Methodology for Measuring the Effects of Regulation on

9 Methodology for Measuring the Effects of Regulation on Pharmaceutical Innovation

Downloaded via TUFTS UNIV on July 7, 2018 at 07:17:27 (UTC). See https://pubs.acs.org/sharingguidelines for options on how to legitimately share published articles.

Regulatory Disposition and National Origin of New Chemical Entities in the United States JEAN DIRADDO and WILLIAM M. WARDELL Center for the Study of Drug Development, Department of Pharmacology and Toxicology, University of Rochester Medical Center, Rochester, NY 14642 As long as any disease that is potentially treatable by drugs remains unconquered, there will be a need for pharmaceutical innovation. Among those disease areas that could benefit from pharmaceutical innovation are a r t h r i t i s , cancer, the muscular dystrophies, and schizophrenia. Despite the advances in drug therapy that have occurred, there is still a pressing need for new and better medicines within many therapeutic areas. Valuable innovations in such areas would offer drugs that are more effective, have fewer or significantly different side effects, and/or are more convenient than existing therapies. Although the aim of pharmaceutical regulation is to ensure the safety and efficacy of new drugs, regulatory c r i t e r i a should not be so stringent that they inhibit innovation. In A p r i l 1976, the President's Biomedical Research Panel gave the following description of how the regulatory process may act as a roadblock to the development of new drugs. "There is a clear impasse arising between society's desire for new and better drugs and the barriers society is erecting to their development and introduction. These barriers, based on a valid desire to improve the standards of safety and efficacy and to insure ethical control in c l i n i c a l evaluation, increase developmental costs. There is a real danger of bringing the development process and access to c l i n i c a l resources to a halt."(1) It is important to balance the effects of drug regulation with the need for innovation. As the c l i n i c a l pharmacologist Walter Modell has said, "Only progress is protection. Without progress we have no protection."(2) This paper examines the impact of regulation on pharmaceutical innovation in the United States and the methodological problems involved when one attempts to measure pharmaceutical innovation. Data describing the rate and manner of passage of new chemical entities (NCEs) through the U.S. regulatory system and the national origin of NCEs marketed in the U.S. are presented. 0-8412-0511-6/79/47-109-127$06.00/0 © 1979 American Chemical Society

Hill; Federal Regulation and Chemical Innovation ACS Symposium Series; American Chemical Society: Washington, DC, 1979.

128

FEDERAL REGULATION AND CHEMICAL INNOVATION

Pharmaceutical Regulation in the United

States

Legislation. The first major l e g i s l a t i o n concerning drugs was the Pure Food and Drugs Act of 1906. This Act banned a d u l t e r a t e d or misbranded foods and drugs from i n t e r s t a t e commerce. Although d i r e c t e d against both impure foods and drugs, i t s main impact was on foods. The Food, Drug and Cosmetic Act of 1938 was enacted f o l l o w ing the E l i x i r S u l f a n i l a m i d e tragedy ( i n which the untested use of d i e t h y l e n e g l y c o l as a solvent caused the deaths of about 100 people). The aim of t h i s Act was to prevent the marketing of untested, p o t e n t i a l l y harmful drugs. I t s major p r o v i s i o n was that the manufacturer was r e q u i r e d to demonstrate the s a f e t y of a drug to the FDA ( i n a new drug a p p l i c a t i o n or NDA). Unless the FDA determined w i t h i n 60 days that s a f e t y was not e s t a b l i s h e d , a drug could then be marketed. Exemptions to the p r o h i b i t i o n against i n t e r s t a t e t r a n s f e r were allowed f o r drugs intended s o l e l y f o r i n v e s t i g a t i o n a l use by q u a l i f i e d s c i e n t i f i c experts. The next major l e g i s l a t i o n was a l s o enacted a f t e r a t r a g e d y — t h a t of thalidomide. The major p r o v i s i o n of the Drug Amendments of 1962 (the Kefauver-Harris Amendments) was that the manufacturer must show s u b s t a n t i a l evidence of a drug's e f f e c tiveness ( i n a d d i t i o n to i t s safety) to obtain approval f o r mark e t i n g . Other changes were that p o s i t i v e FDA approval of a drug was r e q u i r e d i n s t e a d of automatic clearance; FDA c o n t r o l over the c l i n i c a l t e s t i n g stage was expanded; and the Secretary of HEW could immediately suspend a drug's NDA approval if the drug was found to represent an "imminent hazard" to the p u b l i c health.(3) Regulation. The r e g u l a t i o n s promulgated by the FDA to implement i t s r e s p o n s i b i l i t i e s as defined by the l e g i s l a t i o n have had, and continue to have, a s i g n i f i c a n t impact on pharmaceutical R&D. Examples of p a r t i c u l a r l y important r e g u l a t i o n s i n c l u d e the 1970 r e g u l a t i o n s that defined what c o n s t i t u t e s the " w e l l c o n t r o l l e d i n v e s t i g a t i o n s " needed to provide s u b s t a n t i a l evidence of e f f e c t i v e n e s s as r e q u i r e d by the 1962 Amendments. In 1975 r e g u l a t i o n s came i n t o e f f e c t to enhance the acceptance by the FDA of f o r e i g n data meeting c e r t a i n r e q u i r e ments. The aims of these r e g u l a t i o n s were to e l i m i n a t e d u p l i c a t i v e c l i n i c a l research and to expedite the a v a i l a b i l i t y of important new drugs in the United States. In J u l y 1976, due to concerns over the f i n d i n g s of FDA inspections of c e r t a i n research l a b o r a t o r i e s , the Bioresearch Monitoring Program was i n i t i a t e d . Four components of t h i s program r e l a t e to drugs: r e g u l a t i o n s regarding p r e c l i n i c a l t e s t i n g (Good Laboratory P r a c t i c e s ) ( 4 ) , those proposed f o r sponsors and monitors of c l i n i c a l s t u d i e s ( 5 ) , those proposed f o r c l i n i c a l i n v e s t i g a t o r s ( 6 ) , and the proposed r e g u l a t i o n s p e r t a i n i n g to in-


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

129

s t i t u t i o n a l review boards or IRBs.(7) Proposed r e g u l a t i o n s may be m o d i f i e d on the b a s i s o f comments submitted to FDA b e f o r e they appear in f i n a l form. Implementation of any o f the proposed r e g u l a t i o n s i n c l u d e d w i t h i n t h i s program will r a i s e the cost o f developing new drugs and may i n f l u e n c e the process o f drug development in other ways as w e l l . For example, B r i t i s h pharmac e u t i c a l firms have s t a t e d that they cannot meet the r e q u i r e ments of the proposed sponsor/monitor r e g u l a t i o n s in B r i t a i n ( 8 ) , so presumably c l i n i c a l data from B r i t a i n (and probably from other c o u n t r i e s as w e l l ) will become unacceptable in support o f an NDA if these r e g u l a t i o n s are implemented as c u r r e n t l y proposed. Univ e r s i t i e s will have severe d i f f i c u l t i e s in meeting the r e q u i r e ments o f , f o r example, the proposed r e g u l a t i o n s on Good Laboratory P r a c t i c e s . ( 9 ) F o l l o w i n g the appearance o f the F i n a l Report o f the HEW Review Panel on New Drug R e g u l a t i o n in May 1977, c o n s i d e r a b l e a t t e n t i o n was devoted by the FDA and by some members o f Congress to formulating l e g i s l a t i o n that would s i g n i f i c a n t l y r e v i s e pharm a c e u t i c a l r e g u l a t i o n in t h i s country. The outcome was The Drug Regulation Reform A c t o f 1978 (S.2755, H.R. 11611, H.R. 12980), which was introduced in both houses in March 1978. The Drug R e g u l a t i o n Reform Act (DRRA) r e p r e s e n t s a complete r e v i s i o n of the Food, Drug and Cosmetic A c t o f 1938. Although the FDA is c u r r e n t l y p r a c t i c i n g some o f the procedures d e s c r i b e d in the b i l l , and would be a b l e to f o l l o w others by i n i t i a t i n g a p p r o p r i a t e r e g u l a t i o n s , passage o f t h i s l e g i s l a t i o n would c l a r i fy and f o r m a l i z e the nature and extent o f the a u t h o r i t y that Congress intends the FDA to have. The b i l l is lengthy and complex. Even among l e g a l and s c i e n t i f i c experts there is disagreement as to which aspects o f the drug development and approval processes should most approp r i a t e l y be covered by l e g i s l a t i o n and which should best be d e a l t with by r e g u l a t i o n s . Although t h i s p a r t i c u l a r b i l l was not enacted in 1978, the i s s u e s r a i s e d during the hearings and debates on it are extremely important and will undoubtedly reappear in future b i l l s . Since both the 1938 Act and the 1962 Amendments were passed in the wake of t r a g e d i e s , they were o r i e n t e d towards r i s k avoidance; the FDA is p r i m a r i l y r e q u i r e d to prevent harm from drugs and at present has no c o n g r e s s i o n a l mandate to promote the improvement of h e a l t h o r to maximize the b e n e f i t o b t a i n a b l e from drugs. The DRRA recognizes the need to encourage i n n o v a t i o n and research and to get new drugs on the market f a s t e r . In p r a c t i c e , however, many of i t s p r o v i s i o n s would probably i n h i b i t r e s e a r c h and innovation.(10) S i g n i f i c a n t aspects o f the b i l l i n c l u d e the following: 1. p r o v i s i o n s f o r l i m i t e d d i s t r i b u t i o n o f a drug; 2. r e q u i r e d postmarketing s u r v e i l l a n c e o f a new drug f o r f i v e years (unless waived by the S e c r e t a r y o f HEW);



130 3.

postmarketing s t u d i e s of a drug's e f f e c t i v e n e s s f o r i n d i c a t i o n s other than those f o r which approval is sought could be r e q u i r e d f o r uses that are known or could reasonably be expected to occur; 4. c o n t i n u a t i o n of the current requirement f o r "adequate and w e l l - c o n t r o l l e d i n v e s t i g a t i o n s " as evidence of e f f e c t i v e n e s s ( i n c o n t r a s t to the p r o v i s i o n in the Medical Device Amendments of 1976 by which the Secret a r y may determine whether other v a l i d s c i e n t i f i c e v i dence is adequate to e s t a b l i s h the e f f e c t i v e n e s s of a device); 5. a new d e f i n i t i o n of s a f e t y to mean that the h e a l t h benef i t s of a drug must c l e a r l y outweigh i t s r i s k s with regard to s o c i e t y and the p u b l i c h e a l t h ; 6. p r o v i s i o n f o r removal of a drug from the market if it represents a s u b s t a n t i a l r i s k of i l l n e s s or i n j u r y ( t h i s would r e p l a c e the current p r o v i s i o n which r e q u i r e s that a drug be shown to represent an "imminent hazard"); 7. p r o v i s i o n f o r the a c c e l e r a t e d approval of "breakthrough" drugs if c e r t a i n requirements are met; 8. the d i s c l o s u r e of all s a f e t y and e f f e c t i v e n e s s data submitted to the FDA (some of which is c u r r e n t l y considered as trade s e c r e t i n f o r m a t i o n ) ; 9. p r o v i s i o n f o r the export of drugs not approved f o r mark e t i n g in t h i s country under c e r t a i n c o n d i t i o n s ; 10. expansion of the FDA's j u r i s d i c t i o n to i n c l u d e all drugs (not only those i n v o l v e d in i n t e r s t a t e commerce); and 11. p r o v i s i o n f o r drug i n n o v a t i o n i n v e s t i g a t i o n s f o r the purpose of examining c l i n i c a l pharmacology, making prel i m i n a r y assessments of the r i s k s or e f f e c t i v e n e s s of a drug, or studying the b i o l o g i c a l mechanisms in humans. The FDA review of such i n v e s t i g a t i o n s would focus only on the p r o t e c t i o n of s u b j e c t s , not on the adequacy of the s c i e n t i f i c design. (The aim of t h i s p r o v i s i o n is to avoid i n t e r f e r i n g with the discovery and development of new drugs but the extent to which the p r o v i s i o n would achieve t h i s aim has been questioned.) For estimating the impact and e f f e c t s of proposed changes in the r e g u l a t o r y system, it would be e s s e n t i a l to have a thorough e v a l u a t i o n of the present system. I d e a l l y one would l i k e to see a c o s t / b e n e f i t assessment of the current r e g u l a t i o n s — cost r e p r e s e n t i n g not only economic cost but a l s o the cost of missed innovation, and b e n e f i t r e p r e s e n t i n g the improved h e a l t h and s a f e t y of the p u b l i c . One part of t h i s task that our group has approached is a study of the e f f e c t s of r e g u l a t i o n on pharmaceutical innovation. The first problem that must be d e a l t with in such a study is how to measure innovation.


9.

DiRADDO AND WARDELL

Nature of

Pharmaceutical

Innovation

131

Innovation

The present p r e d i c t i v e s t a t e of pharmacological science is such that the t h e r a p e u t i c or even pharmacologic value of an i n n o v a t i o n u s u a l l y cannot be f o r e t o l d at the time of i t s d i s covery. Thus, a c e r t a i n amount of i n n o v a t i v e a c t i v i t y may never y i e l d r e a l breakthroughs, w h i l e c e r t a i n innovations that may appear s c i e n t i f i c a l l y t r i v i a l can t u r n out to be u s e f u l c o n t r i butions to medical progress. Pharmaceutical innovations that l e a d to advances in medical therapy occur in a v a r i e t y of ways. There are dramatic "breakthrough" innovations that depend on a s i n g l e major concept or d i s c o v e r y , examples being p e n i c i l l i n , levodopa, the beta-blockers and the ^ - a n t a g o n i s t s . In c o n t r a s t to these, the cumulative r e s u l t s of s e v e r a l minor or incremental innovations may, when taken together over a p e r i o d of years, c o n s t i t u t e a major advance. The areas of a n t i h y p e r t e n s i v e therapy and combination chemotherapy f o r cancer i l l u s t r a t e t h i s type of i n n o v a t i o n . Important t h e r a p e u t i c advances may a l s o come about through chance observations of the e f f e c t s of drugs in man in those s i t u a t i o n s in which s c i e n c e and animal models are not yet capable of making r e l i a b l e p r e d i c t i o n s , such as the use of c h l o r promazine as a t r a n q u i l i z e r and of i p r o n i a z i d and imipramine as antidepressants. Mechanisms of

Innovation

We s h a l l assume, r a t h e r a r b i t r a r i l y f o r the purpose of t h i s d i s c u s s i o n , that the s t a r t i n g p o i n t o f pharmaceutical i n n o v a t i o n is the development of a new b i o l o g i c concept (or a new approach to an e x i s t i n g concept) that is p o t e n t i a l l y t h e r a p e u t i c a l l y exploitable. Moving from the e a r l i e s t and most a p r i o r i to the l a t e r and more e m p i r i c a l methods of drug d i s c o v e r y , the f o l l o w i n g types of i n n o v a t i o n can be d i s t i n g u i s h e d . 1. Synthesis of a new molecular s t r u c t u r e (new chemical e n t i t y or NCE) w i t h p o s s i b l e b i o l o g i c a l s i g n i f i c a n c e . 2. Discovery of a new pharmacologic a c t i o n (e.g., the beta-blockers and the l ^ - a n t a g o n i s t s ) . 3. S t r u c t u r a l m o d i f i c a t i o n of an e x i s t i n g molecule to improve i t s t h e r a p e u t i c v a l u e , e.g., by making it more e f f e c t i v e , l e s s t o x i c , b e t t e r absorbed, or longer a c t ing (such m o d i f i c a t i o n can a l s o l e a d to the d i s c o v e r y of a new pharmacologic a c t i o n , as in p o i n t 2 above, or of new t h e r a p e u t i c e f f e c t s in man, as in p o i n t 5 below). An i n s t r u c t i v e example of the major t h e r a p e u t i c advances that have been obtained by molecular m o d i f i c a t i o n is seen in the f a m i l y of p e n i c i l l i n s that followed b e n z y l p e n i c i l l i n , the o r i g i n a l member of the s e r i e s . In little more than a decade from i t s first c h a r a c t e r i z a t i o n , the o r i g i n a l b e n z y l p e n i c i l l i n molecule was


FEDERAL REGULATION

132

AND CHEMICAL INNOVATION

4.

s t r u c t u r a l l y modified to y i e l d phenoxymethyl p e n i c i l l i n ( o r a l l y a c t i v e ) , a m p i c i l l i n ( o r a l l y a c t i v e against gram negative organisms), the p e n i c i l l i n a s e - r e s i s t a n t p e n i c i l l i n s ( a c t i v e against c e r t a i n r e s i s t a n t organisms, p a r t i c u l a r l y s t a p h y l o c o c c i ) , and c a r b e n i c i l l i n ( a c t i v e against Pseudomonas organisms). These are all r e l a t i v e l y t r i v i a l m o d i f i c a t i o n s of the o r i g i n a l benzyl p e n i c i l l i n molecule, the few successes out of competit i v e programs that synthesized l i t e r a l l y thousands of such modified molecules, but they are some of the major t h e r a p e u t i c advances of the a n t i b i o t i c e r a . S i m i l a r examples abound in most f i e l d s of t h e r a peutics. For example, the major t r a n q u i l i z e r c h l o r p r o m a z i n e — t h e first drug found to have true a n t i p s y c h o t i c p r o p e r t i e s — i s a t r i v i a l m o d i f i c a t i o n of phenothiazine, which was known f o r decades and used as a de-wormer f o r l i v e s t o c k . The parent phenothiazine, and many of i t s s t r u c t u r a l m o d i f i c a t i o n s , have no a n t i p s y c h o t i c a c t i v i t y at all; it is only c e r t a i n minor s t r u c t u r a l m o d i f i c a t i o n s that have the e s s e n t i a l pharmac o l o g i c and t h e r a p e u t i c p r o p e r t i e s . (Chlorpromazine a l s o happens to be a c l a s s i c example of the s e r e n d i p i tous e m p i r i c a l - c l i n i c a l method of d i s c o v e r y of a drug's unique t h e r a p e u t i c v a l u e , a method d e s c r i b e d below.) "Pharmaceutical" m o d i f i c a t i o n s of drugs to improve performance, e.g., the production of d i f f e r e n t formulations or d e l i v e r y forms. On the o v e r a l l s c a l e of i n n o v a t i o n s , these pharmaceutical m o d i f i c a t i o n s are g e n e r a l l y r e garded as being of r e l a t i v e l y minor i n n o v a t i v e s i g n i f i cance; however, some can be of d i s p r o p o r t i o n a t e l y l a r g e medical value. For example, the simple concept of the depot ( l o n g - a c t i n g i n j e c t a b l e forms of) phenothiazines has improved the long-term treatment of p s y c h o t i c p a t i e n t s whose disease predisposes to noncompliance with the t h e r a p e u t i c regimen and r e s u l t a n t treatment f a i l u r e ; in some cases the depot form can avert the need f o r i n s t i t u t i o n a l i z a t i o n . Depot p r e p a r a t i o n s of i n j e c t a b l e c o n t r a c e p t i v e s s i m i l a r l y overcome the obvious problem that can r e s u l t from noncompliance. The Ocusert and P r o g e s t a s e r t systems, which d e l i v e r drugs l o c a l l y i n t o p a r t i c u l a r body compartments (the eye and uterus, r e s p e c t i v e l y ) reduce the t o t a l systemic burden of a drug, reduce s i d e e f f e c t s , and provide more uniform and r e l i a b l e r e l e a s e ; the i n h a l e d form of s t e r o i d s f o r asthma serves a s i m i l a r purpose. These are a few of the many examples where pharmaceutical innovations of a r e l a t i v e l y modest conceptual or t e c h n i c a l nature have n e v e r t h e l e s s l e d to s u b s t a n t i a l improvements in the q u a l i t y of medical treatment.

5.

Discovery

of t h e r a p e u t i c e f f e c t s in man

that may


not

be

9.

DIRADDO AND WARDELL

Pharmaceutical

Innovation

133

p r e d i c t a b l e from animal models, a l s o known as s e r e n d i pitous discovery o r the "Oates Type I I method o f d i s covery. Examples o f major t h e r a p e u t i c advances that have been made in t h i s way i n c l u d e some o f the most important therapies o f the past three decades: all the major psychotherapeutic drugs (the major t r a n q u i l i z e r s and both c l a s s e s o f a n t i d e p r e s s a n t s ) ; the t h i a z i d e d i u r e t i c s ; the a n t i p a r k i n s o n i a n a c t i o n s o f levodopa and amantadine; the anti-inflammatory a c t i o n s o f s t e r o i d s and of phenylbutazone; the a n t i h y p e r t e n s i v e a c t i o n s of beta-blockers and methyldopa; the antigout a c t i o n o f a l l o p u r i n o l ; and the p r o t e c t i v e e f f e c t s o f beta-blockers and p l a t e l e t modulators against coronary death and myoc a r d i a l i n f a r c t i o n , and against s t r o k e . 6. Discovery o f new uses f o r e x i s t i n g drugs, i n c l u d i n g those uses discovered as in p o i n t 5 above. When one examines the nature, sources, and funding o f pharmaceutical innovation, c e r t a i n p r i n c i p l e s become apparent. The areas where f e d e r a l support has been most prominent are in b a s i c research and in l a r g e - s c a l e c l i n i c a l t r i a l s . These happen to be areas where the b e n e f i t s — w h i l e very r e a l — a r e long-term, not immediately apparent ones. Conversely, the development of s p e c i f i c t h e r a p e u t i c drugs has to a l a r g e extent (with the exception o f some important areas such as cancer chemotherapy) been achieved by the pharmaceutical i n d u s t r y , without f e d e r a l funding. For example, the o r i g i n a l b a s i c work on beta-blockers, new beta-agonists, t ^ - a n t a g o n i s t s , and cromolyn sodium was all done in l a b o r a t o r i e s o f pharmaceut i c a l firms ( f o r e i g n l a b o r a t o r i e s , as it happens), and the most important c l i n i c a l development was a l s o performed by firms abroad. I f one traces the research back still f u r t h e r , one can u s u a l l y f i n d connections with research supported by p u b l i c funding, but the connection is not an immediate one. An important trend appears to be developing. B a s i c research knowledge, once produced, is an i n t e r n a t i o n a l commodity because of the well-developed systems that e x i s t f o r s c i e n t i f i c p u b l i c a t i o n and communication. I t is i r o n i c that while most p u b l i c l y financed b a s i c knowledge is probably generated by U.S. funding, the U.S. pharmaceutical i n d u s t r y may not be p r o p o r t i o n a t e l y as prominent in making a p p l i e d use o f t h i s knowledge. I t is as if f o r e i g n companies are g e t t i n g " f i r s t crack" a t these U.S.o r i g i n a t e d basic-knowledge o p p o r t u n i t i e s . I t is p o s s i b l e that the f a c i l i t y to e x p l o i t b a s i c knowledge f o r t h e r a p e u t i c purposes is dependent on the r e g u l a t o r y environments in p a r t i c u l a r countries. ff

Measures of Innovation There are s e v e r a l p o s s i b l e ways o f measuring pharmaceutical innovation, but all present t e c h n i c a l problems. Two general


134


approaches are the use of absolute measures, using some absolute c r i t e r i o n to measure i n n o v a t i v e output, and comparative measures, such as comparing the nature and extent of the output of two d i f f e r e n t c o u n t r i e s . Among the p o s s i b l e absolute measures are the number of new molecular s t r u c t u r e s (NCEs) synthesized, the n o v e l t y of t h e i r molecular s t r u c t u r e , the novelty of t h e i r pharmacologic a c t i o n , the number of patents i s s u e d , the number of NCEs t e s t e d in man, the number of NCEs submitted f o r marketing, the number of NCEs marketed, and q u a l i t a t i v e measures of the value of marketed NCEs. Measures such as the number of compounds synthesized and the number of patents issued have been c r i t i c i z e d on the grounds that they are more measures of R & D a c t i v i t y (input) r a t h e r than of output.(11) Novelty of molecular s t r u c t u r e represents a t e c h n i c a l l y d i f f i c u l t assessment which, if performed at the time of s y n t h e s i s , i n v o l v e s molecules with unknown pharmacologic and t h e r a p e u t i c p r o p e r t i e s . Novelty of pharmacologic a c t i o n represents a fundamental measure of at l e a s t the p o t e n t i a l f o r therap e u t i c innovation. In p r a c t i c e , however, t h i s represents a judgmental i s s u e and the necessary data on untested or unmarketed drugs would be d i f f i c u l t to o b t a i n . The problem with using the numbers of NCEs, whether t e s t e d in man, submitted f o r marketing, or marketed, is that these measures c o n s i s t of numbers alone without i n t e r p r e t a t i o n or assessment of therapeutic v a l u e . Furthermore, as measures of innovation, they are confounded by r e g u l a t o r y i n f l u e n c e during the IND and NDA stages. The t h e r a p e u t i c value of marketed NCEs can be evaluated but the r e a l assessment can only be made some years a f t e r a drug has been marketed and i t s p r o p e r t i e s f u l l y a s c e r t a i n e d (e.g., a s p i r i n ' s p r o p h y l a c t i c e f f e c t s against myocardial infarction). Therapeutic assessments have been made by the FDA f o r example(12), but the methodology f o r such assessments has not been well-developed. The measure we have r e c e n t l y developed in some d e t a i l is the number of NCEs taken i n t o human t e s t i n g . This is a v a l i d and u s e f u l measure s i n c e it represents a firm's d e c i s i o n that a compound is worthy of f u r t h e r t e s t i n g and investment. I t a l s o represents the first appearance of i n n o v a t i v e output outside a f i r m , and in the U.S. it marks the entry of a compound i n t o the r e g u l a t o r y pathway. Although, as described above, t h i s measure of innovation is made before a compound's therapeutic p r o p e r t i e s are known, it is made at a p o i n t when the compound's pharmacol o g i c and t o x i c o l o g i c p r o p e r t i e s are already d e f i n e d . A f u r t h e r reason f o r the importance of t h i s measure is the seemingly p a r a d o x i c a l one that some of the most important t h e r a p e u t i c p r o p e r t i e s of a drug cannot be p r e d i c t e d at the time a drug is first taken i n t o man. In the present r a t h e r p r i m i t i v e s t a t e of knowledge about s t r u c t u r e - a c t i v i t y r e l a t i o n s h i p s , our a b i l i t y to make a p r i o r i p r e d i c t i o n s using such r e l a t i o n s h i p s is poor. We t h e r e f o r e depend more than is g e n e r a l l y r e a l i z e d on the


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

135

"Oates Type I I " or s e r e n d i p i t o u s method of d i s c o v e r y , in which major new p r o p e r t i e s of drugs are discovered only a f t e r t h e i r i n t r o d u c t i o n i n t o human t h e r a p e u t i c s . The more compounds that are s t u d i e d in man, the more p o t e n t i a l there is f o r t h i s serend i p i t o u s method of d i s c o v e r y . Thus, the number of NCEs taken i n t o man f o r study is one of the more important of the f e a s i b l e i n d i c e s of innovation. The New

Drug Approval Process in the United

States

The upper p o r t i o n of Figure 1 d e p i c t s the v a r i o u s stages through which a new drug must pass before it can be marketed in the United States. A f t e r the p r e c l i n i c a l t e s t i n g phase and i n i t i a l t o x i c o l o g i c a l s t u d i e s , a manufacturer may f i l e with the FDA f o r an i n v e s t i g a t i o n a l new drug exemption (IND) p r i o r to i n i t i a t i n g human t e s t i n g . The c l i n i c a l i n v e s t i g a t i o n s are d i vided i n t o three phases. During Phase I a drug is given to a small number of healthy human volunteers with the p r i n c i p a l obj e c t i v e s of l o o k i n g f o r evidence of t o x i c i t y and determining the b a s i c p r o p e r t i e s of the drug in man. In Phase II the drug's e f f e c t s on a small p o p u l a t i o n of p a t i e n t s with the appropriate disease are examined to determine i t s t h e r a p e u t i c value and to detect any adverse e f f e c t s or p o s s i b l e t o x i c i t y . Phase I I I cons i s t s of l a r g e - s c a l e t e s t i n g to uncover l e s s common s i d e e f f e c t s and to approximate more c l o s e l y the type of drug u t i l i z a t i o n (e.g., in p a t i e n t s of v a r y i n g disease s e v e r i t y ) that would occur in medical p r a c t i c e if the drug were marketed. When a manufacturer b e l i e v e s he has adequate evidence to demonstrate the s a f e t y and e f f e c t i v e n e s s of a compound, an NDA is submitted to the FDA. A f t e r the NDA has been approved, the drug can be marketed in t h i s country. The term Phase IV is used to denote postmarketing s t u d i e s that are done to examine the p r o p e r t i e s of the drug in more widespread or long-term u t i l i z a tion. Regulatory

D i s p o s i t i o n of NCEs in the United

States

To measure i n n o v a t i o n we examined the r a t e of flow of NCEs i n t o human t e s t i n g , the e a r l i e s t p o i n t at which r e l i a b l e i n f o r mation appears outside the pharmaceutical i n d u s t r y and the p o i n t at which NCEs enter the r e g u l a t o r y pathway. The r a t e s at which these compounds pass the milestones of the U.S. r e g u l a t o r y pathway (the p o i n t s of IND f i l i n g , NDA submission, and NDA approval) were d e f i n e d . In a d d i t i o n to the o v e r a l l a n a l y s i s , the data were analyzed by i n d i v i d u a l t h e r a p e u t i c areas. The observed d i f ferences between c a t e g o r i e s of NCEs imply the e x i s t e n c e of s c i e n t i f i c , i n d u s t r i a l , and/or a d m i n i s t r a t i v e d i f f e r e n c e s between these c a t e g o r i e s . Data were obtained by an exhaustive survey of all pharmac e u t i c a l companies o p e r a t i n g in the U.S. An NCE was defined as



DRUG DEVELOPMENT (U.S.A.) NDA: 1938

IND0962) I PRECLINICAL! -

-CLINICAL

—

NDA SUBMISSION

IND FILING

'

IND PHASE

NDA APPROVAL NDA PHASE

I—*> MARKETING

1—

CHEMICAL LAB.

PHASES:

PRECLINICAL (ANIMAL! phose 1 jphc »e 2'phose 3! PHARMACOLOGY

!

1 f

!

phase 3 (cont.)

i

J phase 4

ί

lOXICOLOGY

TIME REQUIRED (minimum) ATTRITION COST (81976)

j

3yrs(?)

K),000(?) Ι,000(?)

2 yrs

4 yrs

|

10

$30 million

$24

million

AVERAGE EFFECTIVE PATENT LIFE (from NDA approval date)

1966 1977

13.8 yrs 9 yrs

D. C. Heath and Company

Figure 1. The stages through which a new drug must pass before it can be mar keted in the U.S. (32). The time and attrition data are described in the text; the cost data are described in Reference 13.

100-

oJ 1963

• 65

,

,

,

,

,

67

69

71

73

75

YEAR GIVEN TO MAN

Clinical Pharmacology and Therapeutics

Figure 2.

Total number of NCEs given to man worldwide by U.S. companies by year first given to man (13)


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

137

a compound of molecular s t r u c t u r e not p r e v i o u s l y t e s t e d in man (excluding new s a l t s or e s t e r s , d i a g n o s t i c agents, and v a c c i n e s ) . For U.S.-owned companies, NCEs taken i n t o man anywhere in the world f o r the first time from January 1963 (the year the IND r e quirement was first implemented) to the time of the survey (September 1975) were i n c l u d e d . In the case of foreign-owned research-based firms o p e r a t i n g in the U.S., we obtained complete data on t h e i r U.S. experience with NCEs but not on t h e i r worldwide experience. Information was obtained on a t o t a l of 1,103 NCEs, 859 from 36 U.S.-owned companies and 244 from 10 foreign-owned companies. (A more d e t a i l e d d e s c r i p t i o n of t h i s study is in (13).) The p o r t i o n of the U.S. pharmaceutical i n d u s t r y r e s p o n s i b l e f o r the NCEs was h i g h l y concentrated; seven companies accounted f o r oneh a l f of the NCEs and four of these companies accounted f o r onethird. The annual r a t e of NCEs t e s t e d in man by U.S. companies rose from 70 in 1963 to a mean of 94 in 1964-1965, then d e c l i n e d s h a r p l y to a lower p l a t e a u that has been r e l a t i v e l y s t a b l e (with a mean of 62 NCEs per year) from 1966-1974 (Figure 2). The i n t e r p r e t a t i o n of t h i s trend is not simple. The values in 1964 and 1965 are r e l a t i v e l y high whereas those in 1966-1974 are not very d i f f e r e n t from 1963. To i n t e r p r e t t h i s , more i n f o r mation f o r 1963 and p r i o r years is necessary. I f 1963 was an " o r d i n a r y " year, then the temporary upsurge in 1964 and 1965 needs to be explained but the changes in the l a t e r 1960s and e a r l y 1970s have been s m a l l . I f , however, 1963 represents an unusually low year, the subsequent d e c l i n e from the l e v e l s of 1964-1965 has been s u b s t a n t i a l . Our best i n t e r p r e t a t i o n of the present data, based on answers to questions asked of the f i r m s , is that the 1963 values are a r t i f i c i a l l y low (because of the need then f o r companies to d i v e r t t h e i r e f f o r t s toward compiling m a t e r i a l s f o r the r e q u i r e d r e t r o s p e c t i v e IND f i l i n g s on drugs already in c l i n i c a l r e s e a r c h ) , while the 1964-1965 values are a r t i f i c i a l l y r a t h e r h i g h (because of a catching-up p r o c e s s ) . A n a l y s i s by pharmacologic area showed that most NCEs t e s t e d by U.S. companies were in the areas of a n t i - i n f e c t i v e drugs (19.4%), p s y c h o t r o p i c / n e u r o t r o p i c drugs (14.3%),. c a r d i o v a s c u l a r drugs (14.3%), a n a l g e s i c / a n t i - i n f l a m m a t o r y drugs (13.0%), and endocrine drugs (11.8%). The strongest time p a t t e r n s were the l a r g e r i s e and f a l l in the e a r l y years seen o v e r a l l (as d e s c r i b e d above) and p a r t i c u l a r l y w i t h a n t i - i n f e c t i v e and c a r d i o v a s c u l a r compounds, but not with p s y c h o t r o p i c / n e u r o t r o p i c , endocrine, or a n a l g e s i c / a n t i - i n f l a m m a t o r y drugs. A f t e r 1966 the trends were not s t r o n g , but there was a p e r c e p t i b l e d e c l i n e in a n t i - i n f e c t i v e and a r i s e in endocrine compounds. P s y c h o t r o p i c / n e u r o t r o p i c compounds showed a marked f a l l between the e a r l y and l a t e r years studied. In recent years there has been a l a r g e s h i f t in e a r l y U.S.


138

FEDERAL REGULATION AND

CHEMICAL INNOVATION

drug s t u d i e s abroad (Figure 3). From 1963 to 1969, an average of only 8% of U.S.-owned NCEs were first studied abroad by the 36 U.S. f i r m s , but t h i s rose to 34% in 1973. ( I t f e l l to 31% in 1974 but showed a continuing r i s e to 47% in our incomplete data f o r 1975.) The increase in the number of drugs being i n i t i a l l y studied abroad was p a r t i c u l a r l y marked w i t h i n the l a r g e r companies; in 1973 the four l a r g e s t companies first s t u d i e d 50% of t h e i r NCEs abroad. The p r o p o r t i o n of drugs first s t u d i e d abroad a l s o v a r i e d by therapeutic area, with g a s t r o i n t e s t i n a l and endoc r i n e drugs having the highest percentages. The annual r a t e of IND f i l i n g s by U.S. companies d e c l i n e d from an average of 87 per year during the two first f u l l years (1964-1965) to a low of 42 in 1972, with a subsequent r e t u r n to the general l e v e l s p r e v a i l i n g in 1967-1970 (Figure 4). The steepest d e c l i n e occurred between 1965 and 1966; the i n t e r p r e t a t i o n of the magnitude of t h i s d e c l i n e is complicated by f a c t o r s p r e v i o u s l y discussed. By c o n s t r a s t , the r a t e of foreign-owned NCE IND f i l i n g s showed no t i m e - r e l a t e d trend and averaged 19.5 f i l i n g s per year from 1964 to 1974 (range 14-26). The d e c l i n e in the r a t e of t o t a l f i l i n g s was thus due s o l e l y to the d e c l i n e in the U.S. p o r t i o n . T h i s is c o n s i s t e n t with, but does not by i t s e l f prove, the hypothesis that an i n h i b i t o r y i n f l u e n c e was a c t i n g on U.S. companies but not on f o r e i g n companies during t h i s p e r i o d . Of those NCEs that entered the U.S. r e g u l a t o r y system, 12.5% of the INDs f i l e d before 1970 ( i . e . , those which had at l e a s t f i v e years to be acted upon) had reached the stage of NDA submission by 1975. Of the NDAs submitted p r i o r to 1970, 88% were s u c c e s s f u l . The f i n d i n g that d e c i s i o n s on most INDs that were discontinued before the p o i n t of NDA submission were made p r i m a r i l y by the companies themselves has s u b s t a n t i a l i m p l i c a t i o n s f o r the s t r u c t u r e of the r e g u l a t o r y process. Of those compounds that reached the NDA stage, where most of the r e g u l a t o r y assessment by the FDA is i n v o l v e d , only 12% f a i l e d to pass in f i v e years. Nevertheless, the NDA review phase occupies a s u b s t a n t i a l f r a c t i o n of the t o t a l IND-NDA time requirement; f o r many of the drugs that were u l t i m a t e l y approved, the NDA phase exceeded the l e n g t h of the IND phase. The t o t a l time r e q u i r e d f o r c l i n i c a l i n v e s t i g a t i o n s and approval of a s u c c e s s f u l NCE in the U.S. (IND and NDA stages) rose from a mean of 31 months in 1966 (17 months IND plus 14 months NDA) to a peak mean of 71 months in 1969 (28 months IND plus 43 months NDA), and has averaged 62 months over the l a s t two complete years (1973-1974; F i g u r e 5). In the l a s t but incomplete year, 1975, the mean time r e q u i r e d rose sharply to 82 months (55 months IND plus 27 months NDA), mainly due to the r i s e in the d u r a t i o n of the IND stage. The most recent data a v a i l a b l e on the time requirements and the a t t r i t i o n r a t e s are shown in the bottom p o r t i o n of Figure 1. The cost estimates provided in the f i g u r e are from a study by


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

139

75-

YEAR

FIRST

GIVEN

TO

MAN Clinical Pharmacology and Therapeutics

Figure 3. Percent of U.S.-owned NCEs first given to man abroad by year first given to man. Data are shown for all 36 companies, the top 16, the top 8, and the top 4 companies, as determined by ranking the number of NCEs which each company took into man over the entire period (13).



140

Figure 4.

Number of INDs filed by year of filing. Data from U.S. and foreign companies are shown separately and combined (13).


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

141

Clinical Pharmacology and Therapeutics

Figure 5. Duration in months of IND (mean time from IND filing to NDA submission), NDA (mean time from NDA submission to NDA approval), and Total (mean time from IND filing to NDA approval) stages for approved NDAs by year of NDA approval. Data from U.S. and foreign companies are combined and the figures at the bottom indicate the number of NDAs approved each year for U.S. and foreign companies (IS).


142


Hansen(14), who obtained economic data from U.S. firms on a samp l e of compounds that were i n c l u d e d in the NCE study. He found that, t a k i n g f a i l u r e s i n t o account as w e l l as successes, the average cost f o r a U.S. f i r m to develop i t s own NCE to the point of marketing in t h i s country is $54 m i l l i o n in 1976 d o l l a r s . This is higher than previous estimates, l a r g e l y due to c a p i t a l i z a t i o n of expenditure flows and e x c l u s i o n of l i c e n s e d compounds. A s u r v i v a l d i s t r i b u t i o n a n a l y s i s was performed to study the success r a t e s of NCEs in the IND and NDA phases and the amount of time spent in each phase (residence time). There was a trend toward i n c r e a s i n g residence times and decreasing success r a t e s with time, but t h i s trend was not s i g n i f i c a n t with the s t a t i s t i c a l t e s t s employed. The success r a t e s and residence times of U.S. and f o r e i g n companies were q u i t e s i m i l a r in each phase. The duration of the NDA phase v a r i e d s i g n i f i c a n t l y between pharmacologic c l a s s e s . An example from U.S.-owned NCEs was the r e l a t i v e l y quick approval of a n t i c a n c e r drugs in c o n t r a s t to the r e l a t i v e l y long times f o r approval of c a r d i o v a s c u l a r drugs. The d u r a t i o n of the NDA phase f o r all NCE NDAs ( i . e . , not j u s t that subset represented by the cohort with new INDs) rose from a mean of approximately 6 months through the l a t t e r h a l f of the 1950s to a mean of 44 months in 1969, and then f e l l r a t h e r sharply to a mean of 17 months in 1972 (Figure 6). The reasons f o r these l a r g e changes are not at present c l e a r . Some a c t i o n s taken by the FDA may have c o n t r i b u t e d to t h i s shortening of the NDA phase, such as an increased number of P u b l i c Health S e r v i c e p h y s i c i a n s assigned to the FDA, an i n c r e a s e in the number of Advisory Committees, and the i n s t i t u t i o n of new i n t e r n a l management systems at FDA. Since 1972, the duration of the NDA phase has been r i s i n g again to a value of about two years. This p a t t e r n needs f u r t h e r i n v e s t i g a t i o n s i n c e an understanding of what caused it could help to e l u c i d a t e the r o l e of r e g u l a t i o n versus other f a c t o r s in the causation of these changes. T h i s is the first time a data base of t h i s s i z e and degree of comprehensiveness has been compiled on the s t a t e of new drug development in any country. We are c u r r e n t l y o b t a i n i n g f u r t h e r information on i n v e s t i g a t i o n a l NCEs, which will i n c l u d e the reasons f o r termination of c l i n i c a l r e s e a r c h by the firms and f u l l data on l i c e n s e d compounds. These a d d i t i o n a l data will c l a r i f y some of the trends that have been revealed by the present study, and will allow f u r t h e r analyses to be performed of the reasons behind the observed changes. N a t i o n a l O r i g i n of NCEs Marketed in the United

States

(15,

16)

The n a t i o n a l o r i g i n of NCEs introduced onto the U.S. market is a key measure of the l o c a t i o n of pharmaceutical innovation, and of changes in l o c a t i o n . The number and nature of drugs d i s covered or o r i g i n a t e d in each country are important because these data r e f l e c t the s c i e n t i f i c c l i m a t e , as w e l l as r e g u l a t o r y and


DIRADDO AND WARDELL

55

57

Pharmaceutical

59 61

63

65 6 7

Innovation

69

7/

143

7 3 75

YEAR OF NDA APPROVAL Clinical Pharmacology and Therapeutics

Figure 6. Number of NCE NDAs approved and mean duration of NDA stage (months from NDA submission to NDA approval) by year of NDA approval (13)


144


economic c o n s i d e r a t i o n s , in that country. C u l t u r a l and geographic i n f l u e n c e s will a l s o be seen if there is an emphasis on c e r t a i n t h e r a p e u t i c areas or diseases in a p a r t i c u l a r country. An a n a l y s i s using t h i s type of measure can provide a u s e f u l p i c t u r e of worldwide i n n o v a t i v e a c t i v i t y ; furthermore, the f i n d i n g s in one country can a l s o serve as a c o n t r o l group f o r making comparisons with another country in a s s e s s i n g the i n f l u e n c e of n a t i o n a l r e g u l a t i o n s on i n n o v a t i o n . I d e a l l y the o r i g i n of new drugs i n t r o duced onto the e n t i r e world market should be assessed, but data are a v a i l a b l e only f o r c e r t a i n c o u n t r i e s ; our study focused on the U.S. market. Two analyses were performed based on data compiled by Paul deHaen (17, 18) and by Harold Clymer.(19) In one a n a l y s i s the n a t i o n a l o r i g i n of an NCE was d e f i n e d as the l o c a t i o n of the l a b o r a t o r y where the drug's pharmacologic a c t i v i t y was discovered and in the other the n a t i o n a l o r i g i n was taken as the n a t i o n a l i t y of the parent company that owns the drug ( i . e . , the p a t e n t ) . According to both d e f i n i t i o n s of n a t i o n a l o r i g i n , the percentage of U.S. NCE approvals that were accounted f o r by U.S.-originated drugs g e n e r a l l y d e c l i n e d from the e a r l y 1950s through the e a r l y 1970s, but s e v e r a l t r a n s i e n t f l u c t u a t i o n s in t h i s p a t t e r n were observed. Since there was c o n s i d e r a b l e v a r i a b i l i t y from year to year, three-year moving averages were used r a t h e r than y e a r l y f i g u r e s to represent general t i m e - r e l a t e d trends. By l a b o r a t o r y of o r i g i n , the percentage of NCEs o r i g i n a t e d in the U.S. ranged from a high of 76% in the years centered around 1954 to a low of 47% around 1973 (Figure 7). By n a t i o n a l i t y of the parent company, f o r which data were a v a i l a b l e from 1963 to 1975, the percentage of U.S.-originated NCEs ranged from 63% in the years centered around 1964 and 1966 to 38% around 1972 (Figure 8). T h i s d e c l i n e has been followed by a recent r i s e in the p o r t i o n of U.S.o r i g i n a t e d NCEs, but the U.S. has not regained the prominence it had in the e a r l i e r years. A s i m i l a r p a t t e r n was observed in both analyses when the percentages of U.S.-originated " s i g n i f i c a n t " NCEs ( i . e . , those r a t e d by the FDA as r e p r e s e n t i n g important or modest t h e r a p e u t i c advances) over time were c a l c u l a t e d . The three major f o r e i g n c o n t r i b u t o r s to the U.S. market by e i t h e r d e f i n i t i o n of n a t i o n a l o r i g i n have been Switzerland, B r i t a i n , and Germany; the order of t h e i r importance has v a r i e d over time however. Since f a c t o r s other than i n n o v a t i o n , such as commercial cons i d e r a t i o n s a f f e c t i n g f o r e i g n entry onto the U.S. market, i n f l u ence the observed p a t t e r n s , a n a l y s i s of the n a t i o n a l o r i g i n of NCEs using the d e f i n i t i o n s employed here is not a h i g h l y s e n s i t i v e or s p e c i f i c measure of pharmaceutical i n n o v a t i o n . However, the observed trends are c o n s i s t e n t with the t i g h t e n i n g of regul a t o r y p o l i c i e s first in the U.S. and then subsequently abroad. We are c u r r e n t l y o b t a i n i n g data that will improve and expand upon these n a t i o n a l o r i g i n analyses. The new i n f o r m a t i o n i n c l u d e s ,


9.

DiRADDO AND WARDELL

Pharmaceutical

145

Innovation

100η

τ—ι—ι—ι—ι—ι—;—ι—ι—ι—ι—ι—l—ι—I—I—I—I—I—I

1951

1955

I960

1965

I

I

1970

I

»

I

'

1975

40T

YEAR OF NDA APPROVAL

Figure 7. (top) Percentage of NCE approvals accounted for by drugs originated in U.S. Laboratories (three-year moving averages). The dashed line indicates the 50% level (an equal number of U.S. and foreign-originated drugs), (bottom) Num ber of NCEs originated in U.S. and in foreign laboratories, (three-year moving averages).



100.

75-

&*H

I 5*

~

- \ - -/

25

ι—ι—ι—ι—ι—ι—ι—

1964

1968

1972

Δ — Δ U.S. ORIGIN + - + FOREIGN ORIGIN TOTAL

1—ι—ι—ι—ι—ι—ι—ι—ι—ι—I

1964

YEAR

1968

1972

OF NDA APPROVAL

Figure 8. (top) Percentage of NCE approvals accounted for by drugs originated in U.S. parent companies (three-year moving averages). The dashed line indicates the 50% level (an equal number of U.S. and foreign-originated drugs), (bottom) Number of NCEs originated in U.S. and in foreign parent companies (three-year moving averages).


9.

DiRADDO AND WARDELL

Pharmaceutical

Innovation

147

f o r each NCE marketed in the U.S. s i n c e 1963, the c o u n t r i e s of i t s first chemical s y n t h e s i s , i t s first pharmacologic study, and i t s first a d m i n i s t r a t i o n to man. Information on l i c e n s i n g p a t t e r n s and on i n t e r n a t i o n a l t r a n s f e r s of drugs at d i f f e r e n t stages w i t h in companies is a l s o being obtained. These data will c l a r i f y the observed p a t t e r n s of n a t i o n a l o r i g i n and will provide more s e n s i t i v e measures of i n t e r n a t i o n a l s h i f t s in world pharmaceutical innovative a c t i v i t y . Comparative Methods of Measuring Innovation: the United States and Great B r i t a i n

NCEs Marketed in

Since the techniques f o r measuring pharmaceutical i n n o v a t i o n , in p a r t i c u l a r i t s s c i e n t i f i c and medical v a l u e , are not yet w e l l developed, a l t e r n a t i v e approaches to a b s o l u t e measures of innov a t i o n should be explored. An obvious a l t e r n a t i v e is the i n t e r n a t i o n a l comparative approach, comparing the performance of drug i n n o v a t i o n under the U.S. r e g u l a t o r y system w i t h the performance of drug i n n o v a t i o n systems in other c o u n t r i e s having d i f f e r e n t types and amounts of r e g u l a t i o n . C l e a r l y t h i s type of comparison will be a f f e c t e d by i n t e r n a t i o n a l d i f f e r e n c e s other than r e g u l a t o r y o n e s — i n p a r t i c u l a r , the d i f f e r e n t s t a t e s of s o p h i s t i c a t i o n of pharmacological and pharmaceutical s c i e n c e and technology between c o u n t r i e s , and the s t a t e of development and prominence of the i n d u s t r y in d i f f e r e n t c o u n t r i e s economies. Nevertheless, although communication channels from the U.S. N a t i o n a l I n s t i t u t e s of H e a l t h to U.S. firms are p o t e n t i a l l y s h o r t e r , b a s i c knowledge is an i n t e r n a t i o n a l commodity. S u b s t a n t i a l i n f o r m a t i o n can t h e r e f o r e be obtained from i n t e r n a t i o n a l comparisons, as in the case of the i n t e r n a t i o n a l comparison between the U.S. and B r i t a i n f o r the p e r i o d 1962-1971 performed by one of the authors.(20, 21, 22) An update of the comparison of NCEs marketed in the U.S. and B r i t a i n from January 1972 through December 1976 i n d i c a t e d that in t h i s f i v e - y e a r p e r i o d 82 new drugs appeared f o r the first time in one or both of the two c o u n t r i e s . ( 2 3 ) Of these, o n l y 29% became mutually a v a i l a b l e in both c o u n t r i e s — 2 . 4 times as many becoming a v a i l a b l e first in B r i t a i n as in the U.S. Of the 71% that became e x c l u s i v e l y a v a i l a b l e , 2.6 times as many became a v a i l a b l e in B r i t a i n as in the U.S. More important than numerical data are the c l i n i c a l i m p l i c a t i o n s of d i f f e r e n c e s between the two c o u n t r i e s . The l a r g e s t d i f f e r e n c e s have narrowed s i n c e the previous study, but important c a t e g o r i e s in which the U.S. still lagged behind B r i t a i n in December 1976 i n c l u d e d c a r d i o v a s c u l a r drugs, p e p t i c u l c e r t r e a t ment, and c e n t r a l nervous system d r u g s — i n c l u d i n g t h e r a p i e s f o r depression, e p i l e p s y , and migraine. 1


148


Conclusions While the i n h i b i t o r y i n f l u e n c e of r e g u l a t i o n on i n n o v a t i o n is c l e a r , we have not been able to measure the p r e c i s e extent o f t h i s i n f l u e n c e with our present data. The main problem l i e s in s e p a r a t i n g the s p e c i f i c c o n t r i b u t i o n s o f i n f l u e n c e s other than r e g u l a t i o n that are a l s o a c t i n g to i n h i b i t i n n o v a t i o n . Factors such as the g e n e r a l l y i n c r e a s i n g amount o f s c i e n t i f i c evidence r e q u i r e d to document s a f e t y o r e f f i c a c y , together with economic c o n s i d e r a t i o n s , have no doubt c o n t r i b u t e d to the d e c l i n e in inno vation. The a t t r i b u t i o n o f causal r e l a t i o n s h i p s f o r recent p o l i c y changes is helped, however, by the f a c t that we have b e t t e r data on the timing and s i z e o f recent r e g u l a t o r y changes, by c o r r e l a t i o n s between the observed d i f f e r e n c e s in innovation between d i f f e r e n t t h e r a p e u t i c areas and known d i f f e r e n c e s in governmental p o l i c i e s in these areas, by an i n t e r n a t i o n a l comparative approach(20, 21, 22, 23), and by economic analyses.(14) The r e s u l t s from our s t u d i e s , and those of others(24-31), a r e c o n s i s t e n t with the hypothesis that over the past 15 years increased regu l a t i o n has reduced the amount o f pharmaceutical i n n o v a t i o n . Acknowledgement A c q u i s i t i o n of the new data described in t h i s paper was supported by a grant from the N a t i o n a l Science Foundation (#75 19066-00). Any o p i n i o n s , f i n d i n g s , c o n c l u s i o n s , o r recommenda t i o n s expressed in t h i s paper a r e those o f the authors and do not n e c e s s a r i l y r e f l e c t the views of the N a t i o n a l Science Foundation. Literature Cited 1. 2. 3.

4. 5. 6. 7. 8.

Report of the President's Biomedical Research Panel, Appendix A, DHEW Publication No. (05) 76-501, p. 236, 1976. Modell, W., C l i n . Pharmacol. Ther., (1976) 19, 121. Bresler, J.Α., "A l e g i s l a t i v e history of the Federal Food, Drug and Cosmetic Act (Revised)," Congressional Research Service, Library of Congress, 77-98 SP, 1977. "Non-clinical laboratory studies: Good laboratory practice regulations," Fedl. Reg., (1978) 43, 59986. "Obligations of sponsors and monitors of c l i n i c a l i n v e s t i gations," Fedl. Reg., (1977) 42, 49612. "Obligations of c l i n i c a l investigators of regulated a r t i c l e s , " Fedl. Reg. (1978) 43, 35210. "Standards for i n s t i t u t i o n a l review boards for c l i n i c a l investigations," Fedl. Reg., (1978) 43, 35186. Association for the B r i t i s h Pharmaceutical Industry: Regarding sponsor/monitor regulations, B r i t . Med., (1978, in press).


9.

9. 10. 11. 12.

13. 14.

15. 16.

17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

27. 28.

DIRADDO A N D W A R D E L L

Pharmaceutical

Innovation

149

Blozan, C.F., "Results of the nonclinical toxicology labora tory Good Laboratory Practices p i l o t compliance program," Food and Drug Administration, OPE Study 42, (1977). Wardell, W.M., C l i n . Pharmacol. Ther., (1978) 24, 374. Pharmaceuticals Working Party of the Chemicals EDC, "Innova tive Activity in the Pharmaceutical Industry," National Economic Development Office, London, 1973. U.S. Congress, Senate, Committee on Labor and Public Welfare and Committee on the Judiciary, "Examination of New Drug Research and Development by the Food and Drug Administration," 93rd Congress, 2nd Session, 25 and 27 September 1974, pp. 619-633. Wardell, W.M., Hassar, M., Anavekar, S.N., and Lasagna, L., Clin. Pharmacol. Ther., (1978) 24, 133. Hansen, R., Center for Research in Government Policy and Business, University of Rochester, GPB 77-10 (1977), "The pharmaceutical development process: Estimates of current developmental costs and times and the effects of regulatory changes." Hassar, M., Clymer, H.A., Wardell, W.M., and Lasagna, L. (Abstract), C l i n . Pharmacol. Ther., (1976) 19, 108. Wardell, W.M., Hassar, Μ., and DiRaddo, J., "National origin as a measure of innovative output: The national origin of new chemical entities marketed in the U.S." in Lasagna, L., Wardell, W.M., and Hansen, R., "Technological Innovation and Government Regulation of Pharmaceuticals i n the United States and Great B r i t a i n , " f i n a l report submitted to the National Science Foundation, August 1978. DeHaen, P., Pharmacy Times, (1976) 40. DeHaen, P., "New Product Survey, 1976: Newly Synthesized Drugs Introduced i n the United States," Paul deHaen, Inc., New York, 1977. Clymer, H., Unpublished manuscript, (1975) "NDA approvals new chemical entities, 1950-1974." Wardell, W.M., C l i n . Pharmacol. Ther., (1973) 14, 773. Wardell, W.M., C l i n . Pharmacol. Ther., (1973) 14, 1022. Wardell, W.M., C l i n . Pharmacol. Ther., (1974) 15, 73. Wardell, W.M., C l i n . Pharmacol. Ther., (1978) 24, 499. Baily, M.N., J . P o l i t . Econ., (1972) 80, 70. Grabowski, H.G., "Drug Regulation and Innovation: Empirical Evidence and Policy Options," American Enterprise Institute for Public Policy Research, Washington, D.C., 1976. Grabowski, H.G., "Regulation and the International Diffusion of Pharmaceuticals," paper presented at the symposium on "The International Supply of Medicines," American Enterprise Institute for Public Policy Research, Washington, D.C., 1978. Grabowski, H.G., Vernon, J.M., and Thomas, L.G., J . Law Econ., (1978) 23, 133. Jadlow, J.M., Unpublished Ph.D. dissertation, "The economic effects of the 1962 Drug Amendments,", University of Virginia,



150

29.

30. 31. 32.

1970. Peltzman, S., "The benefits and costs of new drug regulations," in "Regulating New Drugs," R. Landau, Ed., pp. 113212, University of Chicago, Center for P o l i t i c a l Study, Chicago, 1973. Peltzman, S., J. P o l i t . Econ., (1973) 81, 1067. Peltzman, S., "Regulation of Pharmaceutical Innovation: The 1962 Amendments," American Enterprise Institute for Public Policy Research, Washington, D.C., 1974. Chien, Robert I., Ed., "Issues in Pharmaceutical Economics, D. C. Heath and Company, Lexington, MA, 1978.

RECEIVED March 8, 1979.


Methodology for Measuring the Effects of Regulation on

Recommend Documents