Mandated Phase 3 randomized double-blind clinical trials cost many millions of dollars each, and most of the trials fail. To fund all the trials that fail and the few that succeed, the few new drugs that succeed need to have high price tags. The only other way for new drug development to be economically sustainable, is to stop mandating Phase 3 clinical trials. If we stopped mandating Phase 3 clinical trials, we would, in other words, allow physicians and patients to try drugs after safety has been shown through Phase 1 and Phase 2 trials, but without the expensive proof of efficacy from Phase 3 trials. We would thereby allow physicians and patients greater freedom.
(p. B6) While many companies, from Pfizer to Bristol-Myers Squibb to Bayer and Novartis, have announced big layoffs, news from a key outsourcer on Wednesday [Aug. 7, 2024] showed that the industry’s cost-cutting ways are intensifying.
Charles River Laboratories International, which provides drug-development services, plunged 12.6% on Wednesday [Aug. 7, 2024], the most in four years, after sounding the alarm over pharma research spending plans. The Massachusetts-based company said it now expects to post a decline in sales for the full year, primarily owing to lower demand from pharma clients. The company previously expected to grow this year. “There are profound cuts at pharmaceutical companies,” James Foster, Charles River’s chief executive officer, told analysts. Foster called the reduction in pharma research spending “unusual” and “sudden.”
Foster said his clients are blaming the cuts on the Inflation Reduction Act, which allows Medicare to negotiate some drug prices directly with manufacturers, and a looming patent cliff, which will see more than $200 billion in annual drug sales come under threat from copycat generics.
For the past few years, pharma companies have been warning that they might need to cut back on innovation as the U.S. government forces some companies to negotiate prices of their top-selling drugs.
. . .
A reduction in preclinical testing, the kind of services that Charles River provides, is the sort of thing that will only be felt in the long term. By that time, current management teams, desperate to lift their stocks now, might be long gone. . . .
Big pharma wants to clean house. Expensive studies of drugs that won’t make it to market for many years to come are an easy target.
For the full commentary see:
(Note: ellipses, and bracketed dates, added.)
(Note: the online version of the commentary has the date August 8, 2024, and has the title “Big Pharma Cuts R&D, Sending Shudders Through Industry.” The quoted paragraph starting with “Foster said” appears in the online, but not the print, version of the commentary.)