Wednesday, December 7, 2016

How Much Do New Drugs Cost To Bring To The Pharmacy Counter?

One of the many issues that need to be addressed by politicians is the rising cost of prescription drugs.  Recent examples include the astronomical increase the drug 'Daraprim' by the crooked ex-CEO Martin Skreli of 5600%.  As If the public did not react appropriately, the next example was of the 'EpiPen' of 400% increase which led to a congressional hearing with the CEO Heather Bresch testifying as to the needed increase.  These two examples are outliers, but which still beg the two questions below:

Why do these drugs cost so much to make?  

How long does the average drug take to get to market?

These two questions will be answered with an example or two below.

Drug Design Length And Cost?

In a post that I wrote a few weeks back, I included a video of the process by which a drug goes through to get funded and produced to arrive at your pharmacy.  The process followed the listed steps below:

1) Basic research is conducted by university research laboratories around the nation and funded by the National Institutes of Health.

2) The results from research (are pre-clinical) submitted to the 'Food and Drug Administration' (FDA) for approval to proceed with a 3 phase clinical trial in humans.

3) Pharmaceutical companies proceed to conduct 3 phase clinical trial.

4) If 3 phase clinical trials are successful, then all data (pre-clinical, 3 phase clinical, etc.) is sent back to the Food and Drug Administration for approval to produce and market.

5) The FDA will continue to monitor the drug's progress throughout the lifetime in the marketplace to ensure safety.

In order to grasp the steps in full, a more detailed explanation of the above steps is in order.  At least a clarification of each step will greatly reduce the confusion.   The steps above are a combination of the pharmaceutical industry, academia (universities), and the government -- working on different parts but combined in the big picture.

Steps 1 & 2:

To start with, research is conducted at universities across the United States that is tax-payer funded through government science funding agencies like the National Institutes of Health (NIH) and the National Science Foundation (NSF).  These are the two largest funding sources through which scientific funding is provided.   Other sources include private funding through foundations like the 'Gates foundation,' along with others.

Research that is conducted with this money is typically aimed at preventing or treating disease -- that is the overarching picture or message.  The process seems simple, yet can take up to 20 years and cost nearly $1 billion dollars.  That is quite an investment.  The process begins with fundamental research about diseases at universities.

This process helps uncover the mechanism by which a disease or treatment works.  Examples might include research looking into the mechanism of the spread of the Zika virus.  Research aims to identify the gene or proteins responsible for the pathway through which the disease proceeds.  These are biological targets which can them be investigated to find out how scientists can produce drugs that bind to the targets.  By binding to the target of interest, the elimination of a disease might occur, or the repair of a mutated gene could occur.

The process of finding drugs (or molecules) that bind or 'hit' the biological target might take years.  Hundreds of tests through 'assays' or binding tests which test hundreds of different drugs that show promise of hitting the target.  Extensive testing is conducted and the outcome is a class of candidate drugs that will hit (or bind) the biological target involved in the disease pathway.

An interesting side note is that if there are drugs that hit multiple targets (not specific) then, that drug might have the potential to possess a large amount of 'side effects' -- which are undesirable.  Therefore, testing to ensure that each candidate only hits the desired target in the disease pathway is critical at this stage.  Especially, before the drug is tested on humans.  This part of the drug development process is referred to as "pre-clinical testing."

With the Pre-clinical data gathered at the university level, the data is submitted to the Food and Drug Administration for review.  If the FDA approves of the data enough to advance the candidates toward a "3 phase clinical trial," then a pharmaceutical company will usually take over the testing process from here.

Steps 3 & 4:

The 3 phase clinical trial testing on humans is very expensive and usually out of the limits of university budgets.  Therefore, at this point, a pharmaceutical company will proceed to test the candidates in human trials.  The process starts with phase 1 trial.

Phase 1:

During the phase 1 clinical testing trials, between 20-80 healthy adults are tested with the drug to evaluate the safety of the drug.  Additionally, the drug is tested for a safe dosage and any side effects during this phase.

Phase 2:

Phase 2 testing involves giving the drug to around 100-300 people to test the drug further.  During this phase, a certain portion of the group being tested will have the disease being sought after to treat.  This is to get a better idea as to the efficacy of the drug and knowledge about how the drug is working in either a healthy patient or a patient with the desired disease to be treated.

Phase 3:

The final phase is phase 3 -- which aims to verify the drugs effectiveness.  Approximately 1000-3000 patients with the disease sought to be treated are tested.  During this trial, the pharmaceutical companies will also compare testing other known treatments (drugs, comparing different brands, etc.) and no drugs (placebo -- sugar pill).  Using a larger sample (patient size) allows the testing to be statistically accurate in the regulatory agencies eyes.

Step 5:

If the drug is successful during all three phase testing trials in humans, the pharmaceutical company will submit the entire data (pre-clinical and clinical testing - phase 3) to the FDA for approval to manufacture and market the drug to treat the desired disease.  The FDA approval indicates that the company can indeed go through and manufacture the drug to treat the disease.  Although, throughout the drug's lifetime, the FDA will be keeping tabs on the drugs efficacy and can ask for paperwork at any time or additional testing.

Obviously, the steps outlined above requires the coordination of a large amount of people and data.  Think about just one perspective -- i.e., the research aspect of the process.  This by itself would be overwhelming.  Then add on another perspective of the process -- i.e., the legal challenges.  Not to mention other aspects like marketing and branding the drug.  All together, there is no wonder why the cost is so high.  But pharmaceutical companies still reap a large profit from a blockbuster drug -- so don't feel too bad for them.

Recently, the rules have changed for the drug manufacturers and additional testing is required.  A perfect example is the testing for 'alcohol dose dumping' - which I recently became aware of.  In the next section, I will introduce you to this phenomenon -- which as you will see will require more testing and money associated with the production of the drug.

More Requirements?

As I just mentioned, recently (as in 2005) the FDA has changed the testing requirements to add more testing.  Testing the drug in its native environment (inside the patient during a 3 phase trial) is not sufficient enough.  Now, the addition of 'dose-dumping' testing is required of companies.  I was unaware of the phenomenon until I stumbled upon a document on the FDA website titled "Mitigating the Risks of Alcohol Induced Dose Dumping from Oral Sustained or Controlled Release Dosage Forms: Proposed Regulatory Procedures."

Here is a brief background on 'dose-dumping' from the FDA report:

Unintended, rapid drug release in a short period of time of the entire amount or a significant fraction of the drug contained in a modified release dosage form is often referred to as “dose dumping”. Depending on the therapeutic indication and the therapeutic index of a drug, dose-dumping can pose a significant risk to patients, either due to safety issues or diminished efficacy or both. Generally dose-dumping is observed due to a compromise of the release-rate-controlling mechanism. The likelihood of dose-dumping for certain modified release products when administered with food has been recognized for about twenty years and a regulatory process established to address it (1-2).
Some modified-release oral dosage forms contain drugs and excipients that exhibit higher solubility in ethanolic solutions compared to water. Such products can be expected to exhibit a more rapid drug dissolution and release rate in the presence of ethanol.  Therefore, in theory, concomitant consumption of alcoholic beverages along with these products might be expected to have the potential to induce dose dumping. This potential mechanism leading to dose-dumping from an oral modified-release dosage form has not previously attracted attention in the pharmaceutical science literature or in regulatory assessment process. There are many reasons this may not have previously been considered, amongst these reasons is that there may have existed a general assumption that a clinically insignificant difference in drug release rate would be expected with concomitant ethanol consumption in vivo. A study conducted over twenty years ago (3) and the absence of a clear post-marketing signal pointing to alcohol inducing dose dumping may have reinforced the latter assumption. 

Drugs are designed by the manufacturer to have certain desirable time release characteristics.  To have a drug release all of the active ingredients at once may be not just undesirable but have extremely adverse reactions to a patient.  Therefore, considering the impact of taking medications on an empty stomach or full stomach are normal.  Additionally, with more precision medicine comes optimization in the form of adding other factors (like alcohol and other medications) which might result in degraded performance of the drug.  Of course, requiring extra considerations requires more testing which in turn requires more cost.  Although, one important factor to keep in mind when considering the cost of a prescription drug along with sympathizing with the manufacture is the stage of the process of change.

Where are the changes going to affect the 'bottom line'?

If the changes by the FDA require methodology change at the stage of 'basic research' then the cost is on the 'tax payer' and not the pharmaceutical industry.  Whereas, in the case above, the drug has already been manufactured and the change (including the solubilization by alcohol) is after the formulation stage and relies on the pharmaceutical company's 'bottom line.'  This cost cuts into the profit of the drug by adding more cost into the design of the drug to avoid 'dose-dumping'.

Based on the example above, the cost can be incurred by pharmaceutical companies or the government (i.e., tax-payer).  Our new President-elect Trump has stated in a recent interview with 'Time magazine' titled "Donald Trump on Russia, Advice from Barack Obama and How He Will Lead" that he is "... going to bring down drug prices. I don’t like what’s happened with drug prices."  That sounds encouraging.

The question is where is the cost going to be cut from -- government side or pharmaceutical side.  Either side will have a respective impact on Research & Design in the future for science and drug development.  Furthermore, as you can see, any change has an effect on cost.  Let's look at a positive change for better drug design below.   The change directly impacts the above problem of 'dose-dumping.'

An article recently on the website 'Research & Development' titled "New Discovery Could Help Oral Medicines Work Better" highlights new developments which are costly to incorporate into new drugs.  Although, in the article, research chemists funded by Dow -- have designed certain molecules (differing chain lengths) that help certain medications (or drugs) dissolve better in the stomach.

Again, the problem is with the dissolution of a medication inside the stomach (precision is desirable) as stated below from the article:

One of the biggest challenges for pharmaceutical companies when developing oral medications is to ensure that the body will fully absorb the drug molecules. Many therapeutic structures do not easily dissolve on the molecular level, which means they are less effective. In that case, the dose must be increased for patients, which may increase side effects.

"A way to explain the differences in solubility of medicines is to think of how sugar easily dissolves in water and is rapidly absorbed by your digestive system, whereas sand doesn't dissolve in water and if swallowed, would pass right through the digestive system," said Theresa Reineke, a chemistry professor in the University of Minnesota's College of Science and Engineering and lead researcher on the study.

Drug companies add substances, called excipients, to help the medicines dissolve in the stomach and intestinal fluid, but there have been few improvements in recent years to this decades-old technology. The process outlined in the study is a major breakthrough that revolutionizes the process of making drug structures more soluble in the body so that they are better absorbed.

Funded by Dow, researchers examined two medications—phenytoin, an anti-seizure drug, and nilutamide, a drug used to treat advanced-stage prostate cancer. The team used automated equipment at Dow to synthesize long-chain molecules. Their efficiency as excipients with these drugs were then tested with facilities at the University of Minnesota, including the Characterization Facility located in the University's College of Science and Engineering. One particular excipient discovered by this research allowed these insoluble drugs to fully dissolve in simulated intestinal fluid in a test tube. When they tested phenytoin with the new excipient in rat models, it promoted drug absorption three times better than the previous formulation.

The overall benefit of the discovery is that the molecules that were made could impact a range of medications, not just a couple.  Meaning, that the development could impact the field of 'oral dosing' -- medications taken by mouth -- which would be huge.  The problems and solutions above illustrate the extent to which the government and academia along with the pharmaceutical industry have to go to get a 'working pill' to your mouth or solution to inject intravenously.  After reading the above processes, you should step back and consider again why a drug costs so much money to develop.


I have outlined above the steps that add up to 20 years and roughly $1 billion worth of research/marketing/legal work that goes into the drug design process.  Too many people have problems with the availability of prescription drugs due to cost.  Drug companies should be able to recoup the cost of research and design behind the drug that is sold at market.  Although, when drugs are given away or sold to foreign countries at a hugely reduced cost, concerned citizens start to speak up here in the U.S. regarding the inherent unfairness behind such disparities.

Furthermore, when a pharmaceutical company increases (by hundred of percent) the price of a drug for an outrageous claim in change of design, citizens should speak up to their elected officials (politicians) who have the ability to conduct a congressional hearing.   There are recent examples that justify this advice.

An example is the pharmaceutical company Mylan and the congressional trial where the CEO Heather Bresch had to testify in order to justify a 400% increase in cost for the EpiPen treatment.  After testifying, representatives thought that they were justified.  Although, in a recent article in 'Drug Development & Discovery' titled "Mylan CEO Discusses EpiPen Price Hikes at Forbes Event" Mylan CEO Heather Bresch tries to explain the increase in her company's product 'EpiPen':

Herper asked what specific value was added to these products after Mylan acquired them in 2007, which prompted Bresch to present two versions of the EpiPen on stage to illustrate how the pen has evolved over time.  She explained the pen in its initial form confused patients making it difficult to operate leading to accidental sticks whereas the latest iteration was safer and more ergonomic.

Plus, the CEO elaborated that Mylan spent over $1 billion implementing lobbying efforts to increase access to EpiPens and awareness regarding severe allergic reactions noting the company has been able to reach 80 percent more patients since acquiring the EpiPen in 2007, according to Business Insider.

The above reason sounds suspicious to say the least.  I don't buy the excuse.  For the reason listed above in the steps of drug discovery process, changing the 'ergonomic features' of a product most likely does not involve a large cost.  Especially from the standpoint of the regulatory process.  The underlying product (active drug and formulation) is not changed.  Therefore, I remain skeptical of Heather Bresch's reason for increasing the cost.

Furthermore, in closing, she stated the most accurate (and honest) aspect of the pharmaceutical industry in the following statement:

There’s a lack of understanding of where that full list… [price]…goes and how it is divided in the system,” Bresch told the audience. “The pharmaceutical system was not built on the idea of consumer engagement.”

True.  I could not agree more -- more transparency is needed regarding the way the pharmaceutical industry operates.  Which is why the public remains skeptical of the practices and pricing of the drugs that hit the market to treat diseases in the United States.  Stay tuned for more on this subject.

Until next time, Have a great day!

1 comment:

  1. Having multiple names for the same drug is part of obfuscation routinely practice by the drug companies!