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Study examines pharmaceutical spending on post-approval drug safety

Duke University Pratt School Of Engineering : 20 December, 2006  (Technical Article)
The recent removal of high-profile pharmaceutical treatments from the market has focused the public
A new study from Duke University and The University of North Carolina at Chapel Hill estimates that the top 20 pharmaceutical manufacturers spent a total of $800 million, or 0.3 percent of sales, on drug safety monitoring following FDA approval. In the same year, pharmaceutical companies spent 15.6 percent of sales on research and development of new drugs.

“Now that we have established how much is spent monitoring drug safety, the next question is whether more should be spent,” said David Ridley, assistant professor at Duke’s Fuqua School of Business and lead author of the study. “My sense is that we should not necessarily spend more on the same system, but create complementary systems to improve safety.”

The study was conceived in 2002 during a meeting convened by the Center for Education & Research on Therapeutics that included consumers, the pharmaceutical industry, universities, government and health professional societies. “Even before the Vioxx withdrawal, there was broad interest in improving the system for monitoring drug safety,” Ridley said. “The Vioxx withdrawal increased that momentum.”

“It’s important to monitor the safety of marketed pharmaceuticals because clinical trials can’t detect rare side effects,” said Dr. Kevin Schulman, director of Fuqua’s Health Sector Management program and one of the study’s authors. “Clinical trials are not designed to detect events that occur in as few as one in 1,000 patients. Many risks and adverse effects cannot be observed until after a treatment has been approved and used by a large and diverse population. That is why post-approval monitoring is key to protecting patient health.”

Under the current drug safety surveillance system, patients or health care providers report adverse reactions to drug manufacturers or the FDA. The Duke-UNC study explored pharmaceutical companies’ spending on post-approval safety, which they found primarily involves staff analyzing and responding to those reports.

The research was conducted via a web-based survey that 25 large pharmaceutical companies were invited to complete. Eleven of the 25 companies completed the survey; those 11 companies’ sales accounted for 71 percent of sales by the top 20 pharmaceutical manufacturers in 2003.

The companies each spent an average of $56 million for post-approval safety, in a year during which their mean sales were $17 billion per company. The researchers used the safety spending data reported by the 11 participating companies to calculate that the top 20 companies spent $800 million in post-approval safety.

The researchers also reported that the U.S. government budgeted $22.1 million for the Office of Drug Safety in the FDA’s Center for Drug Evaluation and Research, less than the mean safety spending by an individual firm.

“With greater funding from manufacturers and/or the FDA, more post-approval research could be conducted to followup on pre-approval concerns and investigate new signals identified by surveillance,” said Dr. Judith Kramer, chief medical officer of the Duke Clinical Research Institute and one of the study’s authors.
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