By Kate Greenwood
Cross-Posted at Heath Reform Watch
Lately it seems that each passing day brings another article about the cost of orphan drugs. Earlier this week at FiercePharma, Tracy Staton reported that the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) has asked Alexion Pharmaceuticals to justify the price of its drug Soliris which is, per Staton, “the most expensive drug in the world” at around $569,000 a year. Specifically, NICE seeks “‘clarification from the company on aspects of the manufacturing, research and development costs’” of the drug. According to Staton, this latest development in a review process characterized by “halting progress” is “a departure from NICE’s usual calculations, which typically focus on quality-of-life years and the like.”
Pushback by NICE and other payers notwithstanding, the orphan drug market is growing. As I blogged about here, in 2013 EvaluatePharma estimated that “the worldwide orphan drug market is set to grow to $127 [billion], a compound annual growth rate of +7.4% per year between 2012 and 2018[,]” which “is double that of the overall prescription drug market, excluding generics, which is set to grow at +3.7% per year.” In a recent article in the New England Journal of Medicine, venture-capital investors Robert Kocher and Bryan Roberts note that “more than half of the 139 drugs approved by the FDA since 2009 are for orphan diseases” and suggest that there is a risk of “systematically underinvesting in other important areas of medicine.”
Kocher and Roberts’ explain that one reason that orphan drugs attract investment is that their development costs are low. The problem or potential problem of underinvestment in diseases like depression and diabetes could therefore be addressed, they contend, by bringing the cost of developing treatments for these common conditions in line with the cost of developing treatments for rare diseases. And, they argue, one promising approach to doing so is to reduce clinical trial costs by reducing the size of clinical trials. In the report I cited above, EvaluatePharma estimated that for orphan drugs regulators require a median phase III trial size of 528 patients, at an estimated average cost of $85 million, whereas for non-orphan drugs they require 2,234 patients, at an estimated average cost of $186 million.
Kocher and Roberts believe that “most clinical development programs go far past the point of diminishing returns for frequent safety events, but they do not go far enough to permit detection of rare events.” They therefore advocate for a package of reforms, including (1) “[r]edesigning trials to include fewer patients,” (2) “providing conditional approval of drugs,” and (3) “requiring postmarketing surveillance[.]” The last two proposals are relatively uncontroversial; the first is much more so. In a 2011 article in JAMA, for example, Aaron Kesselheim and colleagues found that “although both newly approved orphan and nonorphan cancer drugs in [their] sample were tested in relatively small numbers of patients prior to approval,” there was a higher rate of adverse events associated with the orphan drugs, suggesting safety concerns. Kesselheim and colleagues argued that rather than extending the flexibility on clinical trial size that is currently afforded to orphan drugs, Congress should consider restricting it, to “first-in-class drugs or those that treat a condition for which no other treatments are available[.]”
Legislation or a change in the Food and Drug Administration’s position to allow for an across-the-board reduction in clinical trial size seems highly unlikely. That said, both Congress and the FDA have demonstrated a willingness to work to reduce development costs, including by allowing for surrogate outcomes where appropriate and by speeding the agency’s approval process. Moreover, in certain cases, governments have reduced sponsors’ development costs directly. As Hester Plumridge reported in the Wall Street Journal in January, the “unfavorable economics” of antibiotics development are changing, in part because “[r]esearch funding is beginning to flow[.]”
In contemporary clinical trial (CT) design, the size of the trial population required is dictated by the staistical need to achnieve results that are significant at a predetermined probability, most commonly 0.05. In dealing with rare diseases, the size of the potential CT population is per se limited, whereas with more common diseases, it is not. As was emphasized in the IOM study “Drug Safety,” (on which I served), published in 2006 or 07-07, any schema permitting “accelerated approval” by the FDA must be accompanied by enforcable marketing restrictions and time;ly completion of mandatory, rigorously designed post-market CTs, the necessity of which is self-evident. Thus, pre-marketing studies are characterized by strict selection of CT populations using inclusion and exclusion criteria, and American physicians have complete freedom to prescribe marketed drugs for any diseases in any patient populations they desire. However, the track record of the industry in conducting such “required” post-marketing trials, or, obversely, of the FDA’s enforcement of marketing restrictions, or its success in ensuring that such CTs are initiated and completed timely, is abysmal, as was pointed out in several severely critical studies published by the DHHS’ OIG during the past 2 decades. So, yes, smaller and less expensive pre-marketing CTs arecertainly conceivable, but the track record in the US of the effective oversight demanded by such efforts is not at all reassuring.
Thank you very much for your comment, Dr. Korn. I agree with you that enforceable post-market study and surveillance requirements are a necessary accompaniment to any move to smaller and less expensive pre-market clinical trials.