This presentation is about the cost development of a new drug.

2. Asim Raza Rph

3.  Introduction
 Overview-drug discovery and development
 The timeline and cost on drug development
 Barriers to drug development
 Barrier mitigation and associated modelling
approaches for analysis
 Conclusion
 References

4.  In the past most drugs have been discovered either by
identifying the active ingredient from traditional
remedies or by serendipitous discovery.
 But now we know diseases are controlled at molecular
and physiological level.
 Also shape of a molecule at atomic level is well
understood.
 Information of Human Genome.

5.  In an analysis of 98 companies over a decade, the average
cost per drug developed and approved by a single-drug
company was $350 million.
 But for companies that approved between 08-13 drugs over
10 years, the cost per drug went as high as $5.5 billion,
 due mainly to geographic expansion for marketing and
ongoing costs for Phase-IV trials and continuous
monitoring for safety.

6. 10,000
COMPOUNDS
250
COMPOUNDS 5 COMPOUNDS
1 FDA
APPROVE
D DRUG
~6.5YEARS ~7YEARS ~1.5YEARS
DRUG
DISCOVERY
PRECLINICAL
CLINICALTRIALS FDA
REVIEW

7.  Drug discovery is the process through which
potential new medicines are identified. It involves a
wide range of scientific disciplines, including
biology, chemistry and pharmacology.

8.  Random Screening
 Molecular Manipulation
 Molecular Designing
 Drug Metabolites
 Serendipity
Drugs Discovery methods:

9.  The process of bringing a new pharmaceutical drug to
the market once a lead compound has been identified
through the process of drug discovery. It includes pre-
clinical research on microorganisms and animals,
filing for regulatory status, such as via the United
States Food and Drug Administration for
an investigational new drug to initiate clinical trials on
humans, and may include the step of
obtaining regulatory approval with a new drug
application to market the drug.

11. Target
Selection
• Cellular and
Genetic
Targets
• Genomics
• Proteomics
• Bioinformatic
s
Lead
Discovery
• Synthesis and
Isolation
• Combinatoria
l Chemistry
• Assay
development
• High-
Throughput
Screening
Medicinal
Chemistry
• Library
Development
• SAR Studies
• In Silico
Screening
• Chemical
Synthesis
InVitro
Studies
• Drug Affinity
and
Selectivity
• Cell Disease
Models
• MOA
• Lead
Candidate
Refinement
InVivo
Studies
• Animal
models of
Disease
States
• Behavioural
Studies
• Functional
Imaging
• Ex-Vivo
Studies
Clinical
Trials and
Therapeutics

12.  New Drug Application (NDA) contains data which
when submitted to FDA's Centre for Drug
Evaluation and Research, Office of Generic Drugs,
provides for the review and ultimate approval of a
generic drug product. Once approved, an applicant
may manufacture and market the generic drug
product to provide a safe, effective, low cost
alternative .

13.  New drug applications (NDAs) require clinical trials
using the candidate chemical compound for safety
and efficacy, usually in centers in multiple states.
 The IND is the process by which an exemption to
the law is obtained.
 Studies in humans can only begin after IND is
reviewed and approved by the FDA and an
institutional review board (IRB).

14.  The FDA reviews and evaluates new drugs based on
evidence presented from the clinical research
studies performed by the drug sponsor-typically a
pharmaceutical company.
 The Center for Drug Evaluation and Research
(CDER) is the largest of the FDA’s five centers and is
responsible for prescription and over-the-counter
(OTC) drug safety and efficacy.

15.  IRBs ensure the rights and welfare of people
participating in clinical trials, both before and during
trial participation.
 IRBs make sure that participants are fully informed
and have given written consent before participating
in studies.

16. 10,000
COMPOUNDS
250
COMPOUNDS 5 COMPOUNDS
1 FDA
APPROVE
D DRUG
~6.5YEARS ~7YEARS ~1.5YEARS
DRUG
DISCOVERY
PRECLINICAL
CLINICALTRIALS FDA
REVIEW

17.  The full cost of bringing a new drug (i.e., new
chemical entity) to market – from discovery through
clinical trials to approval – is complex and
controversial. Typically, companies spend tens to
hundreds of millions of U.S. Dollars.
 One study assessed both capitalized and out-of-
pocket costs as about US$1.8 billion and $870
million, respectively.

18.  ~$870 M spent to bring a new drug to
market.
 $127 Billion spent on Pharma R&D every
year
 Share of CROs(contract research
organizations) in research operations is
27%
Market Scenario
18.8
R&D Share

19. Sr. No. Company R & D spend($billion)
1 Novartis 7.9
2 Merck & Co 8.1
3 Roche 7.8
4 GlaxoSmithKline 5.7
5 Sanofi 5.8
6 Pfizer 9.1
7 Johnson & Johnson 4.5
8 Eli Lilly 4.7
9 AstraZeneca 4.2
10 Takeda 3.4
11 Bayer 2.3
12 Bristol-Myers Squibb 3.3
13 Boehringer Ingelheim 3.1
14 Amgen 2.8
15 Novo Nordisk 1.7

20. R&D Function %
Discovery/Basic Research
Synthesis & Extraction 10.0
Biological Screening & testing 14.2
PreclinicalTesting
Toxicology & Safety testing 4.5
Pharmaceutical Dosage Formulation 7.3
ClinicalTrials
Phase I, II, III 29.1
Phase IV 11.7
Manufacturing & QC 8.3
IND & NDA 4.1
Bioavailability 1.8
Others 9.0
Total 100.0

22.  High financial cost
 Lengthy timelines
 Difficulties in recruiting and retaining participants
 Increasing competition for qualified investigator
and sites
 Regulatory and administrative barriers

23.  Disconnect between clinical research and medical
care
 Barriers at academic institutions
 Barriers related to globalization of clinical research

24. BARRIER MITIGATION MEASURES
 Encourage more
widespread use of
electronic health records
(EHR) for clinical research
purposes
APPROACHESTO MODELING
Patient Recruitment Costs
(per patient): Reduced by
35.9%
Number of Patients (per
site): Reduced by 12.3%

25. BARRIER MITIGATION MEASURES
 Encourage sponsors to carefully
consider their trial enrolment
restrictions
 Encourage sponsors to simplify
clinical trial protocols and plan
carefully to avoid costly
amendments, whenever possible;
ensure that they have a clear
understanding of what is required
by FDA and what is superfluous
APPROACHESTO MODELING
 Patient Recruitment Costs (per
patient): Reduced by 21.3%
 Data Collection, Management
and Analysis Costs (per
study): Reduced by 22.5%
Number of IRB Amendments (per
study): Reduced by 33%
Clinical ProcedureTotal (per
patient): Reduced by 22.3%

26. BARRIER MITIGATION MEASURES
 Engage sponsors in
discussions on the topic of
data and site monitoring to
ensure that they are aware
of the FDA guidance
stating that 100% source
data verification is not
required
APPROACHESTO MODELING
 SDV Cost (per data
field): Reduced by 11.6%
and 14.3% in Phases 2 and
3, respectively, for
cardiology, and 16.7% and
23.5%, respectively, for
oncology.

27. BARRIER MITIGATION MEASURES
 Encourage sponsors to make
wider use of mobile
technologies, centrally
available data to evaluate site
performance, electronic data
capture (EDC), and other
efficiency-improving options
APPROACHESTO MODELING
 PhaseTime (in
years): Reduced by 17.6% in
Phases 1, 2, 3, and 4.
Number of Site Management
Months, Number of Project
Management Months,
Number of Site Monitoring
Days: Reduced by the same
percentage as PhaseTime (in
years)

28. BARRIER MITIGATION MEASURES
 Encourage sponsors to
utilize lower-cost facilities
(such as local clinics and
pharmacies) or at home
testing for data collection
purposes whenever
possible
APPROACHESTO MODELING
 PhaseTime (in years): Portion of
trial time attributed to enrolment
(assumed to be one year each for
Phases 1, 2, and 3) reduced by 67%
 Number of Site Management
Months, Number of Project
Management Months, Number of
Site Monitoring Days: Reduced by
the same percentage as Phase
Time (in years)

29. BARRIER MITIGATION MEASURES
 Grant developers of
treatments for neglected
diseases a “priority review
voucher”
 Conduct internal reviews of
efficiency within the FDA and
make improvements where
possible (also engage in more
frequent and timely
interactions with industry)
APPROACHESTO MODELING
 PhaseTime (in
years): Review phase
reduced to 0.5 years (6
months)
 PhaseTime (in
years): Review phase
reduced to 0.833 years (10
months)

30.  An orphan drug is a pharmaceutical agent that has been
developed specifically to treat a rare medical condition,
the condition itself being referred to as an orphan
disease.
 National Organization for Rare
Disorders
 European Organization for Rare
Diseases

31.  Tax incentives.
 Enhanced patent protection and marketing rights.
 Clinical research financial subsidization.
 Rise in research and development.
 Crown Corporation.

32. 43
19
17
19
2
% Share
Big Pharma
Small Biopharma
Established
Biopharma
Small & Medium
Pharma

33.  There is a financial cost to develop new drugs—and it’s a big one.
There is also a big cost to not developing new drugs, and that cost
can be both financial and human.
 There are ways to make drugs less expensive—i.e., cut down on
some of the bureaucratic oversight or lengthening the patent life,
which means the manufacturers would have more time to recoup
their investment—but both efforts would require a major
legislative push
 If the cost of creating new drugs is high, the cost of not having any
new drugs is immeasurable.

34.  http://www.nature.com/subjects/drug-discovery
 https://en.wikipedia.org/wiki/Drug_development
 Sertkaya, A;Wong, H. H.;Jessup, A; Beleche,T (2016). "Key cost drivers of
pharmaceutical clinical trials in the United States".ClinicalTrials. 13 (2):
117–26
 Paul, Steven M.; Mytelka, Daniel S.; Dunwiddie, ChristopherT.; Persinger,
Charles C.; Munos, Bernard H.; Lindborg, Stacy R.; Schacht,Aaron L.
(2010). "How to improve R&D productivity:The pharmaceutical
industry's grand challenge". Nature Reviews Drug Discovery.
 http://www.fda.gov/Drugs/DevelopmentApprovalProcess
 https://www.quora.com/drug/cost
 https://aspe.hhs.gov/report
 http://www.ipi.org/ipi_issues/detail/the-high-cost-of-inventing-new-
drugs