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David B. Ridley, Judith M. Kramer, Hugh H. Tilson, Henry G. Grabowski, and Kevin A. Schulman Spending On Postapproval Drug Safety Health Affairs, March/April 2006; 25(2): 429-436. [Abstract] [Full Text] [PDF] [Online Supplement] [Reprints & Permissions]

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Of One $56M Apple and Many Uncounted Oranges: Spending on Postapproval Drug Safety

Ivo L. Abraham, Karen M. MacDonald   ( 28 March 2006 )

Reply From The Authors

David B. Ridley, Judith M. Kramer, Hugh H. Tilson, Henry G. Grabowski, and Kevin A. Schulman   ( 6 April 2006 )

Of One $56M Apple and Many Uncounted Oranges: Spending on Postapproval Drug Safety 28 March 2006
Ivo L. Abraham, Principal & Adjunct Professor Matrix45, LLC & University of Pennsylvania, Karen M. MacDonald Send comment to journal: Re: Of One $56M Apple and Many Uncounted Oranges: Spending on Postapproval Drug Safety iabraham{at}matrix45.com Ivo L. Abraham, et al.	It is no doubt helpful to have financial benchmarks for the various activities and processes that make up the scientific and commercial life cycles of a drug. Ridley et al. reported that in 2003 the mean spending on postapproval safety for eleven drug manufacturers (of twenty-five contacted and all members of the Pharmaceutical Research and Manufacturers of America, or PhRMA) was $56 million, or 0.3% of total sales. The devil of any financial model is in its conceptual and operational details, and here the Ridley et al. findings are incomplete if not misleading. Taken out of context (as financials often are –- think: media, biased advocacy, lawyers, etc.), these findings may confound the public’s understanding of pharmacovigilance, regulatory mandates, and industry commitments. Note also that it is unclear whether the spending estimates reported are corporate headquarters (or global operations) expenditures only, or whether they also include safety-related expenditures by local operating companies. The survey conducted by Ridley and colleagues was limited to “postapproval safety activities” (p. 430) and excluded some other activities, leaving seven rather vaguely defined postapproval activities under consideration (see pp. 430-431 for more detail): (1) handling individual adverse-event cases; (2) summary report production; (3) safety department operations; (4) safety surveillance activities; (5) postapproval safety studies; (6) epidemiologic activities; and (7) safety labeling changes. First, to argue that these activities account for drug manufacturers’spending on postapproval drug safety, as the paper’s title states, represents an inadequate scoping and defining of pharma’s various pharmacovigilance activities and associated investments. At best, the $56 million figure is an estimate of what is spent on complying with regulatory requirements, not what is spent on comprehensive portfolios of stand-alone and integrated safety monitoring and pharmacovigilance R&D –- globally and at the local operating company level. Though as scientists ourselves we are inclined to believe data and eschew intuition, the $56 million figure does not fit with our observations of activities and (admittedly) ball-parked expenditures by drug manufacturers related to some recent safety issues (think: pure red cell aplasia and erythropoietic proteins, adolescent suicidality and selective serotonin reuptake inhibitors, just to name a couple [in alignment the Ridley et al., we leave out the issue of COX-2 inhibitors]). Second, managing voluntarily reported adverse events information is only a small part of good and responsive pharmacovigilance. Many safety activities are integrated into and embedded in other postmarketing activities: phase 4 randomized controlled, open label trials, and/or nonrandomized trials; observational studies; product and patient registries; practice patterns and outcomes surveys; analyses of claims databases, electronic medical records, and other electronic sources; reactive and proactive activities in response to emerging safety issues; regulatory and formulary filings (think: National Institute of Clinical Effectiveness in the U.K.); and possibly even proactive legal analysis. On top of this, it seems prudent to include accurate personnel allocations to the safety components of integrated postmarketing activities as well as a reasonable overhead/infrastructure factor. One could argue that postmarketing studies are not driven by safety but rather by strategic and commercial objectives. Certainly, the biopharma industry should be the first to admit that its (hopefully now past) practice of underpowered and poorly designed data collection efforts with limited clinical relevance and scientific merit should not be part of the financial safety equation. To its credit (and, admittedly, to these authors’ company’s financial benefit), biopharma is doing a remarkable effort, under pressure but also voluntarily, to mount integrated postapproval programs that benefit patient care and are scientifically defensible, transparent to all stakeholders, accommodating to but not compromised by commercial priorities, and yielding data assets of significant value to proactive pharmacovigilance. To exclude postapproval safety activities funded by medical affairs, marketing, and corporate strategy budgets impairs the validity of any financial benchmarking effort, disregards the true expenditures and underlying commitments, and misinforms the various stakeholders in drug safety. In summary, at best the Ridley et al. estimate of $56 million is what corporate headquarters or US affiliates report to spend on operational compliance with regulatory safety requirements (“the $56M compliance apple”); not on comprehensive postapproval pharmacovigilance activities -- internal and external, stand-alone and integrated, global and local (“the many uncounted oranges”). It artificially separates safety compliance operations from enterprise-wide pharmacovigilance. It implies that drug safety is something to be done, and discounts the innovation that may come from global and local postapproval activities. Perhaps the various pharmaceutical manufacturers associations worldwide should jointly commit to funding an independent, RFP-driven, peer-reviewed, economic study of the costs of responsive and proactive pharmacovigilance. It would signal to all drug safety stakeholders both the industry’s concern for safety and its commitment to independent evaluation. In the current volatile if not inflammatory public debates surrounding drug safety, financial estimates that are ambiguous at best do not benefit patients, clinicians, regulators, drug manufacturers, and other stakeholders. It is only a matter of time before the $56M apple will be taken out of context, misappropriated, and cited with total disregard for the partial merit but also severe limitations of the Ridley et al. exercise. DISCLOSURES We declare to have no conflicting interests with regard to this Commentary. Though most of our work is funded by drug manufacturers, this Commentary was prepared without any encouragement, suggestion, support, or other contact by and from industry or clients.
Reply From The Authors 6 April 2006
David B. Ridley, Assistant Professor Fuqua School of Business, Duke University, Judith M. Kramer, Hugh H. Tilson, Henry G. Grabowski, and Kevin A. Schulman Send comment to journal: Re: Reply From The Authors david.ridley{at}duke.edu David B. Ridley, et al.	The eLetter from Abraham and MacDonald is helpful in highlighting the scope of activities included in an assessment of post-approval safety, but it appears that there is a misunderstanding about the scope of our study. Abraham and MacDonald write: “In summary, at best the Ridley et al. estimate of $56 million is what corporate headquarters or U.S. affiliates report to spend on operational compliance with regulatory safety requirements.” In fact, the introduction to our survey reads as follows: “Scope: This survey is intended to capture global pharmacovigilance costs. It should not be limited to U.S. costs because: (1) as global companies it would be difficult to separate costs by country, and (2) the goal of the survey is to show what companies are spending on overall safety activities (not just regulatory reporting), so it should be as inclusive as possible.” We measured global costs of companies with a U.S. presence. We included epidemiologic studies, registries, and even post-approval trials focused on safety initiated by the company regardless of FDA mandate. We did not include post-approval studies developed for purposes such as establishing market position of a product, comparative effectiveness, or new indications, because such studies are typically underpowered to address safety. We believe that we selected the appropriate scope based on valuable input from members of the Pharmaceutical Research and Manufacturers of America (PhRMA) Pharmacovigilance and Epidemiology Technical Group. We designed the study to provide an objective assessment of the costs of drug safety that could withstand scrutiny and be replicated in the future. We encourage debate about the nature and amount of spending by industry, government, and other partners in the drug safety system. Whether industry's current share is too much, too little, or exactly appropriate should follow a more focused debate on best strategies to accomplish the complex public health tasks at hand.