Featured this week in the Wall Street Journal, columnist Greg Ip discusses how reducing regulatory hurdles to private investment can help boost innovation – specifically as it relates to the biopharmaceutical industry.
One of the biggest challenges facing drug manufacturers “is the staggering cost of development: $2.6 billion on average to bring a new drug to market, once the cost of capital and failed drugs is included, according to Tufts University’s Center for the Study of Drug Development. Between 1989 and 2011 the cost per patient of a clinical trial more than doubled, after inflation, according to one study.”
Let’s not forget: when you consider the larger biomedical innovation ecosystem, 90% of drug development programs fail. Small companies are at the forefront of cutting-edge, clinical trials for innovative new medicines, yet because they rely so heavily on private investment capital, they are the most susceptible to public policy changes that could harm investment incentives.
Thanks to world-class scientists and savvy entrepreneurs, the U.S. has investors willing to commit the capital needed to fund medical innovation because of groundbreaking advances in bioscience. But the truth is, this process is risky and expensive.
“There are things you need to do as part of product development that 15 years ago you didn’t need,” Scott Gottlieb, Food and Drug Administration Commissioner explains.
Citing a Tufts study, Gottlieb adds that between 1999 and 2005, the number of procedures performed on a patient in a clinical trial rose 65%.
“That, he says, is appropriate if it means drugs are more likely to be safe and effective. But he believes those costs can be cut without sacrificing safety. “Everyone thinks if the clinical trial takes two years instead of three, the product is less safe. And that’s just not true.
“He wants the FDA to help drug developers narrow the information they must submit for preclinical trials, reducing the capital needed at the riskiest stage of development.”
Read the full article in the Wall Street Journal here.