Self-funding Trials: A New Financial Model for Generic Drug Repurposing

The current “blockbuster” model for drug development is unsustainable and it is clear that an alternative model is needed. In particular, the R&D costs for developing one drug has been estimated to exceed billions of dollars, and takes over 10-15 years [1], which is much longer and more expensive than necessary. Under so-called “Eroom’s law”, such R&D costs are doubling every nine years [2], with the US median annual list price of new drugs being US$300,000 per annum in 2023, up 35% from the previous year [3]. Orphan drugs are also reaching exorbitant levels, such as Ravicti (glycerol phenylbuterate), which is priced at approximately US$800,000 per annum for Urea Cycle Disorder [4]. However, by leveraging a new model of self-funding clinical trials, it is possible to address both the financial toxicity of new drugs and the lack of private incentives to repurpose low-cost generic drugs for new uses [5]. In particular, by comparing a low-cost intervention, such as a repurposed generic, with an expensive drug, the immediate cost-savings generated for payors can fund the trial itself, even if it fails. This methodology is referred to as “interventional pharmacoeconomics” [6] although it can apply to any interventions where the cost-difference exceeds the cost of funding the trial (e.g. over US$20,000 per patient per annum). To address ethical concerns with comparing an approved intervention to a yet-to-be approved one, it is possible to focus on low-cost interventions that are most likely to provide superior health outcomes, such as through improved efficacy, safety, compliance or convenience. Commercial, political and legal barriers to leveraging self-funding trials should be considered, and vary by jurisdiction. These include whether the co-operation of the trial sponsor with the holder of the marketing authorisation of the generic is needed, whether payors are disincentivised from co-operating due to volume discounts or rebates offered for expensive drugs, and whether payors are legally permitted to fund clinical trials [7].