Research

We apply Bayesian decision analysis (BDA) to incorporate patient preferences in the regulatory approval process for new therapies. By assigning weights to type I and type II errors based on patient preferences, the significance level (a) and power (1 b) of a randomized clinical trial (RCT) for a new therapy can be optimized to maximize the value to current and future patients and, consequently, to public health. We find that for weight-loss devices, potentially effective low-risk treatments have optimal as larger than the traditional one-sided significance level of 5%, whereas potentially less effective and riskier treatments have optimalas below 5%. Moreover,the optimal RCT design, including trial size, varies with the risk aversion and time-to-access preferences and the medical need of the target population.

Recent cases of aggressive pricing behavior in the biopharmaceutical industry have raised serious concerns among payers and policymakers about industry ethics. However, these cases should not be confused with price increases motivated by challenging business conditions that ultimately lead to greater investment in R&D and improved patient access to therapeutics. We study the example of Questcor Pharmaceuticals, which was forced to choose between increasing the price of an effective drug in 2007 and ceasing production and shutting down. We consider Questcor’s journey from inception to its acquisition in 2014, analyze the factors leading up to the price hike of its main revenue generator, Acthar Gel, and discuss its resulting impact on patients after 2007. A counterfactual financial simulation of the company’s prospects in the case where prices were not increased shows that Questcor would have become insolvent between 2008 and 2010.

Uncertainty surrounding the risk and reward of investments in biopharmaceutical companies poses a challenge to those interested in funding such enterprises. Using data on publicly traded stocks, we track the performance of 1,066 biopharmaceutical companies from 1930 to 2015—the most comprehensive financial analysis of this sector to date. Our systematic exploration of methods for distinguishing biotech and pharmaceutical companies yields a dynamic, more accurate classification method. We find that the performance of the biotech sector is highly sensitive to the presence of a few outlier companies, and confirm that nearly all biotech companies are loss-making enterprises, exhibiting high stock volatility. In contrast, since 2000, pharmaceutical companies have become increasingly profitable, with risk-adjusted returns consistently outperforming the market. The performance of all biopharmaceutical companies is subject not only to factors arising from their drug pipelines (idiosyncratic risk), but also from general economic conditions (systematic risk). The risk associated with returns has profound implications both for patterns of investment and for funding innovation in biomedical R&D.

In this case study, we profile the I-SPY 2 TRIAL (Investigation of Serial studies to Predict Your Therapeutic Response with Imaging And molecular anaLysis 2), a unique breast cancer clinical trial led by researchers at 20 leading cancer centers across the US, and examine its potential to serve as a model of drug development for other disease areas. This multicenter collaboration launched in 2010 to reengineer the drug development process to be more efficient and patient-centered. We observe that I-SPY 2 possesses several novel features that could be used as a template for more efficient and cost effective drug development, namely its adaptive trial design; precompetitive network of stakeholders; and flexible infrastructure to accommodate innovation.

Translating academic medical research into new therapies is an important challenge for the biopharmaceutical industry and investment communities, which have historically favored later-stage assets with lower risk and clearer commercial value. The Stanford SPARK program is an innovative model for addressing this challenge. The program was created in 2006 to educate students and faculty about bringing academic research from bench to bedside. Every year, the program provides mentorship and funding for approximately a dozen SPARK ‘scholars,’ with a focus on impacting patient lives, regardless of economic factors. By reviewing the detailed structure, function and operation of SPARK we hope to provide a template for other universities and institutions interested in de-risking and facilitating the translation of biomedical research.

There is general agreement in the biomedical community that the development of therapies for certain diseases should take priority. This ethic has motivated legislative initiatives, such as the Orphan Drug Act of 1983, and underpins several important innovations in regulatory approval processes, such as the US Food and Drug Administration’s (FDA) fast-track, breakthrough-therapy, accelerated-approval, and priority-review designations. However, none of these innovations directly address the critical issue of how to incorporate the patient’s perspective in deciding whether a drug candidate should be approved or not. The current approach in clinical trial design is to minimize the chance of ineffective treatment caused by a type 1 error, that is, a false-positive result. However, the arbitrary nature of the threshold for the probability of type 1 error, alpha, raises an ethical question about its justification. A 2.5% threshold may not be appropriate for terminal illnesses that have no effective therapies; such patients may prefer to take a bigger chance on a false-positive result, even if the likelihood of an effective therapy is small. To quote the noted biostatistician Donald Berry, “We should also focus on patient values, not just P values.”

The Food and Drug Administration (FDA) is a remarkable agency, one of the crown jewels of the US government. Its staff and structure are dedicated to safeguarding American public health, and although we sometimes complain about its role as gatekeeper, we all sleep better knowing that our foods and drugs have passed the FDA’s careful scrutiny. Its regulatory scope and process reflect the technical demands of its responsibilities, and the FDA is one of the very few federal agencies that have taken a lead in defining and developing the new field of regulatory science

In response to the senators January 21, 2016 request for comment on their Sovaldi report, February 27, 2016. On behalf of all patients and their family members and friends, thank you for conducting the study on the pricing strategy of Gilead Sciences and shining a spotlight on the issue of drug pricing. When access to life-saving therapies is limited by affordability, important moral and ethical issues must be considered in addition to economic and political ones. For too long, we in the United States have ignored these issues for fear of “death panels” and difficult end-of-life decisions. But the growing number of breakthrough therapies and the rising cost of healthcare will soon force us to confront these issues directly. Your report and is an important step in helping us to develop a rational, ethical approach to dealing with this looming challenge.

Americans are increasingly apprehensive about our future, so it is inspiring when Congress produces legislation intended to both enhance our health and expand our economy. The 21st Century Cures Act, recently passed by the House with an impressive bipartisan majority vote of 344 to 77, intends to accelerate the many-step process of drug discovery and development, from basic scientific research to clinical development to delivery, distribution, and ongoing monitoring. Among other things, the legislation boosts National Institute of Health funding, dramatically speeds up the US Food and Drug Administration (FDA) approval process, and aims to make use of new information technology to better monitor the performance of medical products after they reach the market. This landmark bill now awaits a comparable piece of legislation being developed by the Senate Health Education, Labor, and Pensions Committee. Together, they will transform the biomedical ecosystem and provide the foundation for the next several decades of innovative life-saving and health-enhancing solutions for our nation and the world.

The reports by Wim van Harten and colleagues and Sabine Vogler and colleagues in The Lancet Oncology on the costs of cancer drugs in European countries deserve special attention from all oncology and biopharmaceutical stakeholders. van Harten identified that, in 15 European countries, list prices can be up to 92% lower than the highest reported, with actual prices paid up to 58% lower. These findings are backed up by Vogler and colleagues' study ² in 16 European countries, Australia, and New Zealand, which documented that highest-minus-lowest list price differences ranged from 28% to 388% for cancer drugs. Such variability argues strongly for greater transparency in drug pricing and the circumstances leading to such differences. But most importantly, it underscores the need to establish the true value of cancer therapies, and those who have championed this cause have been handed unequivocal evidence confirming what they have long suspected: drug prices are typically driven by what the market will bear.