1.4. Battling a high Phase III failure rate

The attrition rate of compounds in the pharmaceutical industry is extremely high. Setting aside compounds that fail the preclinical testing, it is generally recognized that less than 12% of compounds entering into the human phase testing will eventually make to the market place. The rate is a composite figure formed as the product of the success rates of passing the Phase I testing, passing the Phase II testing, passing the Phase III testing, and passing the regulatory review. Among failures at the various stages, Phase III attrition has the greatest impact. This is so not only because of all the accumulated resources expended up to this point, it is also because Phase III failure represents a great disappointment to the sponsor, leaving the sponsor short of a defendable marketing application.

In a recent article, Chuang-Stein (2004) conducted a root cause analysis of the Phase III failure rate that was reported to be running at the 50% level. This most recent figure is higher than the 32% rate reported in DiMasi, Hansen, and Grabowski (2003). Chuang-Stein attributed the cause to three major factors: the candidate factor, the sponsorfactor, and the environmental factor. While we can't dismiss the pipeline problem and wehave admittedly very little control over the behaviors of some corporate decision-makersat the highest level, many of the causes indeed relate to how clinical development is being conducted and how decisions are made to move compounds through different phases of the development. Chuang-Stein discussed what statisticians could do to help reduce the attrition rate at the late stage. One area where the methodology is well developed and statisticians could make immediate contributions is the judicious use of adaptive designs, or at least group sequential designs, in Phase III trials. The goal of such designs is to give the Phase III trials the best chance for success or to terminate them early if the trials are not likely to meet their objectives. Implicit in such designs is the inclusion of more decision points based on interim results to allow evidence-based decisions. The need to incorporate regular decision points is not limited to Phase III testing. It should be part of every stage of the drug development continuum. These decision points serve as reality checks on the long and costly development journey.

The industry is at a crossroad and changes are critically needed. Statisticians should take advantage of the challenges and fully engage themselves in looking for better ways to support clinical development of pharmaceutical products.