[Ip-health] Bayh Dole Rights, Size of Clinical Trials, 2004 Approvals

Tue Jul 11 19:02:02 2006

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Jamie,

I feel like I am in the movie "Groundhog Day."  I have addressed this
sort of thing with you in years past.  You cannot make inferences about
full R&D costs from just clinical trial size numbers (even correct
numbers, which you do not have).  There is also enough noise in the
underestimates to make your ratio by therapeutic rating questionable.  I
do not wish to keep revisiting this.  I will simply point readers to a
commentary (which I would have thought you had seen) that I posted on
WHO's CIPIH website about a year and a half ago in response to a
commentary from Aidan Hollis on me-toos that deals (albeit in the
context of a discussion about "me-toos") with your point:
http://www.who.int/intellectualproperty/forum/HollisResponse.pdf

For convenience, the relevant part on my comment is copied below:

> Professor Hollis does note and rely on an analysis in Love (2003) that
> uses the FDA therapeutic ratings for new molecular entities (NMEs)
> approved from 1993 through 2002 to claim that =93the share of
> investments in new products that have significant improvements over
> existing treatments is 20 percent, with 80 percent of the investment
> in new products spent on projects that demonstrate no significant
> improvement over marketed products.=94  This percentage breakdown is
> based only on two ratios.  There are a number of problems with the
> calculation.  One of the ratios used is the percentage share of NMEs
> that were priority-rated by the FDA for NMEs approved from 1993 to
> 2002.  The value of the ratio is based on an arithmetic error.  Love
> (2003, p.17) has a table giving the annual numbers of priority and
> standard NMEs for 1993 to 2002.  The annual numbers are correct and
> the sum of standard NME approvals is correct.  However, the sum of
> priority NMEs given in the table is wrong.  Love (2003) has 79
> priority NMEs in total for this period when the actual number is 120.
> The correct number raises the percentage of NMEs with priority ratings
> from the 31% that Love (2003) has to 40%.[1] <#_ftn1>
>
>
>
> The other ratio used is a ratio of clinical trial sizes for priority
> and standard-rated drugs, where the clinical trial sizes were obtained
> from some FDA documents.  These documents do not include discussions
> and data for all clinical studies conducted on investigational drugs.
> This is acknowledged in Love (2003), but it is argued there that this
> should not affect the ratio of clinical trial sizes.  That is somewhat
> dubious given that the differences between clinical trial sizes
> obtained in this way and actual clinical trial sizes are likely highly
> variable by drug.  However, even if we put that concern aside, there
> is no reason to believe that the amounts spent during the clinical
> testing period on a per subject basis is fixed across therapeutic
> ratings.  This is an implicit assumption in the Love (2003)
> calculation.  Results in DiMasi et al. (2003) suggest that costs per
> subject for priority-rated approved new drugs were 16% higher than for
> standard-rated drugs (down from 42% higher for an earlier period with
> a three-tiered rating system [DiMasi et al., 1991] with the two higher
> ratings compressed into one group).  If we applied the correct share
> of NME approvals for priority drugs for the period given and a 16%
> higher cost per subject for priority NMEs, then the expenditure share
> for priority NMEs increases from 20% to 44%.
>
>
>
> The estimation of such shares for approved drugs, however, is of
> questionable validity and significance.  Two important factors not
> considered in these calculations are discovery costs and clinical
> success rates.  If discovery costs are higher and success rates are
> lower for priority drugs, then an estimation of the type in Love
> (2003) could substantially underestimate the share of total
> expenditures attributed to priority drugs.  Beyond these
> considerations, attempts to draw normative conclusions based just on
> distinctions between spending on priority and standard drugs is highly
> questionable given results in DiMasi and Paquette (2004) that indicate
> that development of drugs that eventually get standard ratings is
> often done more or less in parallel with drugs that get priority
> ratings and because the likelihood of finding at least one molecule in
> a class that has an acceptable risk/benefit ratio increases with the
> number of independent development efforts.[2] <#_ftn2>
>
> ------------------------------------------------------------------------
>
> [1] <#_ftnref1> Prior to enactment of the user fee program and the
> priority/standard two-tiered rating system, the share of NMEs that
> were rated the equivalent of priority was 49% (A and B ratings in a
> three-tiered system).  For the two years subsequent to the end of the
> period used in Love (2003), the share of NMEs that received priority
> ratings increased to 43% for 2003 and 56% for 2004 (including five
> biologics moved to FDA=92s CDER from CBER in a reorganization in 2003
> that shifted the review of most biologics to the drug center; the
> share was 52% excluding the five biologics).
>
> [2] <#_ftnref2> See, for example, discussions in Scherer (1966) and
> Scotchmer (2004) regarding innovation in general.  To put the matter
> formally in a simple context, suppose that N firms pursue different
> independent approaches to developing a drug in a new, but unproven,
> class, and that the probability of failure, q, is the same for all
> firms.  Then, the probability that at least one investigational drug
> will be found that has an acceptable risk/benefit ratio is 1-q^N .
> Thus, the likelihood of at least one success increases with the number
> of firms pursuing different molecules in a class.  This observation
> alone does not tell one what the socially optimal number of
> experimental approaches is, but we would certainly expect that in
> general it is greater than one.
>

Joe DiMasi

James Love wrote:

> Joe, I was wondering if you would comment on this issue.  In two of
> these studies, Michael has found far fewer  patients (a little more
> than half) in clinical trials for FDA priority drugs, than for the
> drugs the FDA classifies as "standard."    This would suggest the
> costs associated with R&D for "priority" products is quite a bit
> lower (assuming that any product is allowed to be "below average" in
> terms of costs), since the costs of clinical trials are highly
> correlated with the size of the trials.
>
> Jamie
>
>
> On Jul 10, 2006, at 5:40 PM, Joseph DiMasi wrote:
>
>> Mike,
>>
>> I have been down this road on clinical trial sizes before with Jamie.
>> First of all, the results from the study refer to a particular
>> period in
>> the past, not 2004.  Second, and more important, the numbers that you
>> pull out of labels or reviewer summary documents posted on the web
>> need
>> not come anywhere close to the number of subjects actually studied
>> prior
>> to a U.S. approval.  The FDA labels and documents will often just note
>> what the reviewers considered to be trials that were pivotal to  the
>> indication that was approved (i.e., often a few relevant phase III
>> trials).  You cannot assume that what you pick out of these sources
>> represents the entirety of clinical testing.  Third, we noted in our
>> study data gathered independently by PAREXEL and reported for various
>> years in their compendium of pharmaceutical industry R&D statistics
>> that
>> had a mean of 5,621 for a period  relevant to our study.
>>
>> Joe DiMasi
>>
>>
>>
>> Mike Palmedo wrote:
>>
>>> http://www.cptech.org/blogs/drugdevelopment/2006/07/bayh-dole-
>>> rights-size-of-clinical.html
>>>
>>>
>>> Bayh Dole Rights, Size of Clinical Trials, 2004 Approvals
>>>
>>> July 10, 2006
>>> Mike Palmedo
>>>
>>> CPTech has looked at the patents for New Molecular Entities (NMEs)
>>> that
>>> came to the market in 2004.
>>>
>>> Excluding antibiotics, which do not have Bayh-Dole listings in their
>>> patents, the FDA approved 19 NMEs in 2004. Nine of these received
>>> priority status for approval, meaning they were found to have
>>> significant therapeutic gain over existing medicines. The
>>> remaining 10
>>> NMEs were given standard approvals.
>>>
>>> For the products for which data was available, I looked up the
>>> number of
>>> patients cited by the FDA in approving the medicines. (I had to
>>> exclude
>>> three of the priority NMEs approved in 2004 for which the label
>>> did not
>>> include the number of patients) The average (mean) number of
>>> patients in
>>> the clinical trials on which the FDA approvals were based was 1073
>>> for
>>> priority drugs and 1840 for standard drugs. The median numbers of
>>> patients in these clinical trials were 1290 for the priority drugs
>>> and
>>> 2058 for the standard drugs. These figures are considerably lower
>>> than
>>> the average size of clinical trials used by DiMasi in his often-cited
>>> research on the cost of drug development =96 5,303 patients.
>>>
>>> The Orange Book lists 45 patents on the 19 NMEs. Three of these
>>> patents
>>> include clauses citing government funding and subsequent Bayh-Dole
>>> rights to use or license the patent. These three patents cover two of
>>> the nine drugs which received priority approval =96 two patents for
>>> Clolar
>>> (a leukemia drug sold by Genzyme) and one for Lyrica (a diabetes drug
>>> sold by Pfizer).
>>>
>>> A spreadsheet with the drugs, patents, and size of trials is
>>> online here:
>>> http://www.cptech.org/ip/health/rnd/2004nmes-07102006.xls
>>>
>>> [Posted by Mike Palmedo to Drug Development (with access) at
>>> 7/10/2006
>>> 03:59:00 PM]
>>>
>>>
>>> _______________________________________________
>>> Ip-health mailing list
>>> Ip-health@lists.essential.org
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>>>
>>
>> --
>> -----------------------------------------------
>> Joseph A. DiMasi, Ph.D.
>> Director of Economic Analysis
>> Tufts Center for the Study of Drug Development
>> Tufts University
>> 192 South Street, Suite 550
>> Boston, MA 02111
>> tel: 617-636-2116; fax: 617-636-2425
>> URL: http://csdd.tufts.edu
>> -----------------------------------------------
>>
>>
>> _______________________________________________
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>>
>
> ---------------------------------
> James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
> tel. +1.202.332.2670 / mobile +1.202.361.3040
>
> "If everyone thinks the same: No one thinks."  Bill Walton
>
>
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>

--
-----------------------------------------------
Joseph A. DiMasi, Ph.D.
Director of Economic Analysis
Tufts Center for the Study of Drug Development
Tufts University
192 South Street, Suite 550
Boston, MA 02111
tel: 617-636-2116; fax: 617-636-2425
URL: http://csdd.tufts.edu
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