Building a 21st Century FDA shouldn’t be hard:
A 2010 study in the Journal of Clinical Oncology by researchers from the M.D. Anderson Cancer Center in Houston, Texas found that the time from drug discovery to marketing increased from eight years in 1960 to 12 to 15 years in 2010. Five years of this increase results from new regulations boosting the lengths and costs of clinical trials. The regulators aim to prevent cancer patients from dying from toxic new drugs. However, the cancer researchers calculate that the delays caused by requirements for lengthier trials have instead resulted in the loss of 300,000 patient life-years while saving only 16 life-years. If true, this is a scandal.
How much higher are the costs of getting a new drug through the FDA gantlet? A new study, “Stifling New Cures: The True Cost of Lengthy Clinical Drug Trials,” by Manhattan Institute senior fellow Avik Roy points out that in 1975 the pharmaceutical industry spent about $100 million on research and development (R&D) before getting a new drug approved by the FDA. By 1987, that had tripled to $300 million and that has since quadrupled to $1.3 billion. But even these figures may be too low. Roy cites calculations done by Matthew Herper of Forbes, who divides up the R&D spending of $802 billion by 12 big pharma companies since 1997 by the 139 drugs that have since gotten FDA approval to yield costs of $5.8 billion per drug.
Currently, new pharmaceuticals typically go through Phase I trials using fewer than 100 patients to get preliminary information on the drug’s safety. Phase II trials involve a few hundred subjects and further evaluate a new drug’s safety and efficacy. Phase III trials enroll thousands of patients to see how well it works compared to either placebo and/or other therapies and to look for bad side effects.
“The biggest driver of this phenomenal increase has been the regulatory process governing Phase III clinical trials of new pharmaceuticals on on human volunteers,” notes Roy. Between 1999 and 2005, clinical trials saw average increases in trial procedures by 65 percent, staff work by 67 percent, and length by 70 percent.
Not only do FDA demands for bigger Phase III clinical trials delay the introduction of effective new medicines, they dramatically boost costs for bringing them to market. Roy acknowledges that pre-clinical research that aims to identify promising therapeutic compounds absorbs 28 percent of the R&D budgets of pharmaceutical companies. Setting those discovery costs aside, Roy calculates that the Phase III trials “typically represent 90 percent or more of the cost of developing an individual drug all the way from laboratory to market.”
I’ve not been involved with many formal FDA risk analyses, but none I have seen have included the risk of delaying product release. This gets interesting because the formal risk analysis, itself, will normally delay product release for some time.