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not develop specific products if they perceive themselves as trailing another company, only to see the front runner falter somewhere down the road [81]. |
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There may be a shift from R & D on chronic disease drugs to acute therapies that typically have a shorter time line for new product development [85]. Passage of a Health Care Reform Act that would rachet down prices on therapies for Medicare patients could further divert R & D funds from chronic conditions that affect the elderly to those that are more predictable in terms of market success. At the same time few companies will invest in orphan drugs if projected costs are too high. |
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Phase IIIB studies are larger, or specialized, studies that concentrate on expanded populations and/or involve comparative studies with competitive products. These studies are conducted after NDA submission and are designed to provide supplemental information. We will continue to see pharmaceutical companies conducting more of these studies to obtain cost-effectiveness and product-comparison data as they vie for lean and restricted formularies. However, a trend is developing for inclusion of pharmacoeconomic and outcome analysis earlier than Phase III clinical trials or postmarketing. Today, some companies are conducting these studies prior to proceeding into expanded clinical trials. Because of the need to provide more information earlier to venture capital firms and investment companies, there is particular pressure to move these outcomes and cost-effectiveness studies earlier in the process for biotech development [88]. In the future, these trials will be undertaken in Phase II or even Phase I. However, this may actually inhibit new drug development, with the inherent risk of missing an opportunity. It is extremely difficult to evaluate the pharmacoeconomics of a drug in the artificial environment and economics of early clinical trials. The drug's pharmacoeconomic profile may be quite different after it has been used for some time in the market. |
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The proposed Health Security Act had a chilling effect on the pharmaceutical and venture capital dependent biotechnology industry. The Standard & Poor Drug Index of pharmaceutical stocks lost 22% of its value in 1992 and declined by an annual rate of 25% in 1993 [97]. Similarly, the American Biotech Index lost 32% of its value, initial public offerings decreased, and the actual number of companies declined. The result on new drug development was a decrease in the number of NMEs, biotech, and biologic drugs submitted to the FDA for approval [98]. In 1994, the number of significant biologics cleared by the Center for Biologics Evaluation and Research dropped to 15 from 23. In fact, the FDA has commissioned a study to examine the trend of declining biologics submissions [68]. Biotech R & D has been the first victim of health care reform. |
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Increased regulatory stringency for new drug approval has increased the cost of R & D per NME. This has reduced the expected rate of R & D return and, therefore, the level of investment. Decades of regulatory creep have in- |
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