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.

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”

De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.

Sen. Thom Tillis (R-NC) (J. Scott Applewhite/AP Images)

Phar­ma-friend­ly sen­a­tor calls on FDA for a third time to show patent pro­tec­tions should­n't be blamed for high drug prices

North Carolina Republican Sen. Thom Tillis made a name for himself in the 2020 election cycle as the darling of the pharma industry, accepting hundreds of thousands in campaign contributions, even from the likes of Pfizer CEO Albert Bourla.

Those contributions have led Tillis to attempt to re-write patent laws in pharma’s favor, a move which failed to gain steam in 2019, and request for a third time since January that the FDA should help stop “the false narrative that patent protections are to blame for high drug prices.”

EMA signs off on 3 drugs re­cent­ly re­ject­ed by FDA, in­clud­ing Bio­Mar­in's new he­mo­phil­ia gene ther­a­py

The EMA’s human medicines committee on Friday recommended three new drugs for approval or conditional approval, even as their US counterparts have rejected these three for various reasons.

In a major move, CHMP offered a thumbs-up to a conditional marketing authorization for the first gene therapy to treat severe hemophilia A, although the agency cautioned that it’s so far unknown how long the effects of infusion will last.

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Joe Papa (Ryan Remiorz/The Canadian Press via AP, File)

Joe Pa­pa re­signs as chair of Bausch Health as bil­lion­aire John Paul­son takes over

Joe Papa, chair of Bausch Health, officially resigned on Thursday and the board appointed billionaire hedge fund manager John Paulson as the new chair, effective immediately.

The specialty pharma company sought to make clear that Papa’s abrupt departure “was not due to any dispute or disagreement with the Company, its management or the Board on any matter relating to the Company’s operations, policies or practices.”

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