Earlier this year a study by the Center for the Study of Drug Development at Tufts University placed the cost of developing a new drug at $1.3 billion [1].
Distribution of Development Funding
Though the number is contested by other researchers [2], it is well within the trend of pervious studies and has now been widely accepted as an industry wide average. Exacerbating the issue is the all or nothing nature of drug development, where failure during any phase of clinical trials can cause the termination of a project. It is therefore advantageous to consider technologies that will reduce the risk of this binary success/failure model and transition to a gradient definition of therapeutic efficacy.
Trending Costs of Drug Development
Much of the high costs come in during phase 2 & 3 trials, where patient care, clinical production and regulatory leg-work consumes funds at an alarming rate. With everything riding on the individual trial subjects, their well-being directly linked to success. Undesirable reactions to experimental treatments is unavoidable and the margins for serious adverse events is kept tight by regulatory agencies to protect healthcare consumers. Often however, ground-breaking treatments have to be shelved because they affect 10-15% of trial subjects detrimentally.
RD costs of new chemical entity (NCE)
This makes any ability to view trial subjects with increased resolution and discern subtle correlations with their reactions to consumer demographics key in cutting risks of total-loss. Here I hope a story about my own experience is helpful, as I know it better than what anyone else has had to dealt with. My time at Novartis began when I was brought on-board to help with the development of a drug entering a repeat Phase IIB trial, as the first time around approximately 15% of subjects showed an adverse reaction of note.
Draft FDA Guidance on DNA Sequencing & Clinical Trials
Soon however folks began to get cold-feet, do we dump further resources behind this project or cut our losses and iterate to the next project. A third option now becoming available is that perhaps there was something specific to those 15% of patients that caused the unwanted reaction. Identifying this would allow the drug to move along its pipeline with contraindications that covered the failing demographics. No longer limiting projects to pass/fail while hedging development risks.
Citations:
DiMasi et al,(2003) The price of innovation: new estimates of drug development costs
Ernst & Young Global Pharmaceutical Industry Report (2011) Progressions Building Pharma 3.0
Tufts Center for the Study of Drug Development (2011) Outlook 2011 report
Petri Dish Talk 