What's the hard cost of a piv­otal drug tri­al? A lot less than you might ex­pect

Of all the num­bers cit­ed by bio­phar­ma com­pa­nies to de­fend drug costs, $2.6 bil­lion — the es­ti­mat­ed cost of bring­ing a pre­scrip­tion drug to mar­ket — is by far the most pop­u­lar and res­o­nant. But per­haps less well-known was the Tufts re­searchers’ es­ti­mate of the av­er­age cost of Phase III tri­als, the most ex­pen­sive and ar­guably im­por­tant com­po­nent to scor­ing an OK: $255 mil­lion in 2014 dol­lars.

A new study is out to chal­lenge that.

Thomas Moore

Af­ter plug­ging de­tails about 101 new drugs ap­proved be­tween 2015 and 2017 in­to a clin­i­cal tri­al cost es­ti­ma­tor cre­at­ed by IQVIA, the au­thors con­clud­ed that the es­ti­mat­ed me­di­an piv­otal tri­al cost was $48 mil­lion, with an in­terquar­tile range of $20 mil­lion to $102 mil­lion. When you look at the 225 in­di­vid­ual tri­als, the me­di­an cost was $19 mil­lion (IQR $12 mil­lion to $33 mil­lion).

Per­haps more im­por­tant­ly, the re­search pa­per, pub­lished in the BMJ, of­fered a break­down of the fac­tors con­tribut­ing to costs.

Chief among them is the num­ber of pa­tients re­quired to es­tab­lish the treat­ment ef­fects — which var­ied wide­ly from just 4 to 8,442. The num­ber of tri­al clin­ic vis­its (2-166) al­so mat­tered, as did the type of treat­ment.

Tri­als for dis­eases where com­mer­cial drugs that have been proven to be ef­fec­tive typ­i­cal­ly re­quire more pa­tient en­roll­ment, they not­ed. Led by Thomas Moore, the sci­en­tists work at the In­sti­tute for Safe Med­ica­tion Prac­tices, a non­prof­it that mon­i­tors drug safe­ty. On av­er­age, the tri­als with an ac­tive con­trol group had 653 pa­tients, com­pared with 547 for place­bo-con­trolled stud­ies and 145 for un­con­trolled ones.

In a nod to the FDA’s in­creas­ing will­ing­ness to speed through new meds serv­ing pa­tients with few op­tions, the au­thors not­ed that 45 out of 101 drugs were ap­proved with a sin­gle tri­al — which trans­lat­ed to a low­er me­di­an cost of $28 mil­lion (IQR $13 mil­lion to $62 mil­lion). Those bur­dened with a repli­ca­tion re­quire­ment of two tri­als had an es­ti­mat­ed me­di­an cost of $45 mil­lion (IQR $28 mil­lion to $69 mil­lion).

While by no means rep­re­sen­ta­tive of the full pic­ture, the num­bers can un­der­cut phar­ma’s ar­gu­ments about the high cost of de­vel­op­ing drugs, since the piv­otal tri­als ac­count for a sig­nif­i­cant por­tion of the R&D spend­ing.

Ex­pect the usu­al de­bates and dis­cus­sions to fol­low. As the au­thors them­selves ad­mit, the num­bers are mere­ly their best es­ti­mates and not ac­tu­al costs. They al­so weren’t able to as­cer­tain all tri­al fea­tures, falling back on de­fault val­ues that could be in­ac­cu­rate. Since it fo­cused on CRO costs, it ex­clud­ed spon­sor costs for tri­al de­sign, mon­i­tor­ing or pro­vid­ing the drug it­self.

Drug de­vel­op­ers might al­so add that in pric­ing new drugs, they fac­tor in failed projects — vir­tu­al­ly al­ways out­num­ber­ing the suc­cess­ful ones — and cost of cap­i­tal.

Still, the es­ti­mat­ed costs are mod­est for es­tab­lish­ing what amounts to the path guid­ing a drug to thou­sands or mil­lions of fu­ture pa­tients. Count­ing by per pa­tient en­rolled, the cost would just be $41,413. From the BMJ pa­per:

Note that these costs-per-pa­tient for these tri­als are some­times sim­i­lar to what phar­ma­ceu­ti­cal com­pa­nies charge for these same drugs to treat a sin­gle pa­tient or a hand­ful of pa­tients af­ter mar­ket­ing ap­proval.

FDA chief Stephen Hahn on Capitol Hill earlier this week (Getty Images)

As FDA’s work­load buck­les un­der the strain, Trump again ac­cus­es the agency of a po­lit­i­cal hit job

Peter Marks appeared before a virtual SVB Leerink audience yesterday and said that his staff at FDA’s CBER is on the verge of working around the clock. Manufacturing inspections, policy work and sponsor communications have all been pushed down the to-do list so that they can be responsive to Covid-related interactions. And the agency’s objective right now? “To save as many lives as we can,” Marks said, likening the mortality on the current outbreak as equivalent to “a nuclear bomb on a small city.”

Mi­no­ryx and Sper­o­genix ink an ex­clu­sive li­cense agree­ment to de­vel­op and com­mer­cial­ize lerigli­ta­zone in Chi­na

September 23, 2020 – Hong Kong, Beijing, Shanghai (China) and Mataró, Barcelona (Spain)  

Minoryx will receive an upfront and milestone payments of up to $78 million, as well as double digit royalties on annual net sales 

Sperogenix will receive exclusive rights to develop and commercialize leriglitazone for the treatment of X-linked adrenoleukodystrophy (X-ALD), a rare life-threatening neurological condition

President Donald Trump reacts after signing an executive order following his remarks on his healthcare policies yesterday in Charlotte, North Carolina (Getty Images)

Op-ed: Will phar­ma re­al­ly pay for Trump’s lat­est law­less promise to 33 mil­lion Medicare ben­e­fi­cia­ries? Not like­ly

Sitting atop the executive branch, President Donald Trump is the ultimate authority at the FDA. He can fast track any vaccine to approval himself. If it came to that, of course.

What he can’t do is unilaterally order the legislative branch to loosen the Treasury’s coffers for $6.6 billion. Nor can he command pharmaceutical companies to pay for $200 vouchers sent to 33 million Medicare beneficiaries for prescription drugs before the election.

President Donald Trump and FDA Commissioner Stephen Hahn (AP Images)

FDA is­sues fi­nal rule al­low­ing im­por­ta­tion of drugs from Cana­da — but al­so keeps the pow­er to re­voke it

Just over a month away from the presidential election, the FDA has issued a final regulation fulfilling President Trump’s promise to let states import certain prescription drugs from Canada.

On Thursday, Trump told a crowd in North Carolina that the new rule goes into effect “today.” But the published regulation states that it won’t take effect for 60 days. And even then, it could be a while before cheaper drugs make it across the border.

The win­dow is wide open as four more biotechs join the go-go IPO class of 2020

It’s another day of hauling cash in the biopharma world as four more IPOs priced Friday and a fifth filed its initial paperwork.

The biggest offering comes from PMV Pharma, an oncology biotech focusing on p53 mutations, which raised $211.8 million after pricing shares at $18 apiece. Prelude Therapeutics, developing PRMT5 inhibitors for rare cancers, was next with a $158 million raise, pricing shares at $19 each. Graybug Vision raised $90 million after pricing at $16 per share for its wet AMD candidates, and breast cancer biotech Greenwich Lifesciences brought up the rear with a small, $7 million raise after pricing shares at $5.75.

J&J of­fers PhI/IIa da­ta show­ing its sin­gle-dose vac­cine can stir up suf­fi­cient im­mune re­sponse

Days after J&J dosed the first participants of its Phase III ENSEMBLE trial, the pharma giant has detailed the early-stage data that gave them confidence in a single-dose regimen.

Testing two dose levels either as a single dose or in a two-dose schedule spaced by 56 days in, the scientists from Janssen, the J&J subsidiary developing its vaccine, reported that the low dose induced a similar immune response as the high dose. The interim Phase I/IIa results were posted in a preprint on medRxiv.

Daniel O'Day, Gilead CEO (Kevin Dietsch/UPI/Bloomberg via Getty Images)

Play-by-play of Gilead­'s $21B Im­munomedics buy­out de­tails a fren­zied push — and mints a new biotech bil­lion­aire

Immunomedics had not really been looking for a buyout when the year began. Excited by its BLA for Trodelvy, submitted to the FDA in late 2019, executive chairman Behzad Aghazadeh started off looking for potential licensing deals and zeroed in on four potential partners, including Gilead, following January’s JP Morgan Healthcare Conference in San Francisco. Such talks advanced throughout the year, with discussions advancing to the second round in mid-August.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 90,600+ biopharma pros reading Endpoints daily — and it's free.

New York governor Andrew Cuomo (AP Images)

An­drew Cuo­mo says New York will un­der­take its own vac­cine re­view process, and wouldn’t rec­om­mend trust­ing the fed­er­al gov­ern­ment

The concerns keep mounting over President Donald Trump’s politicization of the FDA and other federal agencies guiding the development of a safe and effective vaccine. And today, the telegenic New York governor Andrew Cuomo appeared to introduce even more politics into the matter — latest in an ongoing series of incidents that have cast the proudly independent FDA in starkly political terms.

During his daily press conference Cuomo said that the state will review any coronavirus vaccines approved by the federal government, citing a lack of trust in the Trump administration. The announcement comes one day after Trump accused the FDA of making an “extremely political” move in proposing stricter vaccine guidance.

President Trump walks past HHS secretary Alex Azar (Getty Images)

Azar falls in line un­der Trump again. Ex­perts say he's re­in­forc­ing a dark sig­nal sent to the FDA

In the latest incident where Alex Azar has steadfastly taken the side of President Donald Trump over that of the FDA, the HHS secretary was noncommittal this morning when asked if he supports the attempt by his subordinates at the FDA to strengthen guidelines for a vaccine EUA.

Appearing on NBC’s Today Show, the HHS secretary muddied the waters, stating that the guidance that matters is the one that is “actually already out there.”