3 ms·

Is it the median cost for a trial or for all trials that a company does? A company might have many trials going on at once, of greater or lesser costs, but rev

Is it the median cost for a trial or for all trials that a company does? A company might have many trials going on at once, of greater or lesser costs, but revenue is an aggregation of everything over a year. A company with $100 million in revenue and 10 trials ongoing and a company with a $1 billion in revenue and 10 trials ongoing would possibly lead one to specific conclusions, but even when it's broken down that much it doesn't really mean anything for the examples presented, because the mean cost of the trials that the company in question has ongoing could be entirely different. The 10 trials the $100 million revenue company is administering could average $1 million, and the 10 trials the $1 billion company is administering could cost 80 million each, by nature of the types of drugs they and markets they are aiming for. It could also be that there's lots of low cost trials around $20 million, but slightly less than half of the trials that are done are very expensive, and 4-5 times the cost. This would be more obvious if there were values for bot mean and median, instead of just median. The looser the data, the less you can actually infer. Any time someone tells me the median cost for something across an entire industry, my immediate reaction is to wonder what that means, not assume I actually know what it means, because it's far too little data to really know. How many trials are done in a year on average? How many a year do companies average based on revenue? Or simple, what's the actual amount spent on trials compared to revenue, and over how many years are those trials run? Is yearly cost of a trial really a good indicator, if trials take 5-10 years to run, so a failed one results in not just loss of money spent but opportunity cost over many years? Note: If you provided a reference for that median number I would have actually looked it up to see if it made sense to me, or if I had additional questions about how they went about their measurements. Instead, all I have a questions about what the numbers mean because I have no context.

Zigurd 3y ago
Here is a link to the JHU announcement: https://publichealth.jhu.edu/2018/cost-of-clinical-trials-for-new-drug-FDA-approval-are-fraction-of-total-tab https://publichealth.jhu.edu/2018/cost-of-clinical-trials-fo... You will like some of the numbers on that site even less than the $19 million median cost for a trial. The study was published in JAMA, link on the JHU page. I hope this does not sound like an appeal to authority, but good luck discrediting the numbers.
- kbenson 3y ago
  Thanks! > You will like some of the numbers on that site even less than the $19 million median cost for a trial. > good luck discrediting the numbers. I'm not sure why you would think I wouldn't like the numbers. I'm not pro-pharma, I'm just pro-informed reasoning. That said, the article you reference is a bit more nuanced than your take. By the studies they're citing, while the trials for drugs that were approved have a median cost of $19 million, they are clear to outline that it does cost a lot to develop a new drug: The $19 million median figure represents less than one percent of the average total cost of developing a new drug, which in recent years has been estimated at between $2 to $3 billion. “The cost of generating this fundamental scientific information is surprisingly low given the total cost of drug development and the high price tags on many drugs,” says study senior author G. Caleb Alexander, MD, MS, associate professor of epidemiology and medicine at the Bloomberg School. So, while studies may not be a large cost center for new drug development, they state that new drugs are very costly to develop. Or maybe studies are costly, and it's just that it takes very many of them until one shows success. Ten concurrent studies on ten variations of a drug to look for something promising would cost ten times the amount, and there's still no guarantee that any one study will end in a positive outcome. If we're talking about the justification for patents for pharma companies, it seems like we should focus on the "total cost to develop a new drug is estimated at $2 to $3 billion" part and not the "$19 million median cost to run a study" part[1], which as I noted is lacked enough context to know exactly how much it relates to drug development cost. That said, I'm not sure the total cost number referenced above is accurate (to my taste) either. How much of that is advertising? How much of that is kickbacks and trips and drug rep lunches and free samples to doctors? I'm not sure because I don't have access to the full paper, so I'm not sure what their methodology includes. It wouldn't surprise me to learn that a few "blockbuster" drugs had 80% of the cost in massive advertising and good-will pushes to seed the public consciousness about them so they could make more money in the end, so I'm really skeptical that $2 to $3 billion is an accurate indication of drug development cost just as much as I'm skeptical that a $19 million median trial cost equates directly to the drug development cost in a way that's obvious from that number alone. 1: Referenced and linked in JLU article, but here's the link as well: https://www.sciencedirect.com/science/article/abs/pii/S0167629616000291 https://www.sciencedirect.com/science/article/abs/pii/S01676...

Zigurd 3y ago

Here is a link to the JHU announcement: https://publichealth.jhu.edu/2018/cost-of-clinical-trials-for-new-drug-FDA-approval-are-fraction-of-total-tab https://publichealth.jhu.edu/2018/cost-of-clinical-trials-fo... You will like some of the numbers on that site even less than the $19 million median cost for a trial. The study was published in JAMA, link on the JHU page. I hope this does not sound like an appeal to authority, but good luck discrediting the numbers.

kbenson 3y ago
Thanks! > You will like some of the numbers on that site even less than the $19 million median cost for a trial. > good luck discrediting the numbers. I'm not sure why you would think I wouldn't like the numbers. I'm not pro-pharma, I'm just pro-informed reasoning. That said, the article you reference is a bit more nuanced than your take. By the studies they're citing, while the trials for drugs that were approved have a median cost of $19 million, they are clear to outline that it does cost a lot to develop a new drug: The $19 million median figure represents less than one percent of the average total cost of developing a new drug, which in recent years has been estimated at between $2 to $3 billion. “The cost of generating this fundamental scientific information is surprisingly low given the total cost of drug development and the high price tags on many drugs,” says study senior author G. Caleb Alexander, MD, MS, associate professor of epidemiology and medicine at the Bloomberg School. So, while studies may not be a large cost center for new drug development, they state that new drugs are very costly to develop. Or maybe studies are costly, and it's just that it takes very many of them until one shows success. Ten concurrent studies on ten variations of a drug to look for something promising would cost ten times the amount, and there's still no guarantee that any one study will end in a positive outcome. If we're talking about the justification for patents for pharma companies, it seems like we should focus on the "total cost to develop a new drug is estimated at $2 to $3 billion" part and not the "$19 million median cost to run a study" part[1], which as I noted is lacked enough context to know exactly how much it relates to drug development cost. That said, I'm not sure the total cost number referenced above is accurate (to my taste) either. How much of that is advertising? How much of that is kickbacks and trips and drug rep lunches and free samples to doctors? I'm not sure because I don't have access to the full paper, so I'm not sure what their methodology includes. It wouldn't surprise me to learn that a few "blockbuster" drugs had 80% of the cost in massive advertising and good-will pushes to seed the public consciousness about them so they could make more money in the end, so I'm really skeptical that $2 to $3 billion is an accurate indication of drug development cost just as much as I'm skeptical that a $19 million median trial cost equates directly to the drug development cost in a way that's obvious from that number alone. 1: Referenced and linked in JLU article, but here's the link as well: https://www.sciencedirect.com/science/article/abs/pii/S0167629616000291 https://www.sciencedirect.com/science/article/abs/pii/S01676...