Prelim 1 Flashcards
pharmaceutical contributions to improvements in health and welfare
- surfactant and premature baby survival
- anesthesia and surgery
- vaccines and contagious diseases
- oral contraceptives and women’s education/work experience
- pharmaceutical companies have huge expenditures on marketing/administration and the prices charged are way more than cost of production
- only a few handful of drugs have been significant
- “new” drugs are just variations of existing ones
- dependent on government-granted monopolies
Marcia Angell Opinion on Pharmaceutical Industry
- approval of Alzheimer’s drug with weak scientific support
- operation warp speed sent $20 to Pharma firms to pre-buy covid vax
recent favorable/generous actions of US gov for Pharma
- new law in Aug 2022 that will cut drug prices in Medicare by requiring price negotiations, capping drug price increases, and reducing out-of-pocket costs
recent unfavorable actions of US gov for pharma
what phases are in the first 3-6 years of drug development?
drug discovery and preclinical testing
when is the IND submitted?
after preclinical testing
when do the clinical trials occur in drug development timeline?
6-7 years
how many volunteers are in phase 1 clinical trial?
20-100
how many volunteers are in phase 2 clinical trial?
100-500
how many volunteers are in phase 3 clinical trial?
1,000-5,000
when is an NDA submitted?
after phase 3 clinical trial
how long is the FDA review?
0.5-2 years
- understand how a disease affects the body
- hypothesize how a drug might intervene in the disease process
- identify candidate drugs
drug discovery
compounds that have favorable properties, likely to be effective, but not likely to be (too) toxic
candidate drugs
- gene regulator protein is active in early embryonic development to allow cells to move around the embryo, but then it becomes dormant
- cancer tumor cells reactivate and “hijack” its process to move cancer cells around the body
- a drug that could prevent the reactivation could, in theory, prevent some cancers from metastasizing
- no company “owns” this theory/hypothesis
drug discovery - twist protein
- hypothesis created on how a drug could stop the reactivation
- researchers prove how this theory works in cells
- pre-clinical (before human) phase with computer-based simulation and test compounds in vitro/in vivo
- narrow focus to fewer compounds
steps for twist protein drug discovery
- before human subjects
- identify compounds likely to work
- computer based simulation, molecular modelings nd combinatorial chemistry help choose a successful compound
- test compound(s) in vitro (cells in lab) and in vivo (animals with disease)
- narrow to fewer compounds
pre-clinical trial
human epidermal growth factor receptor 2: part of a family of genes that produces a protein that regulates the growth and development of cells
HER2
- 1985: researchers discovered that an over expression of HER2 causes cells to multiply rapidly
- 1987: researchers linked HER2 to breast cancer (an over expression was found in 25-30% of cancers)
- 1998: FDA approved this drug for patients with favorable genetic makeup (I.e. patients with HER2+)
Herceptin case study
Trastuzumab binds to excess HER2 protein and attracts cells that destroy these proteins
Herceptin
Is Herceptin a pharmaceutical or a biologic?
biologic
- small MW (<1,000)
- made by chemical synthesis by chemists
- generally oral solids because they’re stable enough to digest
- pharmacy benefit
- generic law: HW act
- ex, lipitor for cholesterol
pharmaceutical
- large MW (>10,000)
- made from cultures of living cells
- often injected or infused (not stable for digestion)
- often medical benefit
- Generic law: biologics price competition and innovation act of 2010
- ex, Herceptin for breast cancer
biologic
- microbiology, genetics, and the human genome project
- recombinant proteins - understand how to make proteins from a gene sequence
- monoclonal antibodies (-mab).- lab created antibodies that bind to a target
- biologic drugs created from living organisms
scientific breakthroughs for pharmaceutical industry
How much does biologics account for in US Pharmaceutical sales?
43%
- greater growth rate than pharmaceuticals
- market grows faster than pharmaceuticals
- increasing over the past 20 years (~13% increase)
biologics spending
what type of drug are vaccines?
biologic
now a rising share of FDA approvals
biologic approvals
effect for an aggressive breast cancer especially those recently diagnosed, however, even those 5 years from diagnosis had a 23.4% probability of survival
Herceptin and survivability
where does a drug discovery happen?
usually at a university funded by the NIH
Who owns the intellectual property for a drug discovery?
the scientist
allowed inventors and grantees keep intellectual property offering incentives for researchers to relicense
bayh-dole act of 1980
federal government had accumulated thousands of patents on commercializable technology, but hadn’t relicensed them
motivation for bayh-dole act of 1980
- a never-used “back door” in bayh-dole act
- NIH can “march in” and reassert ownership of IP if holder isn’t developing the technology or if it is not satisfying “health and safety needs”
- NIH recently denied 6 petitions to exercise these rights
“march-in rights”
why do researchers work with pharmaceutical companies on top of NIH and universities?
funding, but now pharma firm owns most of IP
why would the drug development project be over if the pharma firm decides to not go forward?
pharm firm owns the IP
genentech is ______, as slamon is __________
record label; band
why does Genetech get to decide whether and when to do the moss protein test rather than Dr. Slamon?
the pharma firm needs a successful test for an IND before phase 1 and Slamon might be biased
understand compound, side effects, develop evidence for IND approval
pre-clinical testing
government regulation starts at this early stage before any human testing (pre-clinical) to show FDA why they [pharma firm] think the drug is safe, worthy of clinical trial, and manufacturing consistency
investigational new drug
What was the unintentional Rx that came out of testing _____ which was originally intended to lower BP?
viagra
- preclinical phase
- IND
- Phase 1 clinical trial - safety, dosing, 10s of subjects
FDA consult
- Phase 2 - safety, early evidence of effectiveness, hundreds of subject
FDA consult
- Phase 3 - safety, effectiveness, thousands of subjects
- Approval if safe, effective, and produced reliably
FDA involvement in drug development and trials
formulation and mechanism of action,
evidence for investigational new drug approval
example: Herceptin (trastuzumab; active pharmaceutical ingredient (API)) is a humanized IgG1 kappa monoclonal antibody that selectively binds with high affinity to the extracellular domain of the human epidermal growth factor receptor 2 protein, HER2. Trastuzumab is produced by recombinant DNA technology in a mammalian cell (chinese hamster ovary) culture contain the antibiotic gentamicin (manufacturing process)
drug formulation
example: The HER2 (or c-erbB2) proto-oncogene encodes a transmembrane receptor protein of 185 kDa, which is structurally related to the epidermal growth factor receptor. Herceptin has been shown, in both in vitro assays and in animals, to inhibit the proliferation of human tumor cells that overexpress HER2
mechanism of action
what does the mechanism of action provide the FDA?
why you should let us do this and why it might be effective
- serum concentrations
- pharmacokinetics
- half-life
- dose-dependent
- clearance
- safety
phase 1 trial considerations
why are multiple doses of drugs tested in phase 1?
safety, pharmacokinetics, and optimal dosing
concentration (of active portion) in blood
serum concentration
time of absorption, distribution, metabolism, and execution (ADME)
pharmacokinetics
time for half of API to become inactive
half-life
larger dose –> predictable increases in time of ADME
dose-dependent
rate at which wastes are cleared
clearance
2 oz. of alcohol will clear renal 0.06 L/h, sweat 0.02 L/h, breath 0.00007 L/h
~5 hours to clear BAC to 0.00
pharmacokinetic of ethanol
assemble preliminary evidence on safety and efficacy
phase 2 clinical trial goal
why would the FDA not approve a drug based on phase 2?
too small subject size to demonstrate safety and efficacy
- presence of common side effects
- whether biomarkers in the body are reacting as expected (target HER-2?)
- whether the disease reacted as expected (tumor growth affected?)
- sometimes experimentation with dosage
phase 2 clinical trial
- What type of patients (and how many) to enroll in clinical trial?
- Primary health endpoint that will be measured and how it will be measured?
- What treatment will the experimental and control patients receive?
pharmaceutical drug development decisions
- multicenter, randomized, controlled clinical trial
- 469 subjects with metastatic breast cancer who had no previous chemotherapy treatment and whose tumors overexpress HER-2
- subjects eligible if they had 2+ or 3+ levels of over expression of HER2
- randomized to receive chemotherapy alone or in combination with Herceptin (testing against SOC)
Herceptin clinical trial design
many physicians throughout the US sign-up their own patients for trial
multicenter
phase 3 clinical trial was only aimed at high-HER2 patients so FDA will only approve its indication for high-HER2 (even if it would be beneficial for low-HER2 there is no evidence)
on-label indication for Herceptin
How would low-HER2 patients receive Herceptin?
off-label prescription
how does the clinical trial design impact labeling and approval?
FDA will only approve an indication for the specific type of subjects that were tested in the clinical trial even if it would be beneficial to all subjects with condition
- how the drug can be marketed
- whether health insurers choose to pay for it and how much
- the types of patients who are prescribed the drug
drug label impact
true or false: FDA controls prescribing
false
allows a drug to be sold in the US and allows drug firms to market the drug, but has no influence on prescribing - left up to physicians and insurer
FDA approval
- physicians can prescribe any FDA approved drug either as on-label or off-label treatment
- insurer may not pay for it
- medical licensing and malpractice will restrict prescribing
physicians and insurers on prescribing
how many prescriptions are uses as off-label?
21%
how many off-label prescriptions are not supported by evidence of clinical efficacy?
70%
what is the most common development delay?
difficulty recruiting appropriate patients for clinical trials
allowing patient to receive an experimental drug even if they are not enrolled in its clinical trial
compassionate access
- Genentech was preparing to test bevacizumab in a phase 3 colorectal cancer trial
- mechanism of action: “chokes off” the blood supply of cancerous cells
- VEGF-A is a chemical signal that stimulates to its receptors (Fat-1 and KDR) on the surface of endothelial cells
- administration of bevacizumab to xenotransplant models of colon cancer in mice caused reduction of microvascular growth and inhibition of metastatic disease progression
Avastin case study
- subject consideration:
—- stage 1 subjects: cancer is localized so it hasn’t spread to nearby lymph nodes or distant sites
—– stage IV subjects would be more difficult because cancer has spread beyond the initial site
—– 2.5x more stage IV colorectal cancer pt receive drug treatment in US than stage II/III - look at comparator drug to see what control group should get: brand and generic chemo
- audiences for clinical trial
- trial length (choose an outcome that won’t take years to happen)
Avastin clinical trial design considerations
wants clear evidence of safety and efficacy in clinical trial
FDA
- will be the ones prescribing
- want to know whether Avastin is really better than current alternatives
- want patients to recover or at least survive
physicians
- randomized controlled trial
- subjects were patients with stage IV colon cancer
- treatment: 402 subjects given Avastin and generic chemo (5-Fu)
- control: 411 subjects given irinotecan (brand) + 5-FU
- primary endpoint: median survival
- secondary endpoint: response rate and time to progression
- side effects: abdominal pain, diarrhea, and nausea
Avastin clinical trial design
why were stage IV patients chosen over stage I/II for Avastin?
because median survival wouldn’t have been applicable and this is better to prove clinical benefits. if stage I/II were chosen response rate would have to be the primary endpoint which isn’t as strong
based on phase 3 RCT for Avastin…
- physicians will be too cautious to prescribe off-label until later studies test the efficacy
- physicians will try on a small number of early stage pt and evaluate efficacy in own practice
- physicians will infer Avastin will work better for stage II pt than any existing alternative
predicting physician behavior
developed for other health conditions and patient populations
Feb 2004: FDA approved 1st line metastatic colorectal cancer
June 2006: FDA approved 2nd line metastatic colorectal cancer
June 2006: Lucentis (a lower dose of Avastin) approved for macular degeneration of the eye
Oct 2006: approved for lung cancer
Feb 2008: Accelerated approval for metastatic breast cancer (met its secondary rather than primary endpoint)
May and July 2009: approved for glioblastoma (brain) and renal cell carcinoma
Dec 2011: FDA rescinds approval for metastatic breast cancer because it failed to meet its primary endpoint
Genentech continued drug development for Avastin
generally, the most important outcome for patient and the FDA’s focus in its approval decisions
primary endpoint
a cause or consequences of primary endpoints; side effects, convenience, “nice to haves”
secondary endpoint
- AM-pharma was a startup with no approved drugs who wanted to target kidney failure after a sepsis diagnosis
- found recombinant alkaline phosphatase protects organs
- two potential endpoints: kidney function (primary) or mortality (secondary)
RecAP case study
- Results in March 2018: no effect on short term kidney function, but 40% reduction in all-cause mortality
- However, since primary endpoint was not achieved, interpreted as bad news
- Pfizer, who had bought an option to acquire AM-Pharma, declined to acquire
- AM-Pharma got other investors and continued
AM-Pharma Phase 2 trial
- 1400 subjects
- Relatively small number of patients and short follow-up
$163 M is cheap for a phase III trial - Primary endpoint: 28-day mortality
- Secondary endpoints: 90- and 120-day kidney function and quality of life
- Results: no reductions in 28-day mortality (primary)
Improvements in kidney functions (secondary) - Because 28-day mortality is primary endpoint, FDA is unlikely to approve based on these results
- AM-pharma now faces a difficult decision: raise yet more money for a further trial or give up
AM-Pharma Phase 3 trial
- prevalence/incidence
- greatest clinical benefit
- differentiation
- approval probability
- off-label prescribing
optimal phase 3 trial design
what stage of the disease do most of the patients have (e.g. stage I/II vs. Stage IV cancer)?
prevalence (optimal phase 3)
where can a drug add the most value?
- For colorectal cancer, stage I and II patients have a very good chance to survive after surgery without drugs
- For stage IV and III, the drug treatment can make a big difference
- For other diseases, a drug might provide the greatest health benefit for relatively healthy/robust patients
greatest clinical benefit (optimal phase 3)
in what type of patients can your drug best differentiate itself from competitor drugs?
differentiation (optimal phase 3)
what type of patients will maximize the approval probability and/or minimize the cost of running the trial?
approval probability (optimal phase 3)
will the trial facilitate off-label prescribing?
off-label prescribing (optimal phase 3)
two large, randomized, double-blind trials comparing an experimental drug to an existing drug
89% of approved drugs had randomized trials
80% had double-blind
32% compared experimental to an active ingredient in an existing drug
55% compared to a placebo
13% compared to none
Number of patients: median 760 across both arms of trial
Length of trial: 34% followed patients for 6 months or longer
Number of trials: 63% ran two separate phase III, or pivotal, trials
scientific gold standard for phase 3
- are there health benefits (actual vs. expected) vs. the control group?
- if so, do the health benefits outweigh the possible side effects or safety issues?
FDA decisions rule
The FDA often mandates post-marketing studies as a condition for approval, to explore whether safety issues in a RCT persist in a broader patient population
phase 4 studies
true or false: the FDA considers the drug’s potential price and European regulatory bodies
false
What does the FDA consider when deciding to approve a drug?
availability, efficacy, and side effects of existing clinical alternatives
balance protecting the public from unsafe or ineffective products and speed access to important new products
role of the FDA
Late 1800s-early 1900s: ineffective and sometimes dangerous “patient medicines” were heavily advertised
1902: biologics control act
1906: pure food and drug act
1938: Food, drug and cosmetic act
1962: Kefauver-harris amendment
history of FDA drug regulation
established standards for safety, purity, and potency of vaccines
biologics control act (1902)
creation of the FDA, accurate labeling required
pure food and drug act (1906)
- triggered by sulfanilamide disaster
- drugs must be proven safe before being marketed
- companies must notify FDA before products are sold
food, drug, and cosmetic act (1928)
- triggered by thalidomide incidents
- drugs must be formally approved by FDA
- required “substantial evidence” of efficacy for drugs
- companies must report adverse events on ongoing basis
Kefauver-harris amendment (1962)
- pharmacist dissolved it in diethylene glycol (antifreeze) to make a liquid
- sold as an effective streptococcal treatment in solid form
- a woman wrote to President Roosevelt describing the death of her daughter, urging him to prevent the sale of these drugs
- resulted in food, drug, and cosmetics act of 1983
sulfanilamide disaster
- treatment for morning sickness (anti-nausea)
- became very popular in Europe where there was no FDA
- US FDA blocked its use in America
- found to cause birth defects and FDA was seen as a hero
- resulted in Kefauver-harris amendments (1962)
thalidomide incidents
- Marketed for teething and colicky babies…contained morphine
- Cocaine toothache drops
- Aspirin and heroin ads
- Claimed to cure many ailments. Contained arsenic, opium, and insect parts
“patent” medicines of early 20th century
- key policy tradeoff: greater protection means less innovation
- “The FDA is responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation, and by regulating the manufacture, marketing, and distribution of tobacco products”
“The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate science-based information they need to use medicines and foods, and to reduce tobacco use to improve health”
FDA mission statement
- slow response from medical community
- galvanized LGBT activism
- model of disease-specific activism
- even after successful clinical trial, FDA approval might take 2 years
- individuals will rare disease have a group representing them to FDA and congress
treatment of HIV/AIDs
drug is not safe, yet FDA approves; approves a drug that is later found to have harmful side effects
type 1 error
drug is safe, yet FDA rejects; delaying or not approving a drug that ultimately proves to be benefitical
type 2 error
type ___ errors are visible and receive a lot of media attention; type ___ errors usually do not receive much attention
1; 2
FDA worried about type ___ error because they want comprehensive information which leads to bigger, longer trials. While Drug firms are worried about type __ errors because they want minimal information for a cheaper, quicker trial
1; 2
a medication used for Duchenne muscular dystrophy which has an average life expectancy of 26; first approved drug for biotech firm Sarepta
exondys 51
- the drug is very expensive to make so only 14 subjects were in the trial
- 12 subjects improved by 0.28%, but experts say 10% is needed to prove symptom improvement
- with evidence from phase 1 only, firm filed with the FDA, claimed couldn’t enroll patients for a placebo-controlled trial
- patient advocates heavily campaigned for approval
- price was set at $300K per patient
exondys 51
FDA approval in question when safety and/or efficacy is uncertain yet it would be a medical breakthrough for a rare disease/significant benefit
ambiguous case
- approval and label letting the physicians/pt decide
- approve after considering alternatives
- approve and wait-and see (FDA or biotech firm can withdraw)
- Deny and encourage further testing
FDA options for difficult approvals
ex: VESIcare now has a black-box warning for potential fatal risks because FDA decided to do this during approval
approve and label
- FDA knows the physicians will prescribe it off-label to other populations
- FDA indication can be influential, especially regarding insurance reimbursement
approve the drug for subpopulation
ex: Cymbalta: “While these serious side effects (liver damage and allergic reaction) have been associated with the use of Cymbalta, they have occurred in less than 1% of patients. There are a finite number of drugs available for the treatment of chronic musculoskeletal pain, all of which are associated with rare, serious side effects. There are patients with whom none of the available treatments are effective”
approve after considering alternatives
ex: withdrawal of Vioxx
- most famous type I error
- treated osteoarthritis pain without causing stomach bleeding
- 80 million Rx dispensed generating $2.5 B
- 2004: Merck voluntarily withdrew Vioxx from the market because of concerns about increased risk of heart attack and stroke associated with long-term, high-dosage use
- FDA did not withdraw Vioxx, and in fact in 2005 released a memo encouraging return
- More common: FDA might place a “black box” warning on a drug’s label if it has serious side effects
approve and wait-and-see
- provision of an unapproved drug; “compassionate use”
- FDA and drug firm must both approve
- FDA will approve if condition is serious or life-threatening and providing the drug will not interfere with a clinical trial
- Drug firm must assent to _____
expanded access
- Individual access: a physician determines benefit > risk
- Intermediate-size use: a collection of individuals
- Widespread use: between phase 3 & approval
3 pathways for expanded access
example - trump using Regneron’s antibodies, Gilead’s remdesivir, dexamethasone during early Covid
expanded access
might not approve by charging a “direct cost” that won’t be covered by insurance or be far less than eventual retail price because it deters clinical trial enrollment and is a liability exposure
drug firms and expanded access
- Approve all drugs that provide a health benefit to the control treatment
- Provide substantial (and clear) information to physicians and patients regarding possible side effects and safety issues
- Allow each physician/patient to decide if the expected health benefits exceed the expected health risks rather than having the FDA make that decision for all patients
- Rationale: We don’t see the costs of drug denials
- type I error is more consequential for FDA so may deny more drugs
libertarian view on FDA approval
was originally voted against by the FDA, but then was approved and required Phase IV clinical trials which proved significantly slower respiratory decline - would have been type 2 error if actually rejected
exondys 51 FDA approval process
Perception by many that the FDA was favoring safety objectives and stifling innovation
proposed fast track, breakthrough therapy, accelerated approval, and priority review
policy to reduce approval time
drug treats serious condition and has the potential to address an unmet medical need ex. HIV/AIDS treatment
fast track
a subset of the fast track due to “substantial improvements”
breakthrough therapy
FDA has stated it will accept improvement on a secondary endpoint because of a serious condition and unmet medical need
accelerated approval
FDA will try to review in six months
priority review
- goal: review new drug application (NDA) faster
- FDA commits to reviewing NDAs quickly (90% of priority in 6 months and 90% of standard in 12 months)
- industry fees provide 52% of FDA’s drug evaluation funding
- more funding has allowed for more FDA staff hired
- has been renewed every 5 years
prescription drug user fee act of 1992 (PDUFA)
- helped reduce approval times on average (for branded drugs)
- pharma firms directly fund FDA’s budget (conflict of interest??)
- never-before-seen drugs qualified for faster approval
PDUFA outcomes
The FDA approves drugs if they demonstrate a health benefit (usually, but not always in a RCT) and have relatively benign side effects or safety issues
approval factors
Pharmaceutical firms cannot market drugs for off-label uses, but physicians can use drugs for patients/conditions other than those formally treated in clinical trials
marketing regulations
Developing a drug takes a long time, is expensive, is not guaranteed to be successful, and is heavily regulated by the government
development process
Drug development decisions have long-lasting effects on how drugs can be marketed and how they are perceived by physicians, patients, and insurers
medical impact
- Encourages FDA to accept “real-world evidence”
- Instead of a randomized controlled trial, a drug company could submit evidence from actual patients
- Encourages FDA to accept what are currently “secondary endpoints” as “primary endpoints”
21st century cures act (2016)
actual patient populations, cheaper to obtain approval for off-label indications
pros 21s century cures act
easier to “game” or data-mine to find a population with good outcomes
cons 21st century cures act
- drugs that are used off-label for certain indications will try to use data from these off-label uses
- importance: how pt using off-label are improved to make it an on-label indication
most likely application of cures act
- For cancer drugs, usually primary endpoint is mortality and secondary endpoint is tumor progression
- Using tumor regression: shorter clinical trial, easier to study drugs for early stage cancers
choosing primary vs. secondary endpoints
Why are biotech and pharmaceutical firms willing to spend so much money to develop a new drug?
patents
Why do pharmaceutical firms re-invest about 20% of their revenues back into R&D?
patents
- profit usually grows steadily over an extended period then falls precipitously
- Invest ~25 M in drug development for ~11 years
- Phase 1-3 clinical trials: invest ~50 M ~2 years
- Drug launch → Slow uptake; Takes a while for physician to trust treatment and insurance to cover
- Drug profits for ~19 years driven by patient consumption
- ~year 10-13 drug plateau then drops suddenly when generics/biosimilar enter the market; patent ends
average product profile
allow a pharmaceutical firm to recover R&D costs; expiration triggers fierce competition
patents
- bioequivalent competitors
- high prices
- competitive pricing
- generic protection
patent protection
Without patent protection, any firm could take a drug the day it is approved by the FDA and “reverse-engineer” it
They could sell a bioequivalent version of the drug without having invested millions of dollars developing it
bioequivalent competitors
Patents allow a firm to charge a price above the cost of producing the drug to make a profit and recoup R&D costs
patent pricing
Multiple firms in competition would lead to drug prices close to production cost, meaning R&D couldn’t be recouped
competitive pricing
Patents prevent other firms from producing a generic, or bioequivalent, copy of a drug for the 20-year life of a patent
generic protection
- a negative right; keeps someone else from doing something
- a limited grant from the U.S. government giving the inventor the right to exclude others from making, using, or selling the patented invention in the US
- limited: can only exclude others from practicing the invention for a limited period of time
patent
when a drug has _________ it won’t attract as many generics
low sales
what percentage of patients eventually shift to the generic (small molecule) version once its available?
97%
- automatic substitution at pharmacy
- pressure from payers/formulary placement
loss drivers (switching to generic)
cut the prices substantially once they enter, and the more competition the lower the price
generics
formularies with _____ copayments encourage use of less expensive drugs and foster discounts; insurance will make it cheaper to use the generic by raising co-pays for branded
tiered
How many prescriptions are now generics?
90%
often combined claims
1. active ingredient
2. method of use
3. drug product patent
3 types of prescription drug patent
strongest legally; defines drug molecule but people can use a similar molecule
active ingredient patent
a unique application of a drug (e.g. the treated health condition)
method of use patent
weakest legally; defines the formulation, dose, or manufacturing process (key for biologics, ex. chemical steps)
drug product patent
when do pharmaceutical firms usually file an active ingredient (AI) patent?
discovery or pre-clinical phase
What is the most important patent?
active ingredient
what kind of patent is this for patanol?
ex: A method for treating allergic eye diseases (method of use) in humans that involves stabilizng conjuctival mast cells by topically administering to the eye a composition made up of a therapeutically effective amount of 11-(3-dimethlaminoprpylidene)-6, II-dihdrodibenz [b,e] oxepin-2-acetic acid, or a pharmaceutically acceptable salt thereof
active ingredient patent
- useful
- novel
- non-obvious
- sufficiently described/enabled
requirements for patent
product has a defined use
useful (patent requirement)
intellectual property hasn’t been patented before
novel (patent requirement)
- The invention cannot be an obvious variation of what is already known
- Problem: everything seems obvious in hindsight
- in the patent context, obviousness requires not only that a claimed invention was obvious to try, but also that it would have been obvious to succeed
non-obvious (patent requirement)
- Invention must be described “in such full, clear, concise, and exact terms as to enable any person skilled in the art…to make and use it.”
- must allow others to duplicate invention
- demonstrates inventor is in full possession of the invention when application is filed
- usually too complicated to know at filing for biologics
sufficiently described/enabled (patent requirement)
Firms often file additional patents related to ______ of the drug and manufacturing processes. ex: HIV/AIDs filed 108 patents
clinical uses
do patents give drug companies a monopoly?
sort of, they’re not perfect
patents provide a _______ on a compound, not a monopoly on treating a health condition
temporary monopoly
why are patents not perfect?
alternative treatment choices, competition with other patent-protected molecules, international enforcement doesn’t always happen
- applies to small-molecule drugs, not biologics
- general clinical trials are not required for generics, didn’t need to pay for “discovery”
- generics can challenge patents in court (court decides validity, not FDA or patent office)
- market exclusivity (5 years) provide protection to branding firms that is independent of patents
hatch-taxman act (1984)
- patent restoration
- patent extension
- market exclusivity
HW positives for branded firms
branded drugs get up to 5 years’ patent restoration for time spent in clinical trials and under FDA review (default 20 years)
patent restoration
0.5-year patent extension for testing drug on children
patent extension
5 years of exclusivity - no ANDA can be approved in first 5 years (7.5 years with 30-month stay to resolve patent disputes)
market exclusivity
- generic exclusivity
- ANDA
- bioequivalence research
HW negatives for branded firms
180-day exclusivity (very lucrative) for first generic firm that files a successful Paragrah IV challenge; on-brand still sold
generic exclusivity
generic firms submit abbreviated new drug applications (ANDAs); sufficient to prove bioequivalence to an existing drug
ANDA
Can do bioequivalence research before patents expire w/o violating patents; generics can start selling right when patent ends
bioequivalence research
The rate and extent of absorption of the test drug are not significantly different from that of the reference product when administered under similar experimental conditions
bioequivalence
- 2000: patent filed; 20-year AI patent filed in January 2000
- 2004-2010: clinical trials
- 2010-2012: FDA Review
- 2012-2025.5: 13.5 years with patent
- Nominal (best case scenario) patent life: 8 years remaining on original AI patent + 5.5 year extension due to HW = 13.5
patent restoration due to HW act
extends key patent for one-half of time drug was in clinical trials (3 years) + whole time drug was under FDA review (2 years), up to max of 5 years, plus 6 months for pediatric dosing study
HW act patent life
- FDA will not approve an ANDA
- unrelated to patents; a drug can be protected by both, one, or neither
market exclusivity
5 years from date of FDA approval
5.5 years if they do a pediatric dosing study
7.5 years if they are subject to a paragraph IV challenge (allows challenge to be resolved in court and avoids generics constantly entering/leaving)
length of market exclusivity
Generic Companies May Try to enter between 7.5-year (effective) exclusivity and patent expiration date(s)
paragraph IV challenge
- The required information relating to such patent has not been filed
- The patent has expired
- The patent will expire on a particular date
- Such patent is invalid or will not be infringed by the drug for which the generic company is seeking approval to market (Paragraph IV)
ANDA litigation requirement
- filing paragraph IV certification
- files patent infringement
- FDA approval
- Generic launch
paragraph IV challenge
A generic company filing this certification must give notice to the patent owner and the NDA holder
paragraph IV certification
If the patent owner files this the FDA will not approve the generic drug for 30 months (unless the court reaches a decision earlier in the patent infringement case, which is unlikely)
patent infringement
After 30 months, the FDA may approve the generic drug even if the patent infringement case is still pending (but a generic that launces may pay triple damages)
ANDA litigation FDA approval
If the generic company wins the lawsuit, the first-filer generic can launch and receives 180 days’ generic exclusivity, after which other generic firms may enter
generic launch
- Patented invention is not new; it had already been invented by someone else
- Patented invention is obvious to an expert in the field
- Patented invention does not have a useful purpose
- Patent did not describe the invention in sufficient detail
patent overturned (paragraph IV challenge)
- new indication market exclusivity
- orphan drug act (1983)
factors affecting generic entry
Branded firm received an additional 3 years of exclusivity if an already-approved drug (a new chemical entity, or NCE) is approved for a new indication
new indication market exclusivity
Provides 7 years of exclusivity (instead of 5) for drugs that address a rare disease (fewer than 200,000 patients in the US)
orphan drug act (1983)
- 80% of drugs are challenged
- generic firms are filing sooner and are stronger against drugs with high sales
paragraph IV trends
- Patent overturned: generic gets 180 days of exclusivity (duopoly with brand)
- Patent upheld: no reward for generic, brand gets full patent life and 7.5 years of market exclusivity (IV wins)
- Settlement, a.k.a. “Pay for Delay” (Lawsuit over - Branded settles with generic)
paragraph IV possible outcomes
- revenue loss after generic entry
- often settle the lawsuit
- may agree to let generic enter before patent expiration and not to launch its own “authorized” generic
- authorized generic
branded firms strategic behavior when being challenged
Branded firm splits profits with a separate generic firm so there are 3 drugs on the market in the first 180 days: branded, ANDA generic first-filer, and __________
authorized generic
- Settlement: brand firm pays the generic firm to delay its entry to six months before patent expires
- allows branded firm to enjoy monopoly and patent isn’t overturned
- generic accepts $ and still gets a six-month duopoly reward
“pay-for-delay”
- AI patents: 17 generic loss, 2 generic wins, 18 “pay-for-delay”
- all other patents: 10 generic loss, 41 generic wins, 34 “pay-for-delay”
litigation for blockbuster brands
- Time between drug approval and expiration of LAST patent (13.5 years in previous example; longer if additional patents are filed)
- Average in sample: 15.9 years
nominal patent life
- Time between drug approval and actual approval of the first bioequivalent generic drug
- Average in sample: 12.5 years
- Paragraph IV patent challenges by generic firms reduce about 3.5 years
- Increase in patent challenges by generic firms has offset increasing tendency by branded firms to file many patents beyond the initial AI patent (i.e., “evergreening” or creating a “patent thicket”
effective market life
- Development time restoration: Restores up to 5.5 years of development time to one patent
- Market monopoly: At least 7.5 years of “monopoly” due to exclusivity
- Longer market life: Longer time for most drugs, and 12.5 years on average
- Generic competition: Most drugs will face generic competition eventually
HW act conclusion
Biologic drug for anemia associated with renal failure or due to a side effect from chemotherapy treatment or cancer that had no generic version when patent expired
Epogen
why did Epogen not have a generic version?
a competitor would have had to manufacture its own version of Epogen and test it in phase 1-3 trials - HW act wasn’t effective yet
biologics are much more complex and it may be unsafe to allow pharmacists to substitute and bioequivalence is hard to prove
HW act and biologics
- created biosimilar pathway
- Biologic patent length: biologics will have a minimum of 12 years of market exclusivity (vs. 7.5 years for small-molecule drugs)
- Justification: biologic patents are not as strong; Easier for companies to “design around: a biologic’s patent because often there is no active ingredient patent
- If HW provisions applied, generic biologics might consistently enter after 7.5 years, reducing incentives for firms to invest in biologic R&D
biologics price competition and innovation act (BPCIA) 2009
- protect manufacturing/method of use
- Easier for companies to “design around” a biologic’s patent because often there is no active ingredient patent
- Consequence: many biosimilars obtain FDA approval first, but then enter litigation over whether the biologic’s patents are infringed
- FDA has approved 42 biosimilars, but ~25 have launched, the remainder are still in patent litigation
biologic patent
- Bioequivalent to reference brand (AB-rated)
- Interchangeable in FDA’s eyes
- Pharmacist substitution allowed (and mandated) in most states
generics similarity/interchangeability
$5M - low hurdle for FDA approval (bioequivalence)
generic cost and development/approval
- Can be structurally different
- Potential differences in efficacy and safety
- Not necessarily interchangeable
- Pharmacist substitution usually not allowed (if not interchangeable)
bio similar similarity/interchangeability
up to $300M - Higher hurdle for FDA approval; analytical studies, animal studies, and clinical studies usually required
biosimilar cost of development and approval
- Interchangeability can be shown in an initial biosimilar application or in supplement
- Standard: the biosimilar “can be expected to produce the same clinical result as the references product in any given patient”
- Additional standard if the product is to be administered more than once to a patient:
- The “risk in terms of safety or diminished efficacy or alternating or switching” between the products is “not greater than the risk of using the reference product without such alteration or switch”
biosimilar requirements for FDA
- If not interchangeable, pharmacists can not automatically substitute the biosimilar, and physicians need to prescribe the biosimilar by name
- Biosimilars won’t always be viewed as a close substitute to the original drug in the eyes of physicians and patients
- starting to get a substantial market share
substitution
Biosimilars will have to market themselves; can’t rely on pharmacist to automatically substitute
biosimilar marketing
True or false: Branded biotech companies are much more likely to compete on price vs. small-molecule generic situation
true
protect branded drugs from having to compete with generics for at least 7.5 years. This allows branded companies to set a high price and make profits to offset the high R&D costs
patents and market exclusivity
This law made it easier for generic drugs to enter the market but essentially guaranteed at least 7.5 years of market exclusivity for the branded drug
hatch-waxman act
many generics firms enter, the market share and sales of the branded drug fall quickly, and patients and health insurers save money
patent expiration
just recently started capturing substantial market share offering substantial price savings, but nowhere near the small-molecule experience
biosimilar approvals
90% of all prescriptions are now filled with a generic drug
transition to generics
- 54% commercial private insurance (all have drug coverage)
- 19% medicare (most have private drug coverage)
- 19% medicaid (all have drug coverage; most private)
- 8% uninsured
source of health insurance in US
drug benefit offered by private health insurers, the government can’t negotiate prices directly with pharmaceutical firms (until 2026)
- 86% of enrollees opt for coverage because it’s heavily subsidized
- average beneficiary’s premium is $34/month
medicare prescription drug coverage (part D)
will allow government to negotiate some drug prices
inflation reduction act (2026)
- determine which drugs to cover
- create a formulary: how much should patients pay for each drug?
- promote the use of cost-effective, high-value drugs
insurers or pharmacy benefit manager (PBM) manage pharmaceuticals
- employer pays a premium each month to health insurer/PBM
- enrollee pays a premium each month and a co-pay when filling a prescription to health insurer/PBM
- health insurer/PBM pays pharmacy when enrollee files a prescription
- pharmacy pays a wholesaler/distributor who sends $ to drug firms
funding flow to drug firms
profits = premiums X enrollment - (quantity of health care X price of health care) - admin costs
health insurers’ profit function
- generous benefits
- cover lots of prescription drugs at loc co-pays
- low quantity or low price to offer low premiums and gain market share
health insurers’ profit
make eligible for reimbursement
cover
patient’s contribution for medical service
co-pay
charge high co-pays for some expensive drugs
quantity
convince drug firms to offer discounts
price
- cover/no cover
- co-pay
- discounts
- utilization management
health insurer profit strategies
- insurers will subcontract
- these people set the formulary, copay tiering, discounts, and utilization management, but insurer still is the payer for the prescription
- often paid for this service as a % of discounts; “I will bring you big discounts so it is a win-win, but if they are maximizing discounts then insurer is minimizing total payment
- most use a vertical integration
insurance sometimes uses a pharmacy benefit manager
before possible discounts/rebates to the payer
list prices
do more effective drugs have a higher or lower price?
higher
formulary, or covered drugs
health insurance drug list
- pharmacy and therapeutics committee looks at clinical data
- cost review so best medicines are affordable
- choose drugs that are safe, work well, and offer best value
- form tiered drug list
health insurance drug list
encourage use of less expensive drugs and foster discounts
tiered co-payment
some people are willing to pay for branded drug so insurance will offer an option that is a middle-ground for these people or those that would benefit significantly
branded preferred drug
- health benefits
- some patients are less likely to need expensive surgery
- some people won’t sign up if this drug is too expensive
- pharma firm cutting the drug price behind the scenes
motivation for offering a branded preferred drug
health insurers receive these from pharma firm when they make a drug relatively inexpensive to a patient
discounts/rebates
why do pharma firms offer discounts/rebates?
to get their drug on a lower co-pay tier
who receives the most discounts? private insurance, medicare part D, or medicaid?
medicaid
- a higher co-pay tier implies low quantity
- will offer a discount and their drug will be moved to lower tier
- a lower tier produces increased quantity (would be even more if there were 3-4 close branded, patent-protected substitutes)
pharma motivation for discounts
- may specify tier placement and price, or a menu of quantities and prices
- drug firms may discount their product to be places on the 2nd formulary tier rather than the 3rd (to be less expensive to patient)
contracts between drug firms and insurers
- insurer tries to align patient’s incentives with the insurer’s profit incentives
- patient saves money when insurer saves money
- great deal on generics; patient should try these first
- patients can be assured that if they need a stronger medication, there is a branded one that isn’t too expensive so should still enroll in plan
insurance formulary
“We are going to be pitting you all against each other. Who is going to give us the best price? If you give us the best price, we will move market share to you. We will move it effectively. We’ll exclude the other products (I.e. or competitors will be on 3rd tier)
PBM negotiation process
what types of drugs should firms generally not offer discounts (or offer small ones) to an insurer?
orphan druges or any drug without generic competitors
- if drug reduces medical costs (e.g. hospitalizations), insurer will want to ensure pt takes it - drug firm won’t have to offer discount
- if those averted medical costs happen in the future, the current insurer may not care
- if drug has large value to a pt with no close substitutes, drug firm will not have to offer a discount - insurer will have to cover to ensure enrollment
factors affecting coverage decision and size of discount
- health insurers have responded to prices increases by making tier differences larger to get larger discounts
- PBM are increasingly excluding drugs altogether from the formulary to pit firms against one another to get max discount
- result: average price discount/rebate offered has grown over time
trend in discounts
media focuses on changes in invoice/list (WAC) prices, but gap between list and net prices reveals…
hidden discounts
who has been winning the battle between insurers and pharma firms?
health insurers
aims to eliminate “low-value” care and strengthens health insurers’ bargaining position vs. pharma ex. prior authorization or step therapy
utiliization management
a pt’s physician must justify use of a drug. could be implemented for certain indications (e.g., off-label) or certain types of patients (e.g. healthier ones, less likely to benefit)
prior authorization
require a pt to start on a less expensive drug, then shift to a more expensive one if the first drug does not work
step therapy
why do pharma firms sometimes offer larger discounts
discourage health insurers from imposing prior authorization and step therapy
why does medicaid pay the lowers drug prices?
because it covers low-income people and government uses its “muscle”
80 million low-income and disabled people in the US and pt face very small drug co-payments, so there is little incentive for them to use inexpensive drugs
medicaid coverage and co-payment
1990 law (amended by 2010 ACA): for patent-protected drugs, the federal government requires pharmaceutical firms to…
discount drug prices and offer low medicaid prices
1990 law (amended by 2010 ACA): offer a 23% discount on drug’s average net price across all customers (including discounts offered)
discount drug prices
1990 law (amended by 2010 ACA); offer medicaid the lowest prices the firm offers to any US customer
offer low medicaid prices
What do coupons do?
force insurers who place drugs on high tier to put drug on lower tier; messes up tier co-pay
- co-pay coupons break formulary
- high co-pays no longer keep quantity low
- Ex, coupon increased quantity by 60% compared to no coupounds
- used during patent-protect period to evade discounts and used during generic competition to keep some people from switching
drug firm counterstrategy
disallowed in medicare, medicaid, and Massachusetts
co-pay coupons
good PR for drug firms and popular among patients
patient assistance programs
