Why Aren’t More Drugs Already on the Market Repurposed for Other Diseases?

Structuring incentives — extended patent protection, expedited approval — turns out to be remarkably difficult

Imagine you’re a pharmaceutical company with a cholesterol drug you can sell for $400 a pop for the next 10 years. You understand that once that exclusivity era expires, generic manufacturers will swarm in and take most, or all, of your $400 customers by selling $40 knockoffs. 

But say there are signs this drug also helps Parkinson’s patients. Maybe that hope emerged during clinical trials or in reports from neurologists that prescribed it off-label. With more investment and testing, you might be able to substantially grow the size of your market for this drug.

Meanwhile, the FDA would love for you to find another purpose for your already-safety-tested cholesterol drug. In many cases, the agency will speed up the review process to get the secondary treatment approved. Or it might offer to add some years to the exclusivity period — that lucrative era when you can price the drug however you want, without fear of competition. Theoretically, you could get brand new monopoly protection at a fraction of new drug development costs and expand your customer base; all the while advancing medical therapies apace for patients that really need them.

Sounds like a win-win for everyone, right? 

It’s not, UC-Riverside’s Elodie Adida and UCLA Anderson’s Fernanda Bravo explain in a working paper. Testing those FDA repurposing incentives under a model, they find that both — extending market exclusivity and priority review — create some sobering trade-offs between what’s best for patients, and what can entice a drug developer to invest in a secondary use for an already approved drug.

Necessary Bait 

Drug developers don’t pursue nearly enough opportunities to repurpose their own drugs for new therapies, according to National Institutes of Health directors and medical research. There was a burst of repurposing efforts in the COVID-19 pandemic, but it faded quickly as the crisis and extra funding for it ebbed.  

Adida and Bravo wanted to know if a well-designed incentive program — one that improves the economics for developers — could encourage repurposing and improve patient welfare at the same time. 

They model the interactions between a drug manufacturer, its current and potential customers, and a regulator as various versions and combinations of priority review and extended exclusivity incentives are applied. The developer, which has a brand-name drug suitable for repurposing, is motivated by profits. The patients are affected by price, need and availability of the drug. The regulator wants to get more treatments for all diseases to market, without harming any patients.

Promises to fast-track repurposing applications can motivate investment, and while the quicker approval benefits patients, the benefit for drug developers is more subtle. 

Developers often take a pass when priority review is the only perk on the table, according to the model. Extending the exclusivity period appears to be a much stronger incentive. But in that scenario, the original patients get cheated out of some years of lower prices that an ordinary expiration period would have given them. 

“Skinny labeling,” a practice that extends exclusivity only to sales of the drug to the secondary population, sounds like the win-win regulators seek. That generic cholesterol drug can enter the market, but generic manufacturers are prohibited from marketing (labeling) their low-price versions for the secondary indication for some years.  

The program, however, is rife with leakage, the study notes. Many of those Parkinson’s patients will fill their scripts with the competitor’s far cheaper generic, regardless of prohibitions on paper. Outlawing that, or strictly enforcing skinny labeling, would improve developer profits, the model finds, but would hurt patients. The researchers note that, due to legal challenges and enforcement difficulties, skinny labeling may be losing favor as an incentive.  

The Cost of an Incentive

To illustrate the incentives analysis from a developer standpoint, consider your imaginary pharmaceutical company and its $400 cholesterol drug, which we’ll call Golden. (A name the FDA would certainly reject.) Let’s say your regulatory monopoly period is down to four more years, ending in 2030. The calculation when offered both types of incentives to develop it for Parkinson’s might shape up like this: 

Say the FDA has offered a shortened review period, and, on approval, a three-year exclusivity extension that applies to doses sold to cholesterol and Parkinson’s patients alike. (It could be seven years extra if Parkinson’s was a rarer disease or a pediatric issue.) You could be on track to market Golden for Parkinson’s by 2029. 

At that pace, however, Golden really gets only two years of extended price protection; the original approval would have kept the generics at bay until 2030, and the new one extends that until 2032. 

Biting at an incentive has pricing consequences too, the study describes. Technically, the developer is free during the additional exclusivity period to set Golden-for-Parkinson’s price as high as they think the new customers will pay. It’s quite possible the projected, say, 40,000 Parkinson’s customers would pay more to reduce their symptoms than your current 400,000 cholesterol patients ever would.

The FDA, however, won’t allow you to charge those new Parkinson’s customers more than the cholesterol patients pay. Differential pricing by disease is prohibited. If you price Golden-for-Parkinson’s for what you think it’s worth, you could drive away every last one of your cholesterol customers, even before generic versions are manufactured. 

That’s just a sample of how incentives appear to disrupt motivation for repurposing. For a mathematical explanation of how the model works, the authors walk through its inputs and outputs using a real drug, Neurocrine Biosciences’ Ingrezza. Repurposing Ingrezza was approved to treat a rare disease six years after its original approval in 2017. The exercise illustrates, on a technical level, how priority review and extended exclusivity change the calculus. 

When Cheap and Fast Aren’t Enough

It’s notable that drug companies aren’t drawn more often to repurposing, solely because pursuing it is so much less risky than moving on to new development. De novo drug development has less than a 10% approval rate and carries costs ranging from hundreds of millions to nearly $3 billion, over 10-17 years, the study points out. Repurposing efforts costs about half that, are typically completed in well under 10 years and have a success rate of around 30%. 

The authors looked for a sweet spot using both incentives that might sufficiently motivate repurposing and benefit patients. Their findings suggest that shortening the review period as much as feasible benefits patients and, in some but not all instances, developers. When that’s not enough, the shortest effective exclusivity extension does the least harm to patients. 

It’s still unclear how often, if ever, a promise to fast-track a repurposing application without extra exclusivity would move a developer to pursue it. When a longer monopoly becomes the necessary bait, the realistic goal appears to be limiting, rather than eliminating, the cost to patients.