Economic Return of Clinical Trials Performed Under the Pediatric Exclusivity Program

Abstract

Context In 1997, Congress authorized the US Food and Drug Administration (FDA) to grant 6-month extensions of marketing rights through the Pediatric Exclusivity Program if industry sponsors complete FDA-requested pediatric trials. The program has been praised for creating incentives for studies in children and has been criticized as a "windfall" to the innovator drug industry. This critique has been a substantial part of congressional debate on the program, which is due to expire in 2007. Objective To quantify the economic return to industry for completing pediatric exclusivity trials. Design and Setting A cohort study of programs conducted for pediatric exclusivity. Nine drugs that were granted pediatric exclusivity were selected. From the final study reports submitted to the FDA (2002-2004), key elements of the clinical trial design and study operations were obtained, and the cost of performing each study was estimated and converted into estimates of after-tax cash outflows. Three-year market sales were obtained and converted into estimates of after-tax cash inflows based on 6 months of additional market protection. Net economic return (cash inflows minus outflows) and net return-to-costs ratio (net economic return divided by cash outflows) for each product were then calculated. Main Outcome Measures Net economic return and net return-to-cost ratio. Results The indications studied reflect a broad representation of the program: asthma, tumors, attention-deficit/hyperactivity disorder, hypertension, depression/ generalized anxiety disorder, diabetes mellitus, gastroesophageal reflux, bacterial infection, and bone mineralization. The distribution of net economic return for 6 months of exclusivity varied substantially among products (net economic return ranged from −$8.9 million to $507.9 million and net return-to-cost ratio ranged from −0.68 to 73.63). Conclusions The economic return for pediatric exclusivity is variable. As an incentive to complete much-needed clinical trials in children, pediatric exclusivity can generate lucrative returns or produce more modest returns on investment.

Clinical trials in children

“…Both regulations have mandatory requirements with an incentive of a 6 month extension of patent protection to encourage the pharmaceutical industry to conduct paediatric trials. These incentives resulted in Clinical trials in children an increase in the number of in paediatric trials [136][137][138]. By March 2008, more than 49 000 children were enrolled in trials and the FDA had granted exclusivity to 150 medicines and granted requests for 842 studies which were mostly for new indications of existing medicines [134].…”

Recommendations to Enhance Pediatric Cardiovascular Drug Development: Report of a Multi‐Stakeholder Think Tank

“…This was demonstrated by Li et al in an analysis of costs associated with studies conducted for pediatric exclusivity. In this 2007 report, the cost of conducting trials for pediatric exclusivity for a single agent ranged from $5278 408 to $49 641 232, and the net economic return (ie, estimated patent extension benefits minus trial costs) ranged from ‐$8946 033 to $242 403 765, depending on total sales 56. Thus, a “blockbuster” drug has a significantly greater potential financial incentive, while drugs that are effective in adults but have significantly smaller profit margins may have trial costs that outweigh potential benefits.…”

Medicines for children: Rationale and recent advances

“…The reward/incentive in this case where the medicine is still under intellectual property protection is chiefly a 6-month patent protection which is of great benefit to industry in terms of profit and reputation. For off-patent medicines which are not under intellectual property protection providing paediatric data is voluntary: data protection and some form of public funding for studies are offered as incentives [20,21,22,23,24,25,26,27].…”