PHARMACEUTICALS Drug Development Developing a new drug is long, uncertain, and expensive. o On average, 1 drug takes 16 years to develop. -- long time O On average, 1/5 (20%) approval from Phase I. - competitive process Early stages = searching for brilliant insights (discovery/preclinical phase) Understand how the disease works Hypothesize how the drug would intervene Identify favorable compounds -- effective, but not toxic Test compounds -- in vitro and in vivo Pick winning compound (computer, modeling, chemistry) Ex: Herceptin took at least 13 years to develop Binds to excess HER2 proteins and targets them to die (regulates growth and development of cells -- cancer) Changing Technology of Discovery 0 1900-1980s: chemical substances used 0 post 1980s: both chemical and biological products (due to breakthroughs in microbio, genetics, and proteins/antibodies The Government's Role: The gov't closely regulates the drug development, manufacturing, and marketing processes. o Issue patents where appropriate. Safety and efficacy. Before Phase I: Safe enough to test on humans? Phases I-II1: Determine appropriate clinical outcomes Post Phase Ill: Evaluate the drug's performance -- is there a statistically significant improvement? Post-approval: monitor adverse drug reaction incidents Clinical Development and Approval Times o Biological products take more time than pharmaceuticals. o Phase III (clinical effectiveness studies) are most time-consuming. How does the FDA make approval decisions? Looks only at efficacy endpoints and whether it is more safe/effective than other drugs already on the market. Are there health benefits? Do the benefits outweigh the side effects? ) Balance Type I (approve drug that is later found to have harmful side effects) and Type IIl (delay or don't approve a drug that proves to be beneficial). Type I errors are visible and receive a lot of media attention.
The FDA does NOT consider the price of the drug.
The cost of developing a new drug has increased substantially over time: In 2000, $802 billion to assure that 1 will be approved. Why are biotech and pharma companies willing to spend over $60 billion (collectively) per year to develop new drugs?
Patents are essential to recoup the large R & D costs. Prevent other firms from producing an identical (generic) copy of the drug for the life of patent -- 20 years. Allow a firm to charge above its production cost, to make a profit. Do not provide perfect monopolies: still have to compete with other unique drugs with different chemical/biologic structures treating the same disease Basically, provide "winning firms" with a reward, so firms are willing to invest substantial money. Once a patent expires, about 90% of patients switch to generic drug. As a marketing strategy, once you're about to lose patent protection you stop marketing drug bc NEW companies would get the benefit. The generic needs to prove bioequivalence, but doesn't have to go through any Phase trials A generic drug is much less expensive than the branded drug. o The profits for generic firms are low bc competing. o Why do any patients still buy the branded drug? Do