More drugs fail for business, rather than performance issues

More drugs fail for business, rather than performance issues

The word “failure” is heard a great deal in pharma. Companies want to fail faster if they are going to fail at all. The challenge if getting a drug to market is huge, and the percentage of failures is high – and costly.


The most expensive point of failure in drug R&D is discontinuation in late-stage, phase 3 clinical trials, explains an article by Mike Rea and Eneida Pollozi in Fortune. Mike Rea is the CEO of IDEA Pharma, and Eneida Pollozi is a strategy consultant at the same company.


In the decade between 2008 and 2017, 420 pharma phase III trials attributed failure to “termination, suspension or withdrawal,” and another 350 used “unspecified or other” as the reason for failure of potential drugs. One third of the “failures” were because of low clinical trial recruitment and completion rates. Twenty-seven percent failed for lack of efficacy, meaning that the proposed drug worked no better than placebo or a comparator treatment, double the number that failed for adverse events or side effects.


Fifty-one of the terminations were for “Business/Strategic Decision.” These products are tanked because the company thinks there is less return from the drug than the cost of developing and marketing it, even though the drug may provide value to patients. Sometimes companies decide to go in another direction or make choices between potential candidates to put on the market, but these drugs could potentially be useful medicines. Maybe there is a better way to analyze the drug to enable it to be useful.


Thehe company might have a dollar-figure cutoff for drug sales to reach. Forecasts can be wrong, and perfectly good drugs can be cut out of the company’s plans. As the article says, they “failed” a false test. Possibly, the company projects that its new drug candidate will perform less well than a competitor already out there. It is unlikely that Phase III data can reach such a conclusion, but that may be the basis for making the decision to stop the process.


As the Fortune article says, “So, for all the reasons a drug might ‘fail for business plan,’ there are a host of reasons to believe that a body with different interests might make a different decision. As we know, two similar-looking but different companies might well have taken different decisions, not least because forecasts are remarkably subjective.” In other words, companies with different financial motives will approach the process differently, and some companies will want to make sure their failed drugs are not resurfacing elsewhere.



The authors conclude by saying that if a product fails “for business plan,” it often makes sense to ask who else should have access to that drug, “to arrive at a different conclusion about its strategic value, and potentially to launch a medicine that may not have satisfied its original company that worked on it – but which still might meet patients' needs.”


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