Leen Kawas Details the Factors Behind High Drug Development Costs (and Presents Strategies to Address Them)

In the increasingly complex healthcare realm, a regular flow of drug introductions offers potential benefits to millions of patients. However, the biotech and pharmaceutical companies that develop these therapies do so at great expense. High drug development costs, and a multi-year development cycle, can stress the budgets of even well-capitalized firms.

Biotech expert Leen Kawas discussed the drivers of high drug development costs . She also offered strategies to streamline the process and reduce the strain on the developer’s financial resources.

Leen Kawas’ Proven Drug Development Expertise

Leen Kawas is Propel Bio Partners’ Managing General Partner. This expanding Los Angeles biotech-related venture capital firm supports start-up and early-stage biotechs. These companies typically require financial, operations, and technical assistance. Leen Kawas welcomes pitches from all founders, although she especially encourages women and minorities to apply.

Before co-founding Propel Bio Partners, Leen Kawas excelled as biotech Athira’s Chief Executive Officer (or CEO). She also managed several drug development cycles and oversaw Athira’s September 2020 initial public offering (or IPO).

Overview of the Drug Development Cycle

For perspective, Leen Kawas detailed the multi-phase drug development cycle . Each drug candidate proceeds through this linear process, although actual progression times vary.

Four Drug Development Phases

An average drug candidate takes 10 to 15 years to progress through the development cycle. For every 5,000 compounds that enter the preclinical phase, only five candidates advance into the clinical trials. One candidate from this group may be approved. In 2021, the cost of a completed drug development cycle was estimated at $2.6 billion.

• Phase 1: Discovery and Preclinical Phases: Identification and testing of potential drug compounds. Duration: 1 to 6 years.
• Phase 2: Clinical Trials Phase: Each three-part trial is designed to gauge the drug candidate’s safety and efficacy. Duration: 6 to 7 years total. This is the most expensive drug development phase.
• Phase 3: FDA Review Phase: After clinical trials, the drug developer submits an application for Food and Drug Administration (or FDA) approval. Duration: 0.5 to 2 years. Extensive FDA questions can considerably increase this phase’s costs.
• Phase 4: Post-Market Monitoring: The approved drug is consistently monitored in real-world use scenarios. Depending on the drug type, and the type of monitoring needed, these expenses can vary widely.

4 Factors Driving High Drug Development Costs

The drug development cycle’s high costs cannot be attributed to a single cause. Instead, Leen Kawas noted that four factors are behind this price escalation.

Highly Complex Clinical Trial Environment

The FDA’s existing drug development protocol was not designed for increasingly complex medical treatments. Examples include cell therapy, gene therapy, biologics, and biosimilars. Although the FDA continues to retool its approval criteria, the protocols may still not accommodate these game-changing therapies.

Phase III clinical trials will be especially challenging. These trials are designed to confirm a drug candidate’s safety and efficacy. A drug could potentially fail its Phase III trials because the protocols aren’t designed to accurately evaluate the compound.

Clinical Trial-Related Logistics Costs

Drug candidate testing is a major component of each drug development cycle. That said, trial-related functions can together consume much of the trial budget. Examples include site, operations, administrative, and data collection/analysis expenses.

Patient recruitment and care, along with clinical trial professional support staff, also represent significant costs. For any chance of success, a clinical trial must have clear endpoints and a sufficient budget. Otherwise, the trial won’t be able to generate the quality data needed for regulatory approval.

Clinical Trial Patient Attrition

Successful clinical trials depend on sufficient patient recruitment and retention. However, trial participants often drop out for varied reasons. It’s not uncommon to see a 90 percent attrition rate for a given clinical trial. Replacing these patients can take considerable time and expense.

Multiple Regulatory Agency Standards

The FDA is the most well-known United States regulatory agency. However, several other regulatory bodies also play a role in the drug development cycle. Each agency implements its own strict standards, ostensibly to protect public health. To meet these standards, the drug developer must complete exhaustive (and expensive) testing that typically takes over a decade.

5 Strategies for Reducing High Drug Development Costs

Decreasing high drug development costs requires streamlining the process itself. highlighted five strategies that together can create a more cost-effective drug development cycle.

More Efficient Clinical Trial Operation

Historically, clinical trial inefficiencies have helped escalate drug development costs. Today, the integration of technology-driven processes has delivered positive outcomes in multiple areas. Examples include clinical trial patient recruitment, informed consent acquisition, remote outcome capture, and intervention application.

Integration of AI and Machine Learning

Researchers continue to integrate artificial intelligence (or AI) and machine learning (a type of AI) into pharmaceutical research functions. These technologies are projected to help shorten each drug development cycle. These digital tools can also predict which drug candidates are more likely to be successful.

Reuse of Already-Approved Drugs

Many drugs were originally approved for use in treating specific diseases. Today, AI and machine learning can help identify which approved drugs could successfully treat other conditions.

Collaborative Drug Development

A collaborative drug development approach means two pharmaceutical companies share the process’ risks and costs. For perspective, a major pharmaceutical firm contributes financial and economies of scale advantages. Concurrently, a smaller or virtual firm has fewer constraints, enabling more streamlined innovation.

Together, both entities can position themselves for more efficient drug development. On the manufacturing side, earlier supply chain management integration decreases the odds of production obstacles.

Beneficial Regulatory Reform

If the drug approval cycle is simplified, without negative impacts on safety, significant cost reductions can result. In addition, enhanced (and earlier) collaboration between drug developers and regulatory agencies can smooth out potential roadblocks.

For perspective, during Leen Kawas’ Athira tenure, she excelled in the management of multiple drug development cycles. By regarding the Food and Drug Administration (or FDA) as a collaborator rather than an adversary, she was able to move forward with fewer roadblocks.

Decentralized Clinical Trials’ Growing Significance

In 2024, decentralized clinical trials (or DCTs) are increasingly becoming a way to reduce (or even eliminate) patient trial site visits. Instead, patients can submit their data at a nearby healthcare facility or via digital health technologies.

Not surprisingly, fewer trial site visits result in reduced clinical trial costs and logistical headaches. Patients also prefer the more convenient DCT protocol, perhaps resulting in reduced attrition rates.

Leen Kawas noted that approximately half of biopharmaceutical clinical trials will likely be partially or totally decentralized by 2024. This significant trend is due to higher data integrity and regulatory communication advancements. Cost savings and patient preferences will likely magnify the DCT trend.

*The San Francisco Weekly newsroom and editorial were not involved in the creation of this content.

Originally published at https://www.sfweekly.com on November 13, 2024.