinical period, the clinical period, and in total, respectively. Adjusting previously published estimates of R&D costs for traditional pharmaceutical firms by using past growth rates for pharmaceutical company costs to correspond to the more recent period to which our biopharmaceutical data apply, we found that total out-of-pocket cost per approved biopharmaceutical was somewhat lower than for the pharmaceutical company data ($559 million vs $672 million). However, estimated total capitalized cost per approved new molecule was nearly the same for biopharmaceuticals as for the adjusted pharmaceutical company data ($1241 million versus $1318 million). The results should be viewed with some caution for now given a limited number of biopharmaceutical molecules with data on cash outlays, different therapeutic class distributions for biopharmaceuticals and for pharmaceutical company drugs, and uncertainty about whether recent growth rates in pharmaceutical company costs are different from immediate past growth rates. Copyright © 2007 John Wiley & Sons, Ltd.

Economics of new oncology drug development.

PURPOSE: Review existing studies and provide new results on the development, regulatory, and market aspects of new oncology drug development. METHODS: We utilized data from the US Food and Drug Administration (FDA), company surveys, and publicly available commercial business intelligence databases on new oncology drugs approved in the United States and on investigational oncology drugs to estimate average development and regulatory approval times, clinical approval success rates, first-in-class status, and global market diffusion. RESULTS: We found that approved new oncology drugs to have a disproportionately high share of FDA priority review ratings, of orphan drug designations at approval, and of drugs that were granted inclusion in at least one of the FDA's expedited access programs. US regulatory approval times were shorter, on average, for oncology drugs (0.5 years), but US clinical development times were longer on average (1.5 years). Clinical approval success rates were similar for oncology and other drugs, but proportionately more of the oncology failures reached expensive late-stage clinical testing before being abandoned. In relation to other drugs, new oncology drug approvals were more often first-in-class and diffused more widely across important international markets. CONCLUSION: The market success of oncology drugs has induced a substantial amount of investment in oncology drug development in the last decade or so. However, given the great need for further progress, the extent to which efforts to develop new oncology drugs will grow depends on future public-sector investment in basic research, developments in translational medicine, and regulatory reforms that advance drug-development science.

The price of innovation: new estimates of drug development costs.

The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.

Economic return of clinical trials performed under the pediatric exclusivity program.

CONTEXT: In 1997, Congress authorized the US Food and Drug Administration (FDA) to grant 6-month extensions of marketing rights through the Pediatric Exclusivity Program if industry sponsors complete FDA-requested pediatric trials. The program has been praised for creating incentives for studies in children and has been criticized as a "windfall" to the innovator drug industry. This critique has been a substantial part of congressional debate on the program, which is due to expire in 2007. OBJECTIVE: To quantify the economic return to industry for completing pediatric exclusivity trials. DESIGN AND SETTING: A cohort study of programs conducted for pediatric exclusivity. Nine drugs that were granted pediatric exclusivity were selected. From the final study reports submitted to the FDA (2002-2004), key elements of the clinical trial design and study operations were obtained, and the cost of performing each study was estimated and converted into estimates of after-tax cash outflows. Three-year market sales were obtained and converted into estimates of after-tax cash inflows based on 6 months of additional market protection. Net economic return (cash inflows minus outflows) and net return-to-costs ratio (net economic return divided by cash outflows) for each product were then calculated. MAIN OUTCOME MEASURES: Net economic return and net return-to-cost ratio. RESULTS: The indications studied reflect a broad representation of the program: asthma, tumors, attention-deficit/hyperactivity disorder, hypertension, depression/generalized anxiety disorder, diabetes mellitus, gastroesophageal reflux, bacterial infection, and bone mineralization. The distribution of net economic return for 6 months of exclusivity varied substantially among products (net economic return ranged from -$8.9 million to $507.9 million and net return-to-cost ratio ranged from -0.68 to 73.63). CONCLUSIONS: The economic return for pediatric exclusivity is variable. As an incentive to complete much-needed clinical trials in children, pediatric exclusivity can generate lucrative returns or produce more modest returns on investment.

Evolving brand-name and generic drug competition may warrant a revision of the Hatch-Waxman Act.

The evolution of pharmaceutical competition since Congress passed the Hatch-Waxman Act in 1984 raises questions about whether the act's intended balance of incentives for cost savings and continued innovation has been achieved. Generic drug usage and challenges to brand-name drugs' patents have increased markedly, resulting in greatly increased cost savings but also potentially reduced incentives for innovators. Congress should review whether Hatch-Waxman is achieving its intended purpose of balancing incentives for generics and innovation. It also should consider whether the law should be amended so that some of its provisions are brought more in line with recently enacted legislation governing approval of so-called biosimilars, or the corollary for biologics of generic competition for small-molecule drugs.

Developing drugs for developing countries.

Infectious and parasitic diseases create enormous health burdens, but because most of the people suffering from these diseases are poor, little is invested in developing treatments. We propose that developers of treatments for neglected diseases receive a "priority review voucher." The voucher could save an average of one year of U.S. Food and Drug Administration (FDA) review and be sold by the developer to the manufacturer of a blockbuster drug. In a well-functioning market, the voucher would speed access to highly valued treatments. Thus, the voucher could benefit consumers in both developing and developed countries at relatively low cost to the taxpayer.

5-α reductase inhibitors and prostate cancer prevention: where do we turn now?

With the lifetime risk of being diagnosed with prostate cancer so great, an effective chemopreventive agent could have a profound impact on the lives of men. Despite decades of searching for such an agent, physicians still do not have an approved drug to offer their patients. In this article, we outline current strategies for preventing prostate cancer in general, with a focus on the 5-α-reductase inhibitors (5-ARIs) finasteride and dutasteride. We discuss the two landmark randomized, controlled trials of finasteride and dutasteride, highlighting the controversies stemming from the results, and address the issue of 5-ARI use, including reasons why providers may be hesitant to use these agents for chemoprevention. We further discuss the recent US Food and Drug Administration ruling against the proposed new indication for dutasteride and the change to the labeling of finasteride, both of which were intended to permit physicians to use the drugs for chemoprevention. Finally, we discuss future directions for 5-ARI research.

Bayesian inference of the number of factors in gene-expression analysis: application to human virus challenge studies.

BACKGROUND: Nonparametric Bayesian techniques have been developed recently to extend the sophistication of factor models, allowing one to infer the number of appropriate factors from the observed data. We consider such techniques for sparse factor analysis, with application to gene-expression data from three virus challenge studies. Particular attention is placed on employing the Beta Process (BP), the Indian Buffet Process (IBP), and related sparseness-promoting techniques to infer a proper number of factors. The posterior density function on the model parameters is computed using Gibbs sampling and variational Bayesian (VB) analysis. RESULTS: Time-evolving gene-expression data are considered for respiratory syncytial virus (RSV), Rhino virus, and influenza, using blood samples from healthy human subjects. These data were acquired in three challenge studies, each executed after receiving institutional review board (IRB) approval from Duke University. Comparisons are made between several alternative means of per-forming nonparametric factor analysis on these data, with comparisons as well to sparse-PCA and Penalized Matrix Decomposition (PMD), closely related non-Bayesian approaches. CONCLUSIONS: Applying the Beta Process to the factor scores, or to the singular values of a pseudo-SVD construction, the proposed algorithms infer the number of factors in gene-expression data. For real data the "true" number of factors is unknown; in our simulations we consider a range of noise variances, and the proposed Bayesian models inferred the number of factors accurately relative to other methods in the literature, such as sparse-PCA and PMD. We have also identified a "pan-viral" factor of importance for each of the three viruses considered in this study. We have identified a set of genes associated with this pan-viral factor, of interest for early detection of such viruses based upon the host response, as quantified via gene-expression data.

New business models for antibiotic innovation.

The increase in antibiotic resistance and the dearth of novel antibiotics have become a growing concern among policy-makers. A combination of financial, scientific, and regulatory challenges poses barriers to antibiotic innovation. However, each of these three challenges provides an opportunity to develop pathways for new business models to bring novel antibiotics to market. Pull-incentives that pay for the outputs of research and development (R&D) and push-incentives that pay for the inputs of R&D can be used to increase innovation for antibiotics. Financial incentives might be structured to promote delinkage of a company's return on investment from revenues of antibiotics. This delinkage strategy might not only increase innovation, but also reinforce rational use of antibiotics. Regulatory approval, however, should not and need not compromise safety and efficacy standards to bring antibiotics with novel mechanisms of action to market. Instead regulatory agencies could encourage development of companion diagnostics, test antibiotic combinations in parallel, and pool and make transparent clinical trial data to lower R&D costs. A tax on non-human use of antibiotics might also create a disincentive for non-therapeutic use of these drugs. Finally, the new business model for antibiotic innovation should apply the 3Rs strategy for encouraging collaborative approaches to R&D in innovating novel antibiotics: sharing resources, risks, and rewards.

The professionalism disconnect: do entering residents identify yet participate in unprofessional behaviors?

BACKGROUND: Professionalism has been an important tenet of medical education, yet defining it is a challenge. Perceptions of professional behavior may vary by individual, medical specialty, demographic group and institution. Understanding these differences should help institutions better clarify professionalism expectations and provide standards with which to evaluate resident behavior. METHODS: Duke University Hospital and Vidant Medical Center/East Carolina University surveyed entering PGY1 residents. Residents were queried on two issues: their perception of the professionalism of 46 specific behaviors related to training and patient care; and their own participation in those specified behaviors. The study reports data analyses for gender and institution based upon survey results in 2009 and 2010. The study received approval by the Institutional Review Boards of both institutions. RESULTS: 76% (375) of 495 PGY1 residents surveyed in 2009 and 2010 responded. A majority of responders rated all 46 specified behaviors as unprofessional, and a majority had either observed or participated in each behavior. For all 46 behaviors, a greater percentage of women rated the behaviors as unprofessional. Men were more likely than women to have participated in behaviors. There were several significant differences in both the perceptions of specified behaviors and in self-reported observation of and/or involvement in those behaviors between institutions.Respondents indicated the most important professionalism issues relevant to medical practice include: respect for colleagues/patients, relationships with pharmaceutical companies, balancing home/work life, and admitting mistakes. They reported that professionalism can best be assessed by peers, patients, observation of non-medical work and timeliness/detail of paperwork. CONCLUSION: Defining professionalism in measurable terms is a challenge yet critical in order for it to be taught and assessed. Recognition of the differences by gender and institution should allow for tailored teaching and assessment of professionalism so that it is most meaningful. A shared understanding of what constitutes professional behavior is an important first step.

Pharmacogenomics in early-phase clinical development.

Pharmacogenomics (PGx) offers the promise of utilizing genetic fingerprints to predict individual responses to drugs in terms of safety, efficacy and pharmacokinetics. Early-phase clinical trial PGx applications can identify human genome variations that are meaningful to study design, selection of participants, allocation of resources and clinical research ethics. Results can inform later-phase study design and pipeline developmental decisions. Nevertheless, our review of the clinicaltrials.gov database demonstrates that PGx is rarely used by drug developers. Of the total 323 trials that included PGx as an outcome, 80% have been conducted by academic institutions after initial regulatory approval. Barriers for the application of PGx are discussed. We propose a framework for the role of PGx in early-phase drug development and recommend PGx be universally considered in study design, result interpretation and hypothesis generation for later-phase studies, but PGx results from underpowered studies should not be used by themselves to terminate drug-development programs.

Clinical Research Environment in India: Challenges and Proposed Solutions.

India has compelling need and keen aspirations for indigenous clinical research. Notwithstanding this need and previously reported growth the expected expansion of Indian clinical research has not materialized. We reviewed the scientific literature, lay press reports, and ClinicalTrials.gov data for information and commentary on projections, progress, and impediments associated with clinical trials in India. We also propose targeted solutions to identified challenges. The Indian clinical trial sector grew by (+) 20.3% CAGR (compound annual growth rate) between 2005 and 2010 and contracted by (-) 14.6% CAGR between 2010 and 2013. Phase-1 trials grew by (+) 43.5% CAGR from 2005-2013, phase-2 trials grew by (+) 19.8% CAGR from 2005-2009 and contracted by (-) 12.6% CAGR from 2009-2013, and phase-3 trials grew by (+) 13.0% CAGR from 2005-2010 and contracted by (-) 28.8% CAGR from 2010-2013. This was associated with a slowing of the regulatory approval process, increased media coverage and activist engagement, and accelerated development of regulatory guidelines and recuperative initiatives. We propose the following as potential targets for restorative interventions: Regulatory overhaul (leadership and enforcement of regulations, resolution of ambiguity in regulations, staffing, training, guidelines, and ethical principles [e.g., compensation]).Education and training of research professionals, clinicians, and regulators.Public awareness and empowerment. After a peak in 2009-2010, the clinical research sector in India appears to be experiencing a contraction. There are indications of challenges in regulatory enforcement of guidelines; training of clinical research professionals; and awareness, participation, partnership, and the general image amongst the non-professional media and public. Preventative and corrective principles and interventions are outlined with the goal of realizing the clinical research potential in India.