We expect clinical development programs to fail four times out of five. If we don’t take a more progressive approach, we may need to revise that expectation down, to nine times out of ten.
Staggeringly high failure rates and costs have made discussion of rates, reasons and remedies for clinical development an industry obsession. Matthew Herper reported in Forbes in August 2013 that the cost of creating a new drug has reached $5 billion. The number is so great in part because the convention is to look at costs per approved new drug, burdening each approved product with costs of projects that failed to receive regulatory approval. Past analyses show that about 80% of new molecules entering phase 1 fail to receive marketing approval. For example, a 2010 analysis by Joseph DiMasi et al showed the likelihood of ultimate approval for molecules from the 50 largest pharmaceutical companies is 19%. Hence the industry rule of thumb: four programs out of five will fail.
New Light on Failure Rates and Reasons
Two new analyses published in January 2014 examine current clinical development challenges. One looks at failure rates by clinical trial phase. The other looks at the frequency of different reasons for regulatory denials and delays. “Clinical development success rates for investigational drugs” (Nat Biotechnol. 2014 Jan;32(1):40-51.) by authors from BioMedTracker, the Biotechnology Industry Organization and Biotech Strategy & Analytics, looks at success/failure rates by phase in the period 2003-2011, based on data in the BiomMedTracker database. The authors take a new approach, looking at molecules from a greater range of companies, including biotechs, and examining success by indication. “Scientific and regulatory reasons for delay and denial of initial applications for new drugs, 2000-2012” (JAMA. 2014;311(4):378-384.) presents an analysis by an FDA team based on agency correspondence and reviews. The analyses work from different perspectives and different sources, but examine time periods and development projects with substantial overlap.
Both of the new analyses show reasonable success rates for products that are submitted for BLA or NDA review. The January Nature Biotechnology article shows an 83.2% success rate for NDAs and BLAs submitted while the FDA’s analysis in JAMA shows that 73.5% of NDAs submitted for NMEs receive FDA approval either upon first submission or subsequently. Only 50% of NDAs were approved on first submission, perhaps accounting for the widespread perception of a higher NDA failure rate. On the flip side, overall success rates in clinical development are even lower than previously recognized, according to the authors who analyzed the BioMedTracker database. Likelihood of approval is a mere 10.4% for molecules entering phase 1.
The Bermuda Triangle of Biotech Development
It is no surprise that most attrition occurs in phase 2. However, a chart based on data from the article on success rates by phase leaves a striking impression of phase 2 as the Bermuda Triangle of biopharma development, with 67.6% of projects failing to transition to phase 3. The good news is that we know where to concentrate the search for remedies for chronic high failure rates. (The chart shown inverts the data to show failure rates rather than success rates as in the original article.)
Where to Look for Failure-Rate Remedies
Near simultaneous publication of the articles in Nature Biotechnology and JAMA provides an unusual opportunity to consider current clinical development challenges based on fresh information from two comprehensive, independent analyses. Look for an addition to the Health Decisions white paper library soon that draws lessons for biotech development from both of the referenced articles, as well as FDA’s end-of-phase 2a meeting guidance, a PhRMA position paper on proof of concept and first-hand experience with biotech studies and programs. The white paper identifies proactive steps for increasing success rates, with particular attention to phase 2.
We must do better than a 10.4% likelihood of approval – and we can!