More compounds failing Phase I

FDA chief warns that high drug attrition rate is pushing up the cost of drug development

Anne Harding(
Aug 5, 2004

Fewer drugs and biologics are making it from Phase 1 trials to the marketplace, which has dramatically pushed up the cost of drug development, Acting Food and Drug Administration (FDA) Commissioner Lester M. Crawford said in a speech to a group of institutional investment analysts last month.

The FDA chief said that while historically 14% of drugs that entered Phase 1 trails eventually won approval, now 8% of these drugs make it to the marketplace, and that half of products fail in the late stage of Phase 3 trials, compared to one in five in the past. The FDA was unable to identify the source of these figures for The Scientist by press time.

In his July 7 speech, Crawford also told the Banc of American Securities Healthcare Institutional Conference that filings of standard new molecular entities had fallen from 34 in 1995 to 12 last year, while original biological license applications dropped from 33 in 1997 to 14 in 2003.

Some estimates suggest this has pushed the cost of developing a single drug from $1.1 billion in 1995 to $1.7 billion in 2002, Crawford said.

A 2001 report by Joseph A. Dimasi, director of economic analysis for the Tufts Center for the Study of Drug Development, found that while failure rates during Phase 1 and Phase 2 trials increased between 1981–1986 and 1987–1992, failure rates during Phase 3 trials declined.

The failure rate of new clinical entities (NCEs) remained relatively steady through the 1980s and early 1990s, DiMasi found. Among NCEs for which an investigational new drug application was filed in 1981–1983, approval success rates were 23.2%; 1984–1986, 20.5%; 1987–1989, 22.2%; and 1990–1992, 17.2%. This includes both self-originated and acquired NCEs.

In its 2001 report to the nation, the FDA's Center for Drug Evaluation and Research stated that approval times for drugs "have begun to increase because more applications require multiple review cycles to reach approval."

The reason for the growing attrition rate Crawford cites isn't clear, Sandra Kweder, deputy director of the FDA's Office of New Drugs, told The Scientist. "We don't really ourselves understand it all that well."

"It might be a business decision," Kweder said. "The drug may work, but the company decides that it might not work well enough or in just the right way to give them the market share that they're interested in."

The FDA launched a program called Critical Paths in March to investigate strategies for improving the drug development process to reduce attrition, and the Pharmaceutical Research and Manufacturers of America has hired Boston Consulting Group to investigate the issue.

Some critics argue that new FDA practices are making drug approval more difficult, noted Peter Tollman, a vice president and director of Boston Consulting Group, who is heading up the effort. "Enough people are asking those questions that it's probably worth trying to understand," he told The Scientist.

"There are a host of theories and the question is what is it," Tollman added, noting that other factors at play could include changes in industry strategy or the fact that drug companies are much larger, more complex, and more cumbersome than they used to be. He said the process of running through and validating or invalidating these hypotheses will take his firm about 4 months. "It's too early now for anything to have emerged," he said.