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Cost of Caution: The Impact on Patients of Delayed Drug Approvals


Cost of Caution: The Impact on Patients of Delayed Drug Approvals

Eric Sun, Tomas J. Philipson June 12, 2010
Health PolicyFDA Reform

The Food and Drug Administration (FDA) has long been judged by how well it balances the goal of safer and more effective prescription drugs with the higher costs that extended reviews impose on products coming to market. Public discussion of regulatory delays has focused mainly on the costs to companies, and the extent to which these costs might reduce the stream of potentially important new drugs.

But what about the cost of protracted regulatory drug review to patients who stand to benefit? This study attempts, for the first time, to assign a price to those unrealized benefits - specifically, the value of longer lives. It argues that the cost to patients is not only considerable, in terms of the monetary value to patients of earlier treatment, but exceeds the costs to prescription-drug developers, which typically spend $1 billion on researching, developing, testing, and marketing every approved drug. In other words, a regulatory review process that was, first of all, efficient and second, as cognizant of benefits denied as it was of risks posed, should not be one that was unreasonably cautious or slow.

This study examines three classes of approved and marketed drugs that have proved to possess significant medical value: highly active antiretroviral treatment (HAART), for the treatment of HIV/AIDS; trastuzumab (Herceptin), for the treatment of breast cancer; and rituximab (Rituxan), for the treatment of non-Hodgkin's lymphoma. It found:

  • To an HIV/AIDS patient being treated with HAART, a year's earlier access would be worth $16,000, and $46,000 for three years' earlier access. To the entire cohort of such patients, the value of one year's earlier access would be $19 billion. The value of three years' earlier access would be $53 billion.
  • To the entire cohort of breast cancer patients being treated with trastuzumab, the value of one year's earlier access would be $8 billion. Three years' earlier access would be worth $22 billion.
  • To the entire cohort of patients being treated with rituximab for non-Hodgkin's lymphoma, a year's earlier access would be worth $310 million. Three years' earlier access would be worth $850 million.

By contrast, shortening Phase III clinical trials by one year would save the typical drug company only about $40 million. The release of HAART one year earlier would have increased the profits of the firm marketing it by $4 billion, or 14 percent, about a fifth of its value to AIDS patients. Had the impact of the three drugs on patients' quality of life been measured, the figures would be even more impressive.

All three of the drug classes studied are particular success stories, and were chosen to demonstrate the cost that delay can exact from patients with life-threatening diseases. The large discrepancy between the value of HAART and that of the other two drugs reflects both the lower incidence of the diseases they treat and their smaller impact on longevity.

In addition to changes in the FDA's own deliberations, certain practical steps can be taken to expedite the regulatory process. As the result of adding reviewers to the staff of the Food and Drug Administration, under authority of the Prescription Drug User Fee Act, for example, the period from synthesis to commercial distribution became shorter. To the extent they can be implemented without unduly sacrificing safety, the authors would like to see these other reforms tried:

  • Allowing the payment of stipends to clinical-trial volunteers. Doing so, after obtaining informed consent, would address the paralyzing shortage of volunteers.
  • Relying on biomarkers. Biomarkers are byproducts of disease processes (such as elevated numbers of CD4 cells in AIDS cases) or indicators of disease risk (such as cholesterol levels). Their use would allow researchers to estimate the likelihood of a treatment's success before completion of full clinical trials.
  • Offering FDA regulators performance incentives. These could expedite the identification of promising new treatments or the evaluation of new guidelines for clinical trials.
  • Establishing an ombudsman. Such an official would review the impact of FDA regulations and practices on drug-development times.

The FDA's pursuit of these and other measures, in addition to its incorporation of this paper's findings into its assessment of candidate drugs' potential benefits and risks, should lead to the earlier availability of effective treatments for life-threatening illnesses.