Everyone is most interested in projects that succeed. The challenge is that most projects in Bio/pharmaceutical R&D do not succeed. Figure 1 outlines the high attrition in the industry – only 1.8 % of projects succeed from Target Discovery all the way to product launch. Once a clinical candidate is discovered the probability of success is only marginally better – 7% of clinical candidates give rise to product launches – hence the interest in attrition, which is the inverse of success.
Figure 1, Attrition Across the Pipeline. 1
A group from AstraZeneca recently provided success rates for their own portfolio as well as those of the the Pharmaceutical Benchmarking Forum (PBF), managed by the KMR Group. Preclinical Evaluation and the clinical phases I, IIa and IIb [2. D. Cook, D. Brown, R. Alexander, R. March, P. Morgan, G. Satterthwaite, M. Pangalos, “Lessons learned from the fate of AstraZeneca’s drug pipeline: a five-dimensional framework” Nat. Rev. Drug Disc. 2014, 13, pp. 419-429 ]. Within this group of companies and time frame (2005-2010) the succcess rates were comparable to Brown and Superti-Furga, with the exception of Phase IIa, distinguished from Phase IIb, Figure 2. Intriguingly the authors from AstraZeneca separate Phase II into IIa and IIb. Most often the two are combined. If we average the two medians we get a Phase II average success rate of 38% for AZ and 48% for PBF. The PBF number is comparable to 44% determined by Brown and Superti-Furga. The transition from Phase IIa to IIb involves the Proof of Concept (POC) milestone, meaning that efficacy was observed in patients. If POC is questionable the company may decide to discontinue rather than risk failure at the most expensive stages IIb and III.
#click to enlarge figure
Figure 2. Comparing Success Rates for Preclinical Evaluation, Phase I, Phase IIa, and Phase IIb between AstraZeneca and the PBF from 2005-2010. Data from Ref 2.
High attrition means that a lot of the investment in R&D will be lost. In the period between 1990 and 2004 Pammolli et al. showed that attrition rates have been steadily increasing. 2 The cost of R&D keeps increasing as well (see the section NME Output versus R&D Expense – Perhaps there is an explanation), which means that more money will be lost every year. So two approaches may be taken – the first is to try to improve attrition, the second is to live with it and try to decrease the impact of attrition.
Each drug that reaches the market bears the discovery and development costs of all the other program failures. The true cost of a drug reaching the market has recently been estimated to be US$0.8–1.0 billion. 3, 4 The FDA determined that a ten percent improvement in compound attrition would save $100 million per drug. 5 These are compelling reasons to try to improve attrition. The mantra of reducing attrition has caught on in both industry and academia and serves as the raison d’etre for many new initiatives and organizations, e.g. the EU Innovative Medicine Initiative 6 the PHRMA Pharmaceutical Innovation Steering Committee 7, the Critical Path Institute 8, and the SAE Consortium. 9
The discussion continues in the following subsections (also listed at bottom of page):
Factors that Influence Attrition Rates
Attrition – Reasons for Failure
Ways to Improve Attrition in Phase II and III
Living with Attrition – Ways to Compensate for Attrition
An Unprecedented View of Attrition in a Corporate Portfolio
The reader may also want to consider downloading our whitepaper “Attrition, Improving it or Living with it” which provides all of this information in one document – available at this link in the Downloads section (under construction).
We show that some things can be done to reduce attrition, especially in Phase II and Phase III by preventing projects identified as risky in earlier stages from advancing into these stages. But POS may never be improved above 60%, in which case learning to live with attrition through portfolio optimization, planning for failure and reducing cost may improve prospects overall. It is also fair to say that attrition needs to be evaluated in relation to a number of factors, such as cost, return on investment, and corporate/portfolio strategy.
- Data from leading pharma: “Rediscovering the Sweet Spot in Drug Discovery”, David Brown and Giulio Superti-Furga, Drug Disc. Today, 8, (23) 106-1077 (Dec. 2003). Gilbert et al. show essentially the same level of pipeline attrition 13-Preclinical projects, 9-Phase 1 projects, 5-Phase 2 projects, 2-Phase 3/Launch projects to 1 Drug Launched – Jim Gilbert, Preston Henske, and Ashish Singh, “Rebuilding Big Pharma’s Business Model,” Bain & Company 01 Nov. 2003, 29 Oct. 2007 http://www.bain.com ↩
- Pammolli, A., Magazzini, L., and Riccaboni, M., “The Productivity Crisis in Pharmaceutical R&D” Nat. Rev.Drug Disc. 10, p428-438 (2011) ↩
- DiMasi, J. A. & Grabowski, H. Economics of new oncology drug development. J. Clin. Oncol. 10, 209–216 (2007). ↩
- DiMasi, J. A., Hansen, R. W. & Grabowski, H. The price of innovation: new estimates of drug development costs. J. Health Econ. 22, 151–185 (2003) ↩
- FDA white paper “Innovation or Stagnation”, 2004 ↩
- http://www.imi.europa.eu/ ↩
- J. Michael Maher, Introduction: PHRMA’s Best Practice Initiative on FDA’s Good Review Management Practices, Drug Information Journal, 42, 1-2 (2008), http://www.nxtbook.com/nxtbooks/dia/druginformationjournal0108/index.php?startid=1 ↩
- http://c-path.org/ ↩
- http://www.saeconsortium.org/ ↩