Are drug R&D costs ex­ag­ger­at­ed for ef­fect? Re­searchers peg the me­di­an price of piv­otal suc­cess at an eco­nom­i­cal $19M

One of the most fre­quent­ly cit­ed stats in the biotech biz re­volves around the claim that it can take more than a decade and $1 bil­lion-plus to get a drug to mar­ket. For lob­by­ists, it’s a chance to un­der­score the high cost of R&D that goes in­to a new treat­ment — and help con­sumers and pay­ers swal­low the bit­ter pill that comes with big prices at­tached to the ther­a­pies that pass muster at the FDA.

But does it ac­cu­rate­ly rep­re­sent the true cost of R&D to­day?

One set of re­searchers de­cid­ed to take a telling snap­shot of one key met­ric in drug de­vel­op­ment, and you might be sur­prised to learn what they found.

Joseph Ross

Pub­lish­ing in JA­MA In­ter­nal Med­i­cine, the group sized up the 138 piv­otal tri­als that were need­ed to get an ap­proval on 59 nov­el drugs ap­proved in 2015 and 2016. They used a glob­al clin­i­cal tri­al cost as­sess­ment tool used by CROs and phar­mas to make their es­ti­mates. 

The me­di­an es­ti­mat­ed cost of the full range of stud­ies: $19 mil­lion.

The spread start­ed at a low of $5 mil­lion for some very small stud­ies test­ing drugs for very rare dis­eases — with no con­trol group — and soared to $346.8 mil­lion for a non-in­fe­ri­or­i­ty study. Of the 138 to­tal, 26 were un­con­trolled, which is def­i­nite­ly cheap­er. The mean es­ti­mat­ed cost of those un­con­trolled stud­ies was $13.5 mil­lion com­pared to $35.1 mil­lion for a place­bo con­trol or ri­val drug in the mix.

The mantra in the biotech in­dus­try in par­tic­u­lar — where you’ll find the small­est R&D bud­gets — has been small­er, faster, cheap­er when it comes to stud­ies. And that mantra may be play­ing out in new tri­al de­signs that are squeez­ing the cost of clin­i­cal tri­als, par­tic­u­lar­ly for tru­ly nov­el drugs.

The au­thors say the num­bers pro­vide “a dif­fer­ent per­spec­tive to the wide­ly held as­sump­tion that elab­o­rate and ex­pen­sive clin­i­cal tri­als are the main rea­son for the high costs of de­vel­op­ing a new drug.”

In a com­men­tary, Yale’s Joseph Ross cau­tioned against con­sid­er­ing the study a guide to de­vel­op­ment costs, as it’s re­strict­ed to the suc­cess­ful piv­otal tri­als. He adds:

(I)t sug­gests that the stronger the ev­i­dence that is gen­er­at­ed, which is most use­ful to in­form clin­i­cal prac­tice, the more it costs. We get what we pay for, and high qual­i­ty clin­i­cal tri­al da­ta are well worth the in­vest­ment to make sure we pri­or­i­tize spend­ing our health­care re­sources on ther­a­pies that have been shown to ben­e­fit pa­tients.

PhRMA took a look at these num­bers, though, and im­me­di­ate­ly bris­tled at the im­pli­ca­tions. The study, says a spokesper­son, ig­nores the full range of costs that go in­to de­vel­op­ing a new drug, from pre­clin­i­cal through ap­proval. And what about all the fail­ures com­pa­nies have to en­dure along the way? That adds enor­mous­ly to the cost of drug de­vel­op­ment, says a spokesper­son.

This study’s nar­row find­ings should not be used to make sweep­ing gen­er­al­iza­tions about the in­vest­ment bio­phar­ma­ceu­ti­cal com­pa­nies make in the de­vel­op­ment of new ther­a­pies. The study ig­nores the ma­jor­i­ty of costs re­lat­ed to the re­search and de­vel­op­ment (R&D) of a new med­i­cine, rang­ing from ex­ten­sive pre-clin­i­cal re­search, clin­i­cal tri­als, glob­al co­or­di­na­tion of clin­i­cal tri­als, de­vel­op­ment of man­u­fac­tur­ing meth­ods and mul­ti­ple oth­er as­pects of de­vel­op­ment, sug­gest­ing a nar­row view of the R&D process and risk com­pa­nies face at the out­set of an un­cer­tain project.

More fun­da­men­tal­ly, the study ex­cludes the sig­nif­i­cant cost as­so­ci­at­ed with un­suc­cess­ful drug can­di­dates and tri­als. De­vel­op­ing in­no­v­a­tive new med­i­cines is a long and com­plex process fraught with more set­backs than suc­cess­es. Less than 12 per­cent of med­i­cines en­ter­ing a phase one clin­i­cal tri­al will ul­ti­mate­ly be ap­proved for use by pa­tients. Set­backs are an in­evitable part of the R&D process, and they must be fac­tored in­to the cost of dis­cov­er­ing new med­i­cines.

Maybe the moral to this sto­ry is that fail­ure is pricey, but late-stage suc­cess can be rel­a­tive­ly cheap. And that puts a dif­fer­ent spin on the big val­ues we’ve been see­ing for ex­per­i­men­tal drugs with some hu­man da­ta to back them up.

 

John Hood [file photo]

UP­DATE: Cel­gene and the sci­en­tist who cham­pi­oned fe­dra­tinib's rise from Sanofi's R&D grave­yard win FDA OK

Six years after Sanofi gave it up for dead, the FDA has approved the myelofibrosis drug fedratinib, now owned by Celgene.

The drug will be sold as Inrebic, and will soon land in the portfolio at Bristol-Myers Squibb, which is finalizing a deal to acquire Celgene.

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UP­DAT­ED: AveX­is sci­en­tif­ic founder was axed — and No­var­tis names a new CSO in wake of an ethics scan­dal

Now at the center of a storm of controversy over its decision to keep its knowledge of manipulated data hidden from regulators during an FDA review, Novartis CEO Vas Narasimhan has found a longtime veteran in the ranks to head the scientific work underway at AveXis, where the incident occurred. And the scientific founder has hit the exit.

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Ab­b­Vie gets its FDA OK for JAK in­hibitor upadac­i­tinib, but don’t look for this one to hit ex­ecs’ lofty ex­pec­ta­tions

Another big drug approval came through on Friday afternoon as the FDA OK’d AbbVie’s upadacitinib — an oral JAK1 inhibitor that is hitting the rheumatoid arthritis market with a black box warning of serious malignancies, infections and thrombosis reflecting fears associated with the class.

It will be sold as Rinvoq — at a wholesale price of $59,000 a year — and will likely soon face competition from a drug that AbbVie once controlled, and spurned. Reuters reports that a 4-week supply of Humira, by comparison, is $5,174, adding up to about $67,000 a year.

The top 10 fran­chise drugs in bio­phar­ma his­to­ry will earn a to­tal of $1.4T (tril­lion) by 2024 — what does that tell us?

Just in case you were looking for more evidence of just how important Amgen’s patent win on Enbrel is for the company and its investors, EvaluatePharma has come up with a forward-looking consensus estimate on what the list of top 10 drugs will look like in 2024.

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ICER blasts FDA, PTC and Sarep­ta for high prices on DMD drugs Em­flaza, Ex­ondys 51

ICER has some strong words for PTC, Sarepta and the FDA as the US drug price watchdog concludes that as currently priced, their respective new treatments for Duchenne muscular dystrophy are decidedly not cost-effective.

The final report — which cements the conclusions of a draft issued in May — incorporates the opinion of a panel of 17 experts ICER convened in a public meeting last month. It also based its analysis of Emflaza (deflazacort) and Exondys 51 (eteplirsen) on updated annual costs of $81,400 and over $1 million, respectively, after citing “incorrect” lower numbers in the initial calculations.

The key dates for KRAS watch­ers through the end of the year — the trail is nar­row and risks are ex­treme

There’s nothing quite like a big patent win when it comes to burnishing your prospects in the pipeline. And for Amgen, which seems to have rescued Enbrel for a run to 2029, the cheering section on Wall Street is now fixed on AMG 510 and a key rival.

And it didn’t take much data to do it. 

There was the first snapshot of a handful of patients, with a 50% response rate. Then came word that Amgen researchers are also tracking responses in different cancers, at least one in colorectal cancer and appendiceal too. 

Bain's Or­ly Mis­han joins Pfiz­er's neu­ro spin­out Cerev­el; On­colyt­ic virus biotech taps Sil­la­Jen ex­ec He­le­na Chaye as CEO

→ Bain Capital is deploying one of its top investors to Cerevel Therapeutics, steering a $350 million-plus neuro play carved out of Pfizer. Orly Mishan — a co-founder and principal of Bain’s life sciences unit — was involved in the partnership that birthed the biotech spinout in the first place. As Cerevel’s first chief business officer, she is tasked with corporate development, program management as well as technical operations. 

UP­DAT­ED: Sci­en­tist-CEO ac­cused of im­prop­er­ly us­ing con­fi­den­tial in­fo from uni­corn Alec­tor

The executive team at Alector $ALEC has a bone to pick with scientific co-founder Asa Abeliovich. Their latest quarterly rundown has this brief note buried inside:

On June 18, 2019, we initiated a confidential arbitration proceeding against Dr. Asa Abeliovich, our former consulting co-founder, related to alleged breaches of his consulting agreement and the improper use of our confidential information that he learned during the course of rendering services to us as our consulting Chief Scientific Officer/Chief Innovation Officer. We are in the early stage of this arbitration proceeding and are unable to assess or provide any assurances regarding its possible outcome.

There’s no explicit word in the filing on what kind of confidential info was involved, but the proceeding got started 2 days ahead of Abeliovich’s IPO.

Abeliovich, formerly a tenured associate professor at Columbia, is a top scientist in the field of neurodegeneration, which is where Alector is targeted. More recently, he’s also helped start up Prevail Therapeutics as the CEO, which raised $125 million in an IPO. And there he’s planning on working on new gene therapies that target genetically defined subpopulations of Parkinson’s disease. Followup programs target Gaucher disease, frontotemporal dementia and synucleinopathies.

But this time Abeliovich is the CEO rather than a founding scientist. And some of their pipeline overlaps with Alector’s.

Abeliovich and Prevail, though, aren’t taking this one lying down.

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Chi­na has be­come a CEO-lev­el pri­or­i­ty for multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies: the trend and the im­pli­ca­tions

After a “hot” period of rapid growth between 2009 and 2012, and a relatively “cooler” period of slower growth from 2013 to 2015, China has once again become a top-of-mind priority for the CEOs of most large, multinational pharmaceutical companies.

At the International Pharma Forum, hosted in March in Beijing by the R&D Based Pharmaceutical Association Committee (RDPAC) and the Pharmaceutical Research and Manufacturers of America (PhRMA), no fewer than seven CEOs of major multinational pharmaceutical firms participated, including GSK, Eli Lilly, LEO Pharma, Merck KGaA, Pfizer, Sanofi and UCB. A few days earlier, the CEOs of several other large multinationals attended the China Development Forum, an annual business forum hosted by the research arm of China’s State Council. It’s hard to imagine any other country, except the US, having such drawing power at CEO level.