The distribution of sales revenues from pharmaceutical innovation.

OBJECTIVE: This report updates our earlier work on the returns to pharmaceutical research and development (R&D) in the US (1980 to 1984), which showed that the returns distributions are highly skewed. It evaluates a more recent cohort of new drug introductions in the US (1988 to 1992) and examines how the returns distribution is emerging for drugs with life cycles concentrated in the 1990s versus the 1980s. DESIGN AND SETTING: Methods were described in detail in our earlier reports. The current sample included 110 new drug entities (including 28 orphan drugs), and sales data were obtained for the period 1988 to 1998, which represented between 7 and 11 years of sales for the drugs included. 20 years was chosen as the expected market life for this cohort, and a 2-step procedure was used to project future sales for the drugs--during the period until patent expiry and then beyond patent expiry until the 20-year time-horizon was completed. Thus, the values in the first half of the life cycle are essentially based on realised sales, while those in the second half are projected using information on patent expiry and other inputs. MAIN OUTCOME MEASURES AND RESULTS: Peak annual sales for the top decile of drugs introduced between 1988 and 1992 in the US amounted to almost $US1.1 billion compared with peak sales of less than $US175 million (1992 values) for the mean compound. In particular, the top decile accounted for 56% of overall sales revenue. Although the sales distributions were skewed in both our earlier and current analysis, the top decile in the later time-period exhibited more rapid rates of growth after launch, a peak that was more than 50% greater in real terms than for the 1980 to 1984 cohort, and a faster rate of expected decline in sales after patent expiry. One factor contributing to the distribution of sales revenues becoming more skewed over time is the orphan drug phenomenon (i.e. most of the orphan drugs are concentrated at the bottom of the distribution). CONCLUSION: The distribution of sales revenues for new drug compounds is highly skewed in nature. In this regard, the top decile of new drugs accounts for more than half of the total sales generated by the 1988 to 1992 cohort analysed. Furthermore, the distribution of sales revenues for this cohort is more skewed than that of the 1980 to 1984 cohort we analysed in previous research.

The role of cost-effectiveness analysis in managed-care decisions.

This article considers the role of cost-effectiveness studies in the formulary and disease-state management decisions of managed-care entities. In a recently published symposium volume [Soc Sci Med 1997; 45 (4): 505-647], US managed-care entities were found to be among the leaders in applying cost-effectiveness studies to healthcare decisions. At the same time, a number of barriers were identified that hinder their wider usage in the managed-care sector. These factors are analysed in this paper along with the prospects for future changes. The potential roles for government policy in this area are also discussed in the final section of the article.

Planning and simulation of medical robot tasks.

Complex techniques for planning and performing surgery revolutionize medical interventions. In former times preoperative planning of interventions usually took place in the surgeons mind. Today's new computer techniques allow the surgeon to discuss various operation methods for a patient and to visualize them three-dimensionally. The use of computer assisted surgical planning helps to get better results of a treatment and supports the surgeon before and during the surgical intervention. In this paper we are presenting our planning and simulation system for operations in maxillo-facial surgery. All phases of a surgical intervention are supported. Chapter 1 gives a description of the medical motivation for our planning system and its environment. In Chapter 2 the basic components are presented. The planning system is depicted in Chapter 3 and a simulation of a robot assisted surgery can be found in Chapter 4. Chapter 5 concludes the paper and gives a survey about our future work.

Generating finite element models from volumetric medical images.

For planning and simulating of surgical interventions geometric models have to be generated from medical images. In this paper, we will present a new method for generating finite element meshes from volumetric images. The method is designed to capture even very small anatomic structures, while the mesh density can be controlled and locally increased.

Pharmacy benefit management, cost-effectiveness analysis and drug formulary decisions.

Pharmacy benefit management companies (PBMs) have evolved over the past decade in response to the increased demand for health care cost containment. Their activities include the implementation of drug formularies and the negotiation of rebates from manufacturers. Our analysis of this industry is based on interviews and materials provided by the top five ranked PBM companies which account for over 80% of beneficiaries covered within formulary plans. The formularies of these companies are relatively inclusive, but they are becoming more restrictive over time. At present the use of cost-effectiveness (C-E) studies in the formulary decisions of PBMs has been limited. In this regard, the surveyed PBMs emphasized that most C-E studies have not compared therapeutic substitutes in populations with characteristics that are similar to those of their clients. Pharmacy benefit management companies also have had strong incentives to focus narrowly on drug costs because they typically manage drug benefits on a "carved-out" basis. However, PBMs anticipate a growing future role in the integrated management of patient care (disease management) for certain high cost chronic diseases and conditions. All of the leading firms we surveyed have disease management programs in development. The importance of C-E studies to PBM decisions is expected to increase significantly as disease management programs are implemented. The data infrastructure inherent to the PBM industry and the increasing number of employees with advanced training in pharmacoeconomics will permit firms to perform their own internal C-E studies. They are also establishing various alliances and joint ventures with drug manufacturers, health maintenance organizations, and academic institutions to perform these analyses. The leading PBMs tend to favor active participation in the development of methodological approaches to C-E studies over government regulations such as those proposed by the FDA in 1995.

The effect of pharmacoeconomics on company research and development decisions.

There is a strong rationale for integrating pharmacoeconomics into research and development (R&D) project selection and termination decisions. The average cost for the typical new drug introduction now exceeds $US300 million. Furthermore, a growing proportion of phase III projects are terminated because of economic factors relative to efficacy and safety concerns. While the use of pharmacoeconomic studies by payers is still evolving, the pressures on firms to show that new products are cost effective will only intensify in future periods. Accordingly, it is important for firms to begin analysing the cost effectiveness of new drug candidates early in the R&D process. The cost effectiveness of a new therapy can be simulated prior to clinical testing using different assumptions about the efficacy, tolerability, pricing and formulation of the new therapy. These models can be refined and updated as data become available from clinical testing and other sources. A key objective is to make uncompetitive projects fail sooner while channelling development resources to projects with high expected returns. Cost-effectiveness analysis should be an integral component of the firms's strategic action plan and its return on investment analyses.

Avaliaçåo da eficácia, tolerabilidade e segurança da sertalina (50 mg a 200 mg) durante 8 semanas no tratamento de 150 pacientes ambulatoriais com depressåo maior / Evaluation of effectiveness, tolerance and safety of sertraline (50 mg to 200 mg) during 8 weeks in the treatment of 150 patients outpatients with major depression

Os resultados de um estudo multicêntrico, aberto e nåo comparativo, no qual foram avalaiados 150 pacientes com diagnóstico de depressåo maior de acordo com os critérios da DSM-III-R, såo relatados. Os pacientes selecionados foram inicialmente submetidos a um período simples-cego, durante 2 semanas. Após essa fase, aqueles que preenchiam os critérios de inclusåo e exclusåo iniciaram o tratamento com sertralina 50mg/dia que poderia ser aumentada gradualmente até 200mg/dia, incrementos de 50mg, e intervalos de no mínimo 2 semanas, caso a resposta ao tratamento fosse insatisfatória, segundo a avaliaçåo do investigador. O tratamento com sertalina mostrou-se altamente eficaz no alívio da depressåo. como também nos sintomas associados ao quadro depressivo como, ansiedade, transtornos do sono, agitaçåo ou inibiçåo psicomotora, trabalho e atividades, entre outros. Um total de 84,2 por cento dos pacientes responderam satisfatoriamente ao tratamento com sertralina em doses felíveis. Em relaçåo à tolerabilidade, um total de 54 por cento dos pacientes apresentaram algum efeito adverso ao longo do tratamento, porém estes efeitos foram geralmente de intensidade leve ou moderada e apenas 4,6 por cento dos pacientes interromperam o tratamento prematuramente devido à ocorrência de eventos adversos

Longer patents for increased generic competition in the US. The Waxman-Hatch Act after one decade.

The 1984 Waxman-Hatch Act had two main objectives. Title I was designed to promote price competition by establishing an abbreviated new drug application (ANDA) process for generic market entry. Title II was designed to encourage drug innovation by restoring some of the patent life lost during the lengthy FDA regulatory process. In this paper, we consider whether these twin objectives have been realised during the first decade of the Act's existence. First, we investigate the pattern of generic and brand name prices and market shares for the major products whose patents expired between 1984 and 1993. A regression model indicates that generic competition has been intensifying significantly in recent periods. Major brand name products now typically lose more than half their market share within the first year after patent expiration. In addition, we examine changes in patent protection for new chemical entities introduced over the period 1984 to 1993. For 1991 to 1993 new drug introductions, the average effective patent life was 11.8 years with 2.3 years resulting from Waxman-Hatch extensions. In the final section of the paper, we consider how the US law compares with that in Europe and discuss possible legislative improvements in the 1984 Act.

[Bakery goods from irradiated and unirradiated eggs--detection of irradiation in a processed food]. / Backwaren aus bestrahlten und unbestrahlten Eiern--Nachweis der Bestrahlung bei einem weiterverarbeiteten Lebensmittel.

The detection of radiation-specific degradation products in fat has become an established method which has successfully been applied to egg products. This study is making evident the detectability of irradiated eggs as an ingredient of specified processed foods. Tart layers were produced from both irradiated and non-irradiated liquid whole egg. When the fat components were isolated from the tart layers and investigated by GC/MS, the presence of irradiated eggs could clearly be shown. While the radiation-induced hydrocarbons and 2-alkylcyclobutanones could not be found in unirradiated samples, tart layers from irradiated eggs contained these substances. Especially for the hydrocarbons a satisfying correlation between radiation dose and concentration could be observed. The concentrations of radiation-induced compounds were generally lower in the tart layers than in the liquid egg samples they had been produced from.

Research and development costs for new drugs by therapeutic category. A study of the US pharmaceutical industry.

The clinical period (i.e. clinical trial and long term animal testing) development costs of a random sample of new chemical entities (NCEs) were examined for differences in average cost. All of the NCEs studied were first tested in humans between 1970 and 1982, and were classified for the purposes of the study by therapeutic class. The costs of unsuccessful projects were included with those of projects that resulted in US marketing approval. Including income forgone from expending funds before returns are earned ('time costs'), the capitalised (i.e. out-of-pocket plus time) clinical period costs per approved NCE were $US70, $US98, $US103 and $US163 million (1993 dollars) for anti-infective, cardiovascular, neuropharmacological and nonsteroidal anti-inflammatory drugs, respectively. Combining the data for all therapeutic categories, the mean clinical period cost per approved NCE was $US93 million. Omitting costs associated with unsuccessful projects, the mean capitalised clinical period costs for approved NCEs ranged from $US7.1 million (for topical steroids) to $US66.7 million (for cardiovascular agents) [1993 dollars]. The estimates of total clinical period costs per approved NCE depend on average out-of-pocket clinical phase costs, attrition rates across phases (i.e. the rates at which compounds drop out of active testing), the probability of marketing approval, and development and regulatory review times. Phase attrition and approval rates are the most important sources of variability in total clinical period costs between therapeutic categories. Development cost estimates by therapeutic category did not correlate strongly with US sales in the fifth year of marketing. Cardiovascular NCEs had much higher than average sales revenues, but clinical development costs for these drugs were only slightly above average. Conversely, nonsteroidal anti-inflammatory drugs attained average sales revenues, but had much higher than average development costs.

Returns to R&D on new drug introductions in the 1980s.

This study finds that the mean IRR for 1980-84 U.S. new drug introductions is 11.1%, and the mean NPV is 22 million (1990 dollars). The distribution of returns is highly skewed. The results are robust to plausible changes in the baseline assumptions. Our work is also compared with a 1993 study by the OTA. Despite some important differences in assumptions, both studies imply that returns for the average NCE are within one percentage point of the industry's cost of capital. This is much less than what is typically observed in analyses based on accounting data.

High level production of human growth hormone in the milk of transgenic mice: the upstream region of the rabbit whey acidic protein (WAP) gene targets transgene expression to the mammary gland.

The 5' flanking region (6.3 kb) of the rabbit WAP (rWAP) gene possesses important regulatory elements. This region was linked to the human growth hormone (hGH) structural gene in order to target transgene expression to the mammary gland. Thirteen lines of transgenic mice were produced. Milk could be collected from six lines of transgenic mice. In five of them, hGH was present in the milk at high concentrations ranging from 4 to 22 mg ml-1. hGH produced by the mammary gland comigrated with hGH of human origin. It was biologically active, and through its prolactin-like activity induced lactogenesis when introduced into mammary culture media. Two of these mouse lines were studied further. hGH mRNA was only detected in the mammary gland during lactation. In the seven other transgenic lines, hGH was present in the blood of cyclic females. The prolactin-like effect of hGH in these mice probably induced female sterility, and milk could therefore not be obtained. In two lines studied in more detail, the mammary gland was the main organ producing hGH, even in cyclic mice. Low ectopic expression was detected in other organs which varied from one line to the other. This was probably due to the influence on the transgene of the site of integration into the mouse genome. In the 13 lines studied, high mammary-specific hGH expression was not correlated to the transgene copy number. The rWAP-hGH construct thus did not behave as an independent unit of transcription. However, it can be concluded that the 6.3 kb flanking region of the rWAP gene contains regulatory elements responsible for the strong mammary-specific expression of hGH transgene, and that it is a good candidate to control high levels of foreign protein gene expression in the mammary gland of lactating transgenic animals.

[Identification of irradiated pasteurized egg products: a combined method for use in routine control]. / Identifizierung bestrahlter pasteurisierter Eiprodukte: Ein kombiniertes Verfahren zum Einsatz in der Routinekontrolle.

Pasteurized egg products (whole egg, egg yolk and egg white) were tested for irradiation treatment in the German food control laboratories in Oldenburg/Niedersachsen and Kassel/Hessen as well as in the food irradiation laboratory of the German federal health office. Gas chromatographic/mass spectrometric measurements on the fat components of egg-products showed clearly whether the product had been irradiated or not. While in unirradiated samples no traces of special hydrocarbons (according to the fatty acid composition of egg) and no traces of the irradiation-specific compound 2-Dodecyl-cyclobutanone were found, irradiated control samples as well as products of two Belgian suppliers contained these substances. Additionally, regarding the rather high time consumption of gas chromatography, electron spin resonance (ESR)-measurements were carried out on the packaging material of egg products. Irradiated packaging material (cellulose) could be easily detected by the appearance of a signal pair in the ESR spectrum (cellulose radical). ESR measurements are very fast and easy to perform so that this method can be used for screening. Microbiological investigations showed remarkably reduced total numbers of microorganisms for some irradiated samples, but the microbiological status is influenced by other factors like storage-time and -temperature, so that microbiological tests can not be used successfully for screening on irradiation treatment.

The effect of Medicaid formularies on the availability of new drugs.

This study expands our previous work on the availability of new drug introductions to poor patients in states in the USA with restrictive Medicaid formularies. In particular, it focuses on the experience of 9 states over the period 1979 to 1985. In these states, a typical new drug took 20 months after FDA approval to gain acceptance onto the Medicaid formulary. New drug introductions were available to Medicaid patients less than 40% of the time during their first 4 years of market life. Restrictions on availability also extended to drugs ranked high in terms of both therapeutic and commercial importance. There was substantial variation observed across states and therapeutic categories. While formularies are prohibited under legislation recently enacted by the US Congress, state governments may attempt to continue to restrict access to expensive new medicines through prior approval systems. This is an issue that warrants future attention and study.

Rabbit whey acidic protein concentration in milk, serum, mammary gland extract, and culture medium.

Rabbit whey acidic protein has been purified from whey using an AcA54 column. The purified whey acidic protein had an amino acid composition in agreement with the previously defined cDNA sequence. An antibody against whey acidic protein was raised in guinea pig. This antibody did not crossreact with mouse or cow milk or with rabbit alpha s1-casein and beta-casein. Whey acidic protein concentration was measured in rabbit milk using the antibody with a radioimmunoassay. The concentration of whey acidic protein in rabbit milk was 15 mg/ml, whereas the concentrations of alpha s1-casein and beta-casein were 16 and 45 mg/ml, respectively. The concentration of the three proteins was also evaluated in culture medium of rabbit primary mammary cells. The three proteins were induced by prolactin alone. Glucocorticoids amplified the prolactin effect on whey acidic protein more intensively than on caseins. The three proteins were present in mammary extract from virgin rabbit. The concentration of these proteins was lower at d 8 and 14 of pregnancy, and it was very high at d 25 of pregnancy. Whey acidic protein was undetectable in blood of virgin, weaned, and midpregnant females and of males. Whey acidic protein was present in blood of lactating rabbits, but alpha s1-casein and beta-casein were not detectably present in rabbit blood at the examined physiological states.

Cost of innovation in the pharmaceutical industry.

The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).