Accounting, clinical trial costs

Although atypical antipsychotic agents may cost several times as much as traditional antipsychotics, drug costs in schizophrenia account for only 1-4% of the total treatment cost (Knapp, 1997). The argument then is that a small increase in drug costs— say to 10% of total cost—may result in disproportionate savings in the highly expensive direct hospital costs, if clinical trial... 

The drug discovery and development processes are time consuming and costly endeavors. It has been reported that on average it takes 10 to 15 years and costs more than 800 million to bring a molecule from discovery to market.12 Compounds fail for various reasons. One that accounts for a reported 40% of failures in clinical trials is poor pharmacokinetics.3 In an effort to improve the number of compounds that exhibit optimal absorption, distribution, metabolism, elimination (ADME), and pharmacokinetic (PK) properties and reach development, drug metabolism and pharmacokinetic scientists continually implement new technologies and compound screening approaches. 

Figure 30.1 shows a breakdown of total R D costs per approved drug incurred during the preclinical and clinical R D phases. Expenditures in the clinical period account for roughly 70% of the total out-of-pocket expenditures. This reflects the fact that clinical trials are very expensive on a per patient basis many dmgs must be tested for every one... 

Numerous clinical trials have been done to determine the optimal regimen for H. pylori eradication, but there remains no gold standard of therapy to date. When selecting a regimen, take into account efficacy, tolerability, compliance, and cost. H. pylori is easily suppressed but, to ensure successful eradication, requires the use of... 

In economic evaluations, there is a need to make assumptions about the variables in the analysis. For instance, assumptions that are made commonly include the incidence of adverse effects, the drug s efficacy (in clinical trials) and effectiveness (use in actual practice), and the costs of drugs or other direct medical costs. It is important to keep in mind that assumptions are simply predictions about what a researcher thinks might happen as a result of a program or intervention. To account for the variety of outcomes that may arise in any intervention, researchers should use a technique known as... 

A pharmaceutical product must fulfil its purpose under all recommended conditions and it must do so reproducibly. Experience shows that efficacy in controlled experiments does not guarantee that the product does the same and to the same degree under practical conditions. Pharmaceuticals for humans must be tested in human beings for their pharmacodynamic and pharmacokinetic characteristics to prove their effectiveness and safety. These clinical trials are normally carried out in three stages, each phase involving an increased number of patients. Clinical trials in humans are usually the most critical, most expensive, and most time-consuming developmental step and can account for more than one half of the development costs. 

The sponsor must also account for the cost of preparing and providing appropriately packaged clinical trial medication to be used in its trials. This may include procurement or manufacture of comparator treatments and/or placebo medication. 

Clearly, arrangements must be made early in the trial to ensure that an efficient supply chain is set up and the associated costs (which can be significant) taken into account. In recent years, sponsors have utilized methods such as minimization techniques (within the randomization process for controlled randomized trials) to help reduce waste of clinical trial medication and hence reduce the overall cost. 

Few developed States currently charge a significant administration fee for a clinical trials approval (Massachusetts is one example). In less developed countries it may prove necessary to pay true fees together with consultation fees to government advisors. Sponsors will, however, need to take into account the costs associated with the effort of their internal regulatory staff in preparing CTX submissions (or their equivalent). 

OTA was unable to obtain much information about the structure of such accounting systems hence, the ability of firms to identify expenditures by clinical phase is unclear. All companies would have an accurate picture of monthly charges to individual project accounts, however, and the dates at which phase I, phase II, and phase III trials began are available to companies, so allocation of costs by date is a reasonable approach to estimating the distribution of costs by phase. If companies responded to survey questions with this approach, the phase-specific estimates would be reasonably accurate. 

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