Understanding Drug Development - Why it Takes So Long & Costs So Much Money: A Four-Part Series


Part 3: Industry Will Get Us There

In Part 2, we talked about the first three steps of drug development. Now, let’s cover the rest.

Step 1: Discovery, Development and Validation Step 2: Preclinical Research & Testing Step 3: Establishing a Natural History Step 4: Industry Investment & Mass Production Step 5: Investigational New Drug (IND) Application Filing Step 6: Phase 1, 2 and 3 Clinical Trials Step 7: FDA Review (not the first, and not the last) Step 8: Post-Marketing Surveillance

Step 4: Industry Investment & Manufacturing

The next step on the path to bringing a treatment to market is the engagement of industry and solving the problem of how to effectively reproduce the treatment. In rare disease, these can be especially difficult hurdles to overcome.

While there are incentives for investment in rare diseases (also called orphan diseases) through the Orphan Drug Act that provides exclusivity, grants, and tax credits, it is still an uphill battle to engage for-profit companies in rare diseases like CMD. In a disease where prevalence is very low, or worse, prevalence is largely unknown, the exercise of bringing pharmaceutical companies to the table can be a roller coaster of hopes and failures. The number one question pharma wants to know about a disease in which a potential treatment has been identified is how many (treatable) patients are there? Basic economics tells us that each identified patient translates into revenue that must return at a higher rate than that invested, or the pharmaceutical company won’t be in business for very long. Depending on the size of the company, there are minimum thresholds of affected (and treatable) individuals that must be met before pharma will get involved. For smaller, scrappier, specialized companies, that threshold tends to be much lower.

Let’s take a minute to talk about the variability in pharma size and what that variability has meant to the development of treatments in rare diseases like CMD. “Big” pharma tends to be interested in “big” diseases -- diabetes, hepatitis, tuberculosis -- where the number of affected individuals begins in the hundreds of thousands and extends into the millions. Revenue for “big” diseases is (usually) a sure thing, meaning large companies can make their shareholders happy and stay in business. It also means that the cost per treatment can be relatively low and still garner a profit.

On the other side of the spectrum are smaller pharmaceutical companies, sometimes referred to as “start-ups” or “spin-offs” that may form as a result of academic discoveries. When we say “small”, we are sometimes talking about companies as small as 2-3 employees. These smaller companies tend to focus on a handful, or sometimes even only one disease and one treatment. They may be willing to take on more risk for the potential of a bigger reward, often by selling their work product to larger pharmaceutical companies once many of the steps have been successfully completed (in other words, de-risked). These companies are usually funded by venture capitalists who are also willing to go down that high-risk, high-reward road. This small pharma environment is often where rare disease treatments get a real chance of making it to market. Venture capitalist-funded small pharma is a relatively new phenomenon, but their existence will likely be the reason CMD treatments make it to the end of the drug development journey.

And here’s where things can get really expensive. The process of identifying a large enough pool of trial participants as well as a way to manufacture a safe, high-purity, high-yield treatment brings the cost of getting to market to a whole new level. Millions of dollars in Research & Development -- and sometimes ten or more years -- are spent on this process, many times resulting in failure. Sometimes, Phase 3 trials are held up by manufacturing issues because enough of the compound cannot be produced to supply the trial. This crucial element is the make-or-break step to advancing all of the work that has come before.

Step 5: Investigational New Drug (IND) Application Filing

Once a potential treatment has been identified in the lab, natural history and outcome measures have been characterized, and the ability to mass-produce the treatment compound has been proven, the next step involves submitting an Investigational New Drug (IND) application to the FDA. Clinical trials in human subjects cannot begin until the FDA approves this application. The FDA’s role is to ensure that results from preclinical testing in safety and efficacy are proven and repeatable, that the natural history of disease and outcome measures are clearly defined and measurable, and that the manufacturing process is sound. IND applications can be thousands of pages long, providing every bit of relevant documentation created from the very first step. IND application submittal requires the resources and expertise usually only found in pharma companies. Preparation and submission of an IND application and subsequent FDA hearings, rebuttals, and resubmissions can take several months to several years, and cost hundreds of thousands if not millions of dollars. The goal of this lengthy process is to ensure the safety of all involved, and decrease the chances of a Tuskegee experiment ever happening again.

If the FDA approves the IND application, then (finally!) human trials can begin.

Step 6: Phase 1, 2 and 3 Clinical Trials

Phase 1: Safety, safety, and safety.

Phase 1 clinical trials involve a fairly small number of healthy volunteers, or in the case of rare disease like CMD, affected individuals, purely aimed at determining how safe and tolerable various doses of the treatment are. The study examines how the treatment is absorbed and eliminated by the body and what side effects (if any) arise that are determined not to be part of the disease’s catalogued adverse events. And while the focus is not remotely on efficacy (producing the desired effect), observations are made about this. The primary aim of a Phase 1 clinical trial, aside from making sure it is safe, is establishing the maximum tolerable dose.

Once the study is complete and data is analyzed, a review of the full catalogue of data is made to determine whether or not moving on to Phase 2 is acceptable. Sometimes at this stage, additional pre-clinical work must be performed, or additional outcome measures must be developed before moving onto Phase 2. Phase 1 clinical trials can cost 2-5 million dollars and take 1-2 years to complete.

Phase 2: Safety and efficacy.

The primary difference between Phase 1 and Phase 2 clinical trials is that the number of participants is usually larger (perhaps from a few dozen to 100 or more if it’s possible to recruit that many participants). Study participants are also now always affected individuals, and not healthy volunteers. Safety remains a significant focus in Phase 2, carefully monitoring side effects. However, more emphasis is placed on on whether or not the treatment is working as expected. Dosage optimization is also established.

Results from Phase 2 must demonstrate successful efficacy and safety before the FDA will allow progression to Phase 3. This is a critical time in drug development where many potential treatments fail. Phase 2 clinical trials may cost 10-15 million dollars and may take 1-3 years to complete.

Phase 3: The end(point) is near!

While safety continues to be a top concern in Phase 3 clinical trials, efficacy must be proven by a clearly defined endpoint, such as: this drug improves forced vital capacity by 20%. If possible, Phase 3 studies recruit even more participants than Phase 2, and is by far, the longest and most costly stage of drug drug development to this point. Phase 3 clinical trials can cost 20 million dollars or more and may take 1-3 years to complete.

If the treatment being trialed can meet its primary endpoint and is proven safe, Phase 3 can be declared a success, and the drug is that much closer to being available for market.

Step 7: FDA Review (not the first, and not the last)

The next step in the process is the filing of a New Drug Application (NDA) with the FDA. This is the formal request for approval to market a treatment in the United States. Preparing the NDA is no small task; the application can be tens of thousands of pages long as it must contain all the research and safety data collected over the entire development process.

Preparation and submission of an NDA may cost around 2 million dollars and take several months to compile all of the evidence. There are also additional costs for the treatment sponsor related to the Prescription Drug User Fee Act (PDUFA), which allows the FDA to collect fees to fund the approval process.

The FDA then has almost a year to make their decision. During this time, physicians, statisticians, chemists, pharmacologists and other scientists are reviewing the application and periodically meeting with the treatment sponsor. They are also inspecting the facility where the treatment will be manufactured.

There are four designations that may be assigned to a treatment that can speed up this process. Each requires a separate application for review by the FDA, requiring additional time and money to complete.

Fast Track: Designed to facilitate development and expedite the review of treatments for serious conditions that fill an unmet medical need. This designation can be applied for early in the development process, before a Phase 1 trial begins.

Breakthrough Therapy: Designed to expedite the development and review of treatments intended to treat a serious condition where preliminary clinical evidence indicates that the treatment may demonstrate substantial improvement over currently available therapies on a clinically significant endpoint. The FDA encourages sponsors to submit breakthrough therapy applications following the close of Phase 2.

Accelerated Approval: Allows treatments for serious conditions that fill an unmet medical need to be approved based on a surrogate or intermediate clinical endpoint, thereby enabling the FDA to approve the treatment faster. A surrogate endpoint is a marker that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a treatment, such as an effect on irreversible morbidity and mortality. This application is submitted following the NDA and during phase 4/post-marketing surveillance.

Priority Review: Designed to direct overall attention and resources to the evaluation of applications for treatments that would be significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications. This can shorten the period of NDA review to within six months. This application is submitted around the same time as the NDA.

Once the FDA thoroughly examines all of the data collected from every stage of the process, they will make the decision to approve or not to approve the treatment for market (or delay their decision pending further information). If the treatment is approved, it becomes immediately available for public use. NDA approval also marks the beginning of exclusivity for creating and marketing a treatment - the duration of which depends on the type of exclusivity.

Step 8: Post-Marketing Surveillance

Approval for a treatment does not mean the process is complete. Post-marketing surveillance (sometimes referred to as Phase 4) of safety and efficacy will continue for several years once the treatment is on the market. Reasons for this may be that the treatment was not tested for interactions with other drugs, or on certain groups such as pregnant women or older affected individuals. Surveillance is designed to detect any rare or long-term adverse effects for the larger population and over a longer period of time than the previous trials. If it is discovered that the treatment isn’t having the proposed effect on the larger affected community, - or worse - harmful effects are discovered - the treatment could be subject to additional data collection in clinical trials before becoming available on the market, restricted to specific uses or population groups, or removed from the market all together. This would be a catastrophic failure, not to mention an incredible waste of precious time and money. Again, every step that came before must be done correctly to avoid such a tragedy. The minimum duration of this stage is two years, but can often be much longer. The cost could be 20 million dollars or more.

The process of drug development is long and expensive. From the very first stage of basic research through post-marketing surveillance, the total cost to bring a treatment to market is optimistically as low as 650 million dollars, but more realistically 1-2 billion, or more, and take 15 years, or longer in the case of rare disease.

One last note: studies have shown that the success rate for a treatment candidate to make it to market is somewhere between 12-22%, making it that much more critical that early stage research is done right. Given the number of challenges and costs at every stage of development, it’s no wonder the success rate is so low. Every single step along the way matters, and is a building block for the step that follows.

In Part 4, we’ll review a few things not covered in this series, and what you can do to help bring CMD treatments to the development finish line.


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