The economics of pediatric formulation development for off-patent drugs

Abstract

Background: Many drugs currently used in children have never been adequately studied in rigorous scientific trials. Although these medications can still be prescribed in the pediatric setting, they are considered "off-label" because they are not specifically approved for use in children. The role of the Economics Working Group (EWG) within the Pediatric Formulation Initiative (PFI) of the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD) is to identify economic barriers and to propose possible mechanisms to create cost-effective and appropriately formulated products for off-patent pediatric drugs and to ensure their distribution and availability.

Objective: The purpose of this article was to briefly outline the EWG's considerations and recommendations on these topics.

Methods: Information for this article was gathered from the proceedings of a PFI workshop sponsored by the NICHD, held December 6 and 7, 2005, in Bethesda, Maryland. Other information was based on: the authors' unpublished and published research as well as personal communication with members of the EWG; a comprehensive search of Web sites, publications, and publicly accessible databases of the European Medicines Agency, the US Food and Drug Administration, the Agency for Healthcare Research and Quality, and the NICHD; and the databases and publications available from the Louis Lasagna Library of the Tufts Center for the Study of Drug Development (Boston, Massachusetts).

Results: The US Congress has attempted to remedy the lack of incentives to develop pediatric drugs by passing 2 key pieces of legislation. After >10 years, this US pediatric initiative has stimulated a great deal of pediatric drug research, and similar initiatives have been emulated in Europe and proposed in Japan. Although the initiative is generally considered successful in the United States, an incentive gap exists that still hinders pediatric drug development. It results from a series of factors, including: (1) a relatively small market size (<10% of the overall pharmaceutical market); (2) a predominance of off-patent drug use in the pediatric setting (perhaps as much as 70%); (3) no pediatric incentives for generic drug manufacturers; (4) fewer chronic illnesses in children than in adults; (5) a higher proportion of uninsured (mostly Medicaid recipients) and underinsured (many young families) patients; and (6) higher per-patient costs as well as greater complexity of drug development. By understanding these barriers, more appropriate incentives can be generated by government, where these incentives are not inherently present in the market.

Conclusions: The lack of child-friendly formulations leaves 40% of the world's population at increased risk for avoidable adverse events, suboptimal dosing, noncompliance, and lack of access to new medicines. Incentive programs are the surest and least expensive means to overcome the tendency of "big pharma" to overlook the pediatric market as too small, and of start-up and specialty companies to consider it too problematic. Given the relatively lengthy period required to build product development infrastructure, these several decades-when market growth potential, demographics, and public health considerations are aligned in favor of pediatric formulation needs-are a critical time frame for creating a private and public sector environment to support this effort.