Drugs progress through the testing cycle by passing through incrementally more complex and expensive phases. To reach FDA approval, a drug must successfully clear up to four trials, which can cost anywhere from tens to hundreds of millions of dollars. And only 10% make it all the way to FDA approval.
We need these trials to ensure a drug is both safe and effective. But with an estimated total spend nearing $4B to successfully bring one drug to market, and 90% never making it all the way to market, manufacturers must make strategic decisions about which drugs to advance through the testing pipeline.
“It’s a balance between gathering the necessary information, fueling innovation, and the ability to support the cost of this innovation,” explains Tom Davies, PharmD, vice president of clinical products at RxBenefits. “We need to find a middle ground.”
Finding that middle ground requires careful assessment along each stage of the drug testing journey and adjusting as necessary. Sometimes, that means withdrawing when early results do not prove impactful.
One important opportunity, according to Davies, is recognizing the difference between agents that produce statistically meaningful results, and those whose results are clinically meaningful.
“Oftentimes, these trials demonstrate a treatment is more advantageous by outperforming the placebo. That statistical significance is helpful. However, we need to shift towards prioritizing clinical meaningfulness. For a blood pressure medication, is a two-point reduction clinically meaningful? It may be statistically meaningful.”
Defining benchmarks based on clinical significance allows manufacturers to focus resources more strategically on the most promising agents, fine-tune the evaluation process at pivotal touchpoints along the journey, and reduce wasteful spending.
Manufacturers must play the long game with potentially life-saving drugs that show early promise but whose long-term value can’t be assessed during initial trials. This is especially relevant for drugs that are urgently needed to treat cancer or Alzheimer’s.
“It’s important to have early access,” says Bradley Nelson, PharmD, vice president of clinical services at RxBenefits. “The market is screaming for it. We all have loved ones, but it’s also important to ensure that the surrogate endpoints (projected outcomes) assigned in the trials are confirmed.”
The FDA may require manufacturers to invest in long-term follow-up (phase 4) studies because, in some cases, a drug may mitigate symptoms or slow the disease progression but does not successfully extend life. Therein lies the complex relationship between statistical and clinical significance, and one of the challenges drug-makers face in deciding which drugs to advance through research and development and which to sunset from the market.
In the early 2000s, twenty-six medications were FDA-approved to treat cancer. Upon long-term follow-up, only three upheld their projected benefits.
“I understand innovation,” says Davies, “let’s get these drugs out to these patients as soon as possible and incorporate confirmatory trial data to make sure that, indeed, these medications are beneficial.
Specialty Drugs and Stifled Competition
As the medical field becomes more sophisticated in diagnosing and treating complex illnesses, so, too, are the drugs developed to manage that care.
Seventy-five percent of the drugs currently being studied are specialty drugs, which are more complex and expensive to develop. From 2021 to 2023, the average annual cost of an approved medication increased by 44%.
Managing the drug testing pipeline is critical not only in bringing the most effective, promising drugs to market, but in helping control the costs associated with this process.
”Innovation is necessary. These are life-changing, life-sustaining treatments,” says Davies. “Even so, the cost associated with these medications is not sustainable.”
To offset the sunk investment associated with testing drugs that never make it to market, manufacturers often decide to scale their drug prices. This is among the factors that push drug costs higher.
Additional complicating factors help protect manufacturer profits. These tactics can stifle competition and keep prices high. They include “evergreening,” or making clinically insignificant changes to packaging, administration, or drug ingredients, thus extending patent exclusivity for the manufacturer. In fact, 85% of patents filed with the FDA are for existing medications.
Drug companies also use so-called “pay-for-delay” tactics to incentivize generic manufacturers to hold off on releasing their generic alternatives, which extends the lifespan of the costlier original.
It’s appropriate for drug manufacturers to be profitable, especially when those profits can be reinvested in developing the right drugs, for the right patients, for the right reasons.
”Nobody begrudges the manufacturer for trying to meet patient needs,” says Nelson, “but there’s the potential misalignment of incentives when it comes to profitability, and that’s unfortunately part of our health system.”
All of this points to the need for careful cost controls and safeguards against artificially-stretched patents that slow competition.
There is hope on the horizon. Last year, the Senate unanimously approved a bill aimed at limiting the number of patents drugmakers can introduce and making it easier for generic and biosimilar competitors to enter the market.
”We’re at a tipping point to turn in a different direction to be more patient-focused and less dollar-focused,” says Nelson. “And I think we’re getting there.”
For more insights on pharmacy drug management from Bradley Nelson and Tom Davies, check out RxBenefits’ Pharmland podcast.
