The True Costs of Pivotal Trials That Support FDA Approval

Marcia Frellick

October 01, 2018

Median costs for pivotal trials that led to US Food and Drug Administration (FDA) approval for novel drugs were $19 million in 2015 and 2016, according to a study published online September 24 in JAMA Internal Medicine.

Thomas J. Moore, AB, from the Institute for Safe Medication Practices in Alexandria, Virginia, and the Department of Epidemiology and Biostatistics at the Milken Institute of Public Health at George Washington University in Washington, DC, and colleagues, used proprietary clinical trial cost estimation software to evaluate costs for 138 pivotal clinical trials that led to the approval of 59 therapeutic agents.

Among the 59 drugs, the most common targets were cancer (18 drugs [30.5%]), endocrine and metabolic diseases (9 drugs [15.2%]), and central nervous system disorders (8 drugs [13.6%]).

Although the median cost of the trials was $19 million (interquartile range [IQR], $12.2 million - $33.1 million), costs varied widely.

The lowest was a mean estimate of $2.1 million (95% confidence interval [CI], $1.8 million - $2.5 million) for a small pivotal study among four patients to test uridine triacetate for orotic aciduria, a rare genetic metabolic disorder. The highest was $346.8 million (95% CI, $252.0 million - $441.5 million) for a noninferiority trial of a combination cardiovascular drug for chronic heart failure, sacubitril-valsartan.

In general, costs were higher when large numbers of patients were needed to power the trial for treatment benefit, or when the new drug had to be proven to have noninferior clinical benefit compared with an agent already available.

As an example, the average cost for trials with fewer than 100 patients was $5.9 million, whereas trials with more than 1000 patients had an average cost of $77.2 million.

Trials Small Part of Development Cost

In most cases, the authors note, the costs of pivotal clinical trials appear to make up a small part of overall drug development.

"Our study provides 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," the authors write.

"We Get What We Pay For"

Joseph S. Ross, MD, MHS, from the Department of Medicine at Yale University School of Medicine in New Haven, Connecticut, and associate editor of JAMA Internal Medicine, writes in an accompanying editor's note that the evidence in the study suggests, "we get what we pay for."

The study "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 be sure that we prioritize spending our health care resources on therapies that have been shown to benefit patients," he writes.

He notes that an important limitation of the study by Moore and colleagues is that it focused only on individual pivotal trial costs and did not calculate the costs of all the evidence needed to get FDA premarket approval or fulfill postmarket demands.

Pediatric Exclusivity Extensions

In a related article published in the journal, Michael S. Sinha, MD, JD, MPH, from the Program on Regulation, Therapeutics, and Law at Brigham and Women's Hospital, and the Department of Medicine at Brigham and Women's Hospital and Harvard Medical School in Boston, Massachusetts, and colleagues, examined the costs of trials completed under the FDA Pediatric Exclusivity Extension.

Congress began the program because few prescription drugs that were approved for adults were being tested on children in clinical trials before they were widely used off-label for children.

The FDA began offering the incentive of extending the market monopoly on a brand-name prescription drug for 6 months if the manufacturer agreed to test the drugs in children.

"Some of these drugs have gross sales of more than $1 billion annually in the adult market, so 6-month market exclusivity extensions pose substantial costs to all patients and payers," the researchers note, and provide lucrative benefits to drug makers.

Investment vs Benefit

Sinha and colleagues identified 54 drugs that had earned the extension between 2007 and 2012, and calculated the benefits gleaned from having done the trials and the cost to consumers.

The 141 trials in their sample that led to the 54 drugs gaining the extension enrolled 20,240 children (interquartile range [IQR], two to three trials and 127 - 556 patients per drug). These trials resulted in 29 extended indications to children and three new indications, as well as additional safety information being issued for 16 drugs.

The median cost of investment for trials was $36.4 million (IQR, $16.6 - $100.6 million).

"Among 48 drugs with available financial information, median net return was $176.0 million (IQR, $47.0 million to $404.1 million), with a median ratio of net return to cost of investment of 680% (IQR, 80% - 1270%)," the authors write.

The net return, also considered the cost to consumers, is the difference between the additional revenue and the cost of investment for the trials. It is the money that goes from the payers and patients to the drug company.

Net return also includes the money consumers could have saved if pediatric trials had been directly funded by the federal government.

The authors conclude, "Meaningful knowledge of pediatric uses of pharmaceuticals has come from the pediatric exclusivity program, but at a high cost; other approaches to pediatric research, such as direct funding of such studies, may be more economically efficient."

They note that taxpayers already foot the bill for the delayed availability of generic versions of drugs because government-sponsored prescription drug insurance programs cover more than 100 million patients.

Despite the substantial rewards to the drug manufacturers from the 6-month extended exclusivity, use of the program is declining, the authors say.

From 2000 through 2004, 19 exclusivity awards were granted each year and that dropped to seven awards per year between 2010 and 2014.

The Moore and colleagues study was supported in part by a grant from the Laura and John Arnold Foundation and in part by a grant from the Johns Hopkins Bloomberg School of Public Health, Center of Excellence in Regulatory Science and Innovation, a collaborative research initiative with the FDA. A coauthor reported serving as chair of the FDA's Peripheral and Central Nervous System Advisory Committee, serving as a paid adviser to IQVIA (the developer of the clinical trial estimation software), serving on the advisory board of MesaRx Innovations, being a member of OptumRx's National P&T Committee, and holding equity in Monument Analytics, a consultancy that provides services to the life sciences industry and to plaintiffs in opioid litigation. These arrangements have been reviewed and approved by Johns Hopkins University in accordance with its conflict of interest policies. In the Sinha and colleagues study, the authors report support from the Laura and John Arnold Foundation, funding from the Engelberg Foundation and the Harvard Program in Therapeutic Science, support by the Perls Family Foundation, the Open Society Foundation, and the Kaiser Foundation Health Plan & Hospitals. One coauthor reports grants from the FDA Office of Generic Drugs and Division of Health Communication (2013 - 2016). Editor's note author Ross reports receiving grant funding through Yale University from the FDA as part of the Centers for Excellence in Regulatory Science and Innovation program, and from Johnson and Johnson to develop methods for clinical trial data sharing. Ross is also an ad hoc member of the Medicare Evidence Development & Coverage Advisory Committee.

JAMA Intern Med. Published online September 24, 2018. Moore abstract, Sinha abstract , Editor's note extract

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