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Low-value approvals and high prices might incentivize ineffective drug development

Nature Reviews Clinical Oncology volume 15, pages 399–400 (2018)Cite this article

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An Addendum to this article was published on 12 November 2018

Drug regulators’ acceptance of any statistically significant improvement shown in a single randomized trial and lofty drug prices has created a situation where it is now, hypothetically, profitable for a company to run a clinical trials portfolio of chemically inert compounds. While the current cancer drug pipeline is certainly superior to inert drugs, we must rethink market incentives to encourage transformational drug development.

In recent years, several observations regarding clinical trials in oncology have generated debate, but a unifying theme has not been elucidated. First, the clinical trial portfolios of several pharmaceutical companies seem to have grown and include studies pursued with a limited potential to improve the standard of care, which might duplicate the trials of similar drugs pursued by rival companies1. Second, the FDA has shown a willingness to approve anticancer drugs based on the findings of a single randomized trial that achieves statistical significance, even if the magnitude of benefit is marginal or only quantified using a surrogate outcome. Third, the price of anticancer drugs has escalated steadily, and even drugs with indications restricted to small populations of patients often achieve a billion US$ in annual sales and billions in profit over their patent cycle.

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Fig. 1: Break- even point at which a null trials agenda would turn a profit based on one or two nominally significant randomized trials.

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Authors and Affiliations

  1. Division of Hematology Oncology, Knight Cancer Institute, Oregon Health & Science University, Portland, OR, USA

    Vinay Prasad

  2. Department of Public Health and Preventive Medicine, Oregon Health & Science University, Portland, OR, USA

    Vinay Prasad

  3. Center for Health Care Ethics, Oregon Health & Science University, Portland, OR, USA

    Vinay Prasad

  4. Executive Director and CEO of the Institute of Health Economics, Edmonton, Canada

    Christopher McCabe

  5. Myeloma Service, Department of Medicine, Memorial Sloan Kettering Cancer Center, New York, NY, USA

    Sham Mailankody

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  1. Vinay Prasad
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  2. Christopher McCabe
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Correspondence to Sham Mailankody.

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Prasad, V., McCabe, C. & Mailankody, S. Low-value approvals and high prices might incentivize ineffective drug development. Nat Rev Clin Oncol 15, 399–400 (2018). https://doi.org/10.1038/s41571-018-0030-2

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