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Orphan Drugs Escape the FDA’s Stranglehold on Development

In Regulation & Government by Cameron

The headquarters of the U.S. Food and Drug Administration is shown in Silver Spring near Washington

Developing new drugs is expensive. Matthew Herper of Forbes recently calculated that the cost over development per drug approved (taking on board the R&D costs of drugs that do not gain approval) rested just shy of $6 billion per drug for 12 of the larger Pharma players.

The cause of this huge price tag? Phase III clinical trials. That is the conclusion of a report published last month by New York’s Manhattan Institute. In Stifling New cures: The true cost of lengthy clinical drug trials author Avik S. A. Roy blames the increased length and complexity of phase III trials for the massive cost increases we have seen over the last 40 years.

Between 1999 and 2005 the average length of a Phase III trial increased by 70%; the average number of procedures per PIII increased from 95 to 158; whilst stricter enrolment criteria has reduced trial volunteer numbers by 21%. All in, Phase III trials account for as much as 90% of expenditure for drugs that gain approval.

But what does this mean for orphan drug developers?

The bad news is that phase III trials still represent around 90% of expenditure for approved orphan drugs. But the costs of developing orphan drugs is far more manageable thanks to the greatly reduced trial criteria desired by the FDA. And for those drugs that have been granted accelerated access or breakthrough therapy designations, such as Seattle Genetics Adcetris for Hodgkin lymphoma, the costs of phase III trials are reduced dramatically.

Take Alexion’s Soliris, which commands $800 million a year in sales, the total number of patients involved in clinical trials I-III was just 206, compared to the thousands and hundreds of thousands involved in the testing of drugs for more common illnesses.

The tables below show the extent of the void between orphan drug trials and clinical trials for other drugs that have made it to market.

See the full report here.