HOW ARE NEW DRUGS
DEVELOPED?
Durhane Wong-Rieger, PhD
Consumer Advocare Network
OVERVIEW
Examples of “innovative” and
“incremental” discoveries
What are steps from discovery
to regulatory submission?
What are likelihood of success
and cost through the process?
INCREMENTAL VERSUS BREAKTHROUGH INNOVATION
Breakthrough innovation is characterized by
first-in-class, or new therapies
 Examples include: Penicillin (first antibiotic);
Insulin (first animal insulins); Thorazine (first
anti-psychotic); first birth control pill
 “A breakthrough drug product is the first one to
be sold in Canada that treats effectively a
particular illness or address effectively a
particular indication” (PMPRB)

FOLLOW-ON (INCREMENTAL DEVELOPMENT)

Incremental Innovation is characterized by
bit-by-bit, cumulative improvement

Examples include: modern day antibiotics
(4 days, one pill/day); newer insulin therapies,
modern birth control pills, etc.
Development of follow-on drugs occurs at the
same time with that of the first-in-class
 Therapeutic value of follow-on drugs is reflected
in the percentage of priority designations,
inclusion in the clinical practice guidelines, and
coverage in major formularies

NEW PRODUCT DEVELOPMENT:
RISKY AND EXPENSIVE
Years
Discovery
(2–10
Years)
0
2
4
Phase I
20–80 Healthy
Volunteers Used to
Determine Safety
and Dosage
Phase III
1,000–5,000 Patient
Volunteers Used to
Monitor Adverse
Reactions to Longterm Use
Additional
Post-marketing
Testing
Compound Success
Rates by Stage
6
8
10
12
14
Preclinical
Testing
Laboratory and
Animal Testing
Phase II
100–300
Patient
Volunteers
Used to Look
for Efficacy and
Side Effects
FDA Review
Approval
5,000-10,000
Screened
250
Enter
Preclinical
Testing
5
Enter
Clinical
Testing
16
1
Approved by
the FDA
Net Cost: $1.3 billion
invested over 15 years
CLINICAL TRIALS
 Conducted
to determine the safety and
efficacy of the new health technologies


Many types exist
Phases:
•
•
•
•
•
Pre-clinical
Phase I
Phase II
Phase III
Phase IV (Post-Market)
MOST PRODUCTS THAT GET TO MARKET NEVER
MAKE ENOUGH TO RECOUP R&D INVESTMENT
Value of After-Tax Net Lifetime
Sales of New Drugs (in &Millions)
3000
2500
2000
1500
1000
500
$0
After-tax average R&D Cost
0
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
New Products Grouped in Tenths According to Financial Success
PMPRB - Pricing
Does the
drug
provide
value?
Provincial Regulators
Is the
Drug
Safe &
Effective?
Common Drug Review
Health Canada
MOVEMENT OF DRUG THROUGH
REGULATORY SYSTEM
Do we have
budget to
fund the
drug?
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