The higher failure rate...

While the average time it takes to bring a drug through clinical trials has grown shorter in recent years, the rate of success of those drugs has gone down by almost half, to just 12 percent.

 

Almost all the attention from Tuesday's release by the Tufts Center for the Study of Drug Development focused on the eye-popping $2.6 billion cost it cited as needed to develop a new drug.

But just as important as the cost — which has gone up 145 percent since 2003 — is the failure rate of drugs that make it to human trials. According to economist Joseph DiMasi, the principal investigator for the study, that failure rate has increased significantly.

"The higher failure rate had a substantial impact on R&D costs. Higher out-of-pocket costs of conducting R&D, and proportionally more failures in clinical testing, are what really drove the increase in costs per approved drug," DiMasi said during a presentation Tuesday.

Based on an analysis of 1,442 experimental drugs that were in clinical tests in recent years through the end of 2013, DiMasi said the overall chance that a drug entering clinical development will be approved for marketing is just under 12 percent. That's down from 11 years ago, when the study set a success rate for drugs that enter human trials of 21.5 percent.

"Approximately seven out of eight compounds that enter the clinical testing pipeline will fail in development," he said. "Put another way, you need to put an average of 8.5 compounds in clinical development to get one approval."

DiMasi arrived at that figure using a weighted average, since as of the study, just 7 percent of the 1,442 drugs had actually been approved. Fully 80 percent had been abandoned by the companies developing them, and the other 13 percent were still in active development. DiMasi said it's likely that many of the drugs in later development will eventually earn approval, hence the overall 12 percent rate.

The chances of a drug moving from Phase 2 to Phase 3 testing was found to be 36 percent, while the rate at which a drug that finished Phase 3 tests went on to have an application for approval was 62 percent.

Another fact DiMasi said is increasingly relevant to the startup-heavy Massachusetts biotech scene: Small biotechs tend to push drugs from early into late-stage development more frequently than large companies, only to have them fail in later stages.

"There's reason to believe that small biotech firms will tend to keep their drugs in development longer than larger firms might, because, they are single or two-product firms, and if the product fails, the company goes under," he said.
http://www.bizjournals.com/boston/blog/bioflash/2014/11/tufts-study-it-takes-eight-drugs-in-clinical.html?page=all