[Ip-health] The growing gap between what the public had been told R&D costs are, and the actual costs
james.love at keionline.org
Mon May 27 01:06:02 PDT 2019
The Trump Administration is trying to block disclosure of actual clinical
trial costs in the WHO resolution setting norms for transparency of markets
for drugs and other medical technologies. This is a blog that walks people
some evidence on (1) how trial costs have been misrepresented in important
cases, and (2) how dramatically the size of trials has been declining,
particularly in recent years.
The growing gap between what the public had been told R&D costs are, and
the actual costs
May 27, 2019
One of the reasons why drug companies have fought so hard to block
transparency of clinical trial costs is the growing gap between what the
public had been told those costs are, and the actual costs, particularly
for treatments for cancer and rare diseases.
Some of the gap is related to the much lower number of patients enrolled in
trials, the growing use of expedited reviews, particularly in the United
States, and the shorter duration for some trials.
In April 2019, IQVIA published a report on 2018 FDA approvals, with these
Over two-thirds of new drugs in 2018 came through the regulatory process
under one of several tracks intended to accelerate development and review,
but over the past three years only those with accelerated approval and
breakthrough status have seen significantly shorter times from patent
filing to launch.
Of the NASs launched in 2018, 46% were also approved based on data from
trials with fewer than 500 subjects in total, as drugs types are
increasingly specialty, niche and orphan drugs, which typically enroll
fewer subjects. In addition, the amount of time a drug has been tested in a
patient population at time of approval — patient years at approval — is
APRIL 2019. The Changing Landscape of Research and Development Innovation,
Drivers of Change, and Evolution of Clinical Trial Productivity. IQVIA
Institute for Human Data Studies.
In his 2003 paper, Joseph DiMasi estimated the average cost of drug
development, including trials, pre-clinical outlays, costs of failures and
capital costs, to be $802 million. This estimate was based entirely on
project level data from clinical trials, which he used as a proxy for
pre-clinical outlays also. In 2003, DiMasi estimated the the total out of
pocket outlays on trials, in his still secret sample, at $125 million.
DiMasi also estimated that the average number of patients in trials for new
drug approvals were 5,303.
In a 2016 paper, DiMas more than tripled his estimate of development costs
to $2.6 billion. In the new paper, DiMasi claimed that on average, the
costs of phase 1-3 trials, for new drug approvals, was $339 million. Like
the 2003 paper, the $2.6 billion figure was based entirely on data on trial
costs, with a series of adjustments and extensions. DiMasi was asked by the
Union for Affordable Cancer Treatment (UACT) and others to disclose the per
patient costs and enrollment numbers for his new study, which also had a
confidential sample of data he obtained from the industry. But despite
fairly intense pressure to be more transparent, DiMasi would not provide
any numbers on enrollment or per patient costs, and few journalists pressed
him to do so.
Both the 2003 and the 2016 paper were actually announced at press
conferences, in 2016 with talking points only and without the text of the
paper, and were widely cited, even before the papers were actually
KEI’s own work has shown, that the number of patients cited in FDA medical
reviews for cancer drugs was systematically much lower than for non-cancer
drugs, in some years, less than a quarter of the enrollment for non-cancer
drugs. And also, the variances were huge. In 2010, more than half of all
patients enrolled in trials cited in medical reviews were patients in
trials for just 2 drugs.
In 2015, the FDA began publishing clinical trial snapshots. These included
the number of patients enrolled. We looked at this data and found that by
2015, the average number of patients cited in the snapshot was just 1,838,
or just 35 percent of DiMasi’s 2003 average estimate of patient enrollment.
The median was much smaller, just 768, or 42 percent of the average. The
largest enrollment was 11,145 and the smallest was just 4 patients. For
“priority” drugs, the median enrollment was 518, and for orphan products,
the median was 411.
In 2018, a record year for FDA approvals for novel products, the trial
patient enrollment numbers were dramatically lower. The average enrollment
for all products was 750, and the median was 441. The largest enrollment
was just 2,484, down 78 percent from 2015. In fact, the drug with the
highest enrollment had less than half the number of patients in the
snapshot that DiMasi’s 2003 estimate of the average enrollment.
For priority drugs, the median enrollment in 2018 was only 318 patients.
For orphan drugs, only 229.
There are differences in the DiMasi and FDA snapshot methodologies counting
trials, but the enormous differences in averages, and the declines in
snapshot number from 2015 to 2018 (an apples to apples comparison) are
For new cell and gene therapies, the numbers are even smaller.
The first two CAR T treatments are an illustration both of small trials and
the industry exaggeration of costs. Kymriah was developed at the University
of Pennsylvania (Penn) on NIH grants and patented by Dr Carl June. Penn
licensed the patents to Novartis. The 2017 FDA approval for Kymriah
involved just 63 patients. On May 17, I asked Dr. June how much CAR T
trials cost. He told me, $150,000 per patient, a number that was close to
twice as much as the 2015 PhRMA estimate of oncology trial costs per
patient. But with the FDA saying the trials had 63 patients, this put the
cost at under $10 million. Meanwhile, Novartis claimed outlays of more than
$1 billion on the treatment.
Yescarta, the CAR T licensed from the NIH and marketed by Gilead, was
approved based upon evidence from 100 patients. Again, Gilead is making all
sorts of claims about its R&D outlays.
At a recent conference on cell therapies in Washington, DC, experts
predicted that some new treatments would have trials as small as 10
Finally, on Friday, the US FDA approved Zolgensma, a new $2.1 million per
patient gene therapy for spinal muscular atrophy (SMA). Zolgensma was
licensed from a children’s hospital where it had been developed on NIH
grants, and was approved based upon evidence of just 21 patients treated
with Zolgensma. This is from the FDA press release:
"The safety and effectiveness of Zolgensma is based on an ongoing clinical
trial and a completed clinical trial involving a total of 36 pediatric
patients with infantile-onset SMA between the ages of approximately 2 weeks
and 8 months at study entry. The primary evidence of effectiveness is based
on results from the 21 patients treated with Zolgensma in the ongoing
There are a number of other issues regarding R&D costs that bear more
transparency and analysis, such as the practice of booking asset
acquisition costs and stock options as R&D outlays, or sorting out the
costs associated with post approval R&D from bring new treatments to
market, as well as identifying public subsides, such as tax credits,
It is no wonder that drug companies are keen to keep the actual costs of
trials secret, and to use DiMasi and other consultants to continue to spin
narratives on R&D costs that justify prices that increase every year. It is
time for more transparency, and governments should lead.
FDA Snapshot Enrollment Data
Go to https://www.keionline.org/30869 for table, or to
James Love. Knowledge Ecology International
U.S. Mobile +1.202.361.3040
U.S. office phone +1.202.332.2670
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