Children's Drug Trial Program Gives Boost to Medicine, Profits
Federal initiative helps kids by improving drug makers' bottom line, study finds
TUESDAY, Feb. 6, 2007 (HealthDay News) -- A government program aimed at fostering clinical trials into the safety and effectiveness of medicines for children is doing just that, new research shows, but it's also generating millions of dollars in profits for the makers of some popular drugs.
The Pediatric Exclusivity Program began in 1997 and allows companies that conduct pediatric trials to extend their patent on the medication being studied for an additional six months. It has so far resulted in more than 300 pediatric drug studies that have led to about 115 labeling changes to medicines, experts say.
The theory behind the program, which is set to expire in 2007, was that the added time under patent protection would help drug manufacturers recoup the cost of conducting clinical trials in children.
Many companies have recouped those losses and amassed hefty additional profits, to boot, say researchers reporting in the Feb. 7 issue of the Journal of the American Medical Association.
After completing an economic analysis of nine drugs granted exclusivity status under the initiative, researchers found that "the return [on investment] was highly variable. We found some companies making windfall profits, but it's not uniformly lucrative," said the study's lead author, Dr. Jennifer Li, an associate professor of pediatrics at the Duke Clinical Research Institute in Durham, N.C.
According to Li, some critics contend the program will become too costly now that the government is paying for some prescription drug costs under Medicare Part D. Critics have also suggested that additional profits should be kept in line with the costs of the pediatric studies.
To better assess the true costs of the exclusivity program, Li and her colleagues selected nine drugs granted six months of additional exclusivity between 2002 and 2004 for the current study.
Overall, during that time period, 59 medications were granted exclusivity, and 137 pediatric clinical trials were completed. Almost 23,000 children were included in these trials. About 20 percent of these medications were considered "blockbusters," meaning that they had more than $1 billion annually in sales for both adults and children.
Of the nine selected for this study, five were considered blockbuster drugs. The nine categories of selected medications included drugs for depression and generalized anxiety disorder, high blood pressure, asthma and allergy, osteogenesis imperfecta, bacterial infection, gastroesophageal reflux (GERD), type 2 diabetes, attention-deficit hyperactivity disorder and a medication used on difficult-to-treat tumors.
The average cost or "cash outflow" needed for the pediatric studies was $10.4 million, the researchers said. But, with the additional six months of exclusivity, the economic benefit to the drug manufacturer was an average $134 million, according to the study.
Li and her colleagues said the results will be more heavily weighted to products with a higher expected rate of return. For example, one product, a medication used to treat bacterial infections, actually lost almost $9 million in sales, even with the additional six months' of exclusivity.
"From the policy perspective, our study shows that the Pediatric Exclusivity Program overcompensates blockbuster products for performing clinical trials in children, while other products have more modest returns on investment under this program," the researchers wrote.
However, if the program were changed to only provide just three months of exclusivity, the authors suggest that many pediatric clinical trials would not be done, because most of these trials have only a small profit margin.
So, "from my perspective as a parent and a pediatrician, this is a very successful program," Li said. "We need to be able to offer safe medications to children, and prior to the institution of this program, hardly any pediatric studies were done."
Tina Hatzopoulos, administrator of pharmacy services at Children's Memorial Hospital in Chicago, agreed with Li that the exclusivity program is, overall, a successful one.
"I'm in favor of keeping the six month provision for drug companies. There has to be an incentive for companies to test these drugs in a pediatric population," she said. "To do studies in children is very expensive. Children have changing body functions as they grow. What works in a 3-year-old might not work in a 7-year-old."
She pointed out that about 20 percent of pediatric trials of adult medications found that the drugs simply weren't effective in children. "The saving associated with that is huge," both economically and in terms avoiding potentially dangerous side effects, Hatzopoulos said.
And, in cases where medications are found not to be effective in children, drug companies stand to lose a tremendous amount of money, she added, so they really need to be compensated somehow for taking that risk.
"There has to be some balance," Hatzopoulos said.
To read more about pediatric drug research, visit the U.S. Food and Drug Administration.