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.
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.