There exist scientifically promising treatments not being tested further because of insufficient financial incentives. Many of these therapies involve off-label uses of drugs approved by the Food and Drug Administration that are readily available and often inexpensive. Pharmaceutical companies—largely responsible for clinical drug development—cannot justify investing in such clinical trials because they cannot recoup the costs of these studies.  However, without prospective data demonstrating efficacy, such treatments will never be adopted as standard of care.

In an era of increasing health care costs and the need for effective therapies in many diseases, it is essential that society finds ways to adopt these “financial orphans.” We propose several potential solutions for the non-profit sector, pharmaceutical companies, health insurers, patient driven research, and others to accomplish this goal.

Drug Development Today

Under today’s drug development model, the vast majority of clinical trials are sponsored by pharmaceutical companies, and the process is lengthy, expensive, and, some have argued, inefficient. The cost of developing a new FDA-approved drug is estimated to exceed $1.2 billion, the average time from lead to market is typically over 10 years, and only 1 in 10 drugs entering a phase I study is finally approved. Thus pharmaceutical companies, seeking to recoup this investment, conduct a return on investment (ROI) calculation with attention to both scientific and financial considerations such as the chances of success and whether the therapy will be sufficiently profitable to justify the high cost of clinical development.

These considerations sometimes lead to inefficient outcomes from society’s perspective in which promising and potentially transformative therapies are not pursued because of improperly designed financial incentives. We call such therapies “financial orphans.”

Financial Orphans

Financial orphans fall into several major categories:

(a) New drug with IP protection with small market size or poor reimbursement potential. This situation could arise from too small a market size or an unwillingness or inability of patients, governments or other insurers to cover the cost of the drug.

(b) An existing drug for a new indication with patent protection for the new use. The issue here is whether the new indication for the drug can generate enough revenue to justify expenditure in clinical development. Even if a company had a new-use patent for an existing drug, it might be hard to change the price point from that of its original indication or to enforce a higher price point. Thus even with patent protection, the clinical development of such a drug for a new use may languish. This set of issues is often referred to as repurposing in the literature and even though a few notable examples do exist of successful repurposing by the for-profit sector, this matter remains a lost opportunity.

(c) An existing drug for a new use without patent protection. This situation may arise when information on a new use has been released into the public domain without being first patented.

(d) Nutraceuticals, herbal products or other Generally Regarded As Safe (GRAS)substances that were never patented.

(e) Therapies focused on lifestyle changes such as diet, exercise or stress management.

We have highlighted categories of promising treatments that may never be fully explored due to lack of financial merit. These treatments are billed as “unproven” in the eye of mainstream medicine and are sometimes perceived as treatments that do not work—in reality we do not know, since they have not been subjected to rigorous testing. And while they lack definitive clinical validation, they possess certain attractive attributes: their toxicity in humans is well-established, they are immediately available, and they are typically affordable. Given the many unmet medical needs, the high cost of newly approved drugs, and the long timeframe required for new drug development, it is ironic that financial orphans are largely being ignored.

Potential Solutions

There is no single or simple solution to this problem. Various perspectives (regulatory, legal, patent, funding, etc.) should be collectively explored. We offer some initial possibilities.

The Non–Profit Sector. As representatives of the public interest, state and federal agencies could address this issue by sponsoring the necessary studies. For example, the National Institutes of Health could expand its role in such activities, perhaps through its National Center for Advancing Translational Sciences (NCATS) program. The NIH does spend a portion of its budget on funding large cooperative group studies especially in cancer, but most of these studies are phase III trials in which various combinations of on-patent drugs, typically from different companies, are being evaluated. Perhaps a portion of this budget could fund smaller studies in which financial orphans are specifically targeted.

Academic medical centers (AMCs) have a tripartite mission: patient care, teaching, and research. With access to diverse patient populations, the presence of a cadre of experienced clinical investigators, and an infrastructure for supporting clinical studies—often with cutting edge biomarker technologies (including imaging)—these centers conduct pivotal clinical trials for the pharmaceutical industry. An AMC dedicated to studies of financial orphans might be particularly attractive to patients who wish to see their philanthropic support put to immediate translational use. Indeed, these studies are essentially investigator-initiated trials, which, from an academic standpoint, should be at the core of an AMC’s mission.

Another solution is to “delegate” the development of these financial orphans to non-profit organizations which are not motivated by profits, e.g., health care-related foundations and patient advocacy groups. These philanthropic organizations raise funds from patients, their families, and the public at large with a mission to “find a cure” for a particular disease. However, most such organizations follow the NIH model of primarily funding basic research. Notable exceptions include the Multiple Myeloma Research Foundation and the Michael J. Fox Foundation for Parkinson’s Research, among others: these have a clear translational focus.

One such translational activity is funding clinical trials, especially when there are discoveries waiting for translation to the clinic. Others might include platforms for integrating clinical outcomes with “omics” data of various sorts. GlobalCures, a non-profit medical research organization, is an entity dedicated to promoting financial orphans. It aims to raise awareness of this problem, set up a model of sharing patient derived clinical outcomes data and facilitate and fund rigorous clinical studies on all the major categories of financial orphans, with a focus on cancer. Another organization is Cures Within Reach, which is focused on repurposing drugs.

Pharmaceutical Companies. Pharmaceutical companies might play a role in select circumstances. They might sponsor studies to build their brand or to gain good will. Examples include Merck’s eradication of river blindness and the Novartis Institute for Tropical Diseases that is committed to finding medicines to treat neglected infectious diseases in developing nations. Or pharmaceutical companies might fund studies that provide novel insights into disease pathophysiology, even though the intervention is one that is not profitable.

Consortia of generic drug companies could collectively fund studies on a common generic drug they manufacture. Though this does not solve the problem of another company jumping into the market after positive results are announced, it will develop expertise in drug development for generic companies that may wish to enter the market with branded drugs in the future and hence money well-spent.

Yet another solution is for a drug company to pursue formulation patents of a generic drug or to formulate a combination pill, as this could offer some form of IP protection. However, such patents tend to be weaker than composition of matter patents.

Another option is to modify an existing drug and charge a premium for the modified version. Such is the case for temsirolimus, everolimus, and AP23576, all of which are analogs of rapamycin, which goes off-patent in January 2014. While this type of product differentiation may yield new patent protection, doctors, payers, and patients may not be convinced and might use the less expensive drug off-label. Thus pharmaceutical companies are taking a significant financial risk in pursuing this form of drug development.

Health Insurers. There is an obvious financial incentive for health insurers to keep their patient base healthy. For this sector, trials that focus on prevention or prevention of recurrence of disease, such as for early stage cancer, may indeed offer a substantial ROI. Therefore the US government (the largest insurer), private insurance companies such as Blue Cross Blue Shield, or integrated managed care entities such as Kaiser Permanente could be major sources of funding for such trials.

Prevention treatments, especially those that are inexpensive and where disease treatment costs are disproportionally expensive, are ideally suited for funding by health insurers who bear the cost of both preventative and disease treatments. For example, a recent retrospective analysis found that the pre-incisional use of ketorolac—a non-steroidal anti-inflammatory drug—in operable breast cancer patients undergoing mastectomy decreased the absolute recurrence rate by around 10 percent. If this data were to extrapolate to overall survival in those at high risk of recurrence (approximately 100,000 patients presenting annually with stage II or III disease) in an interventional study, approximately 10,000 lives could theoretically be saved annually in the US.

The prevention treatment in these high-risk cases would cost $5 million annually (100,000 cases at $50 per case for ketorolac and its administration). The savings would be over $1 billion annually (10,000 patients at approximately $100,000 per patient for the treatment of metastatic disease). The one-time cost of the trial would be less than $10 million dollars, including measurements of angiogenic and cytokine biomarkers pre- and post-surgery, to be used for correlative studies. In addition, such a strategy might extrapolate to other cancers as well.

Also, adjuvant use of drugs such as beta blockers, cimetidine, metformin, statins, and ACE inhibitors or later use of aspirin in this same patient group–along with diet and lifestyle changes such as exercise and stress control—might further reduce systemic relapse and improve overall survival. Retrospective human data and preclinical mechanistic studies support such trials. A study along these lines in breast cancer is just underway (NCT01806259) in Belgium, funded by the non-profit entity Anticancer Fund.

Patient Driven Research. There may be other innovative and even low-cost methods of identifying potentially valuable therapies ignored because of insufficient financial incentives. Ours is a unique time in biomedical history, with a convergence of a number of forces: the “omics” revolutions; information technology to store, mine and transmit data; affordable diagnostics for probing the human condition; and an expanding social network of well-informed, engaged patients. Thus crowd-source innovation in the biomedical arena is a real possibility.

One could capitalize on opportunities resulting from these developments. For example, motivated patients—especially those with chronic or life-threatening diseases such as cancer—now have easy access to scientific information via the internet and various disease-specific information-sharing social networks, e.g.,  They pursue a number of complementary treatments for their disease along with the standard of care, often paying out of pocket in the hope of improving outcomes.

Data on patient outcomes is currently lost; while individually inconclusive, it could be collectively valuable. Microsoft HealthVault, a web-based platform that stores health and fitness information; Indivo a “distributed, web-based, personally controlled electronic medical record (EMR), built to public standards, and available under an open-source license;” and companies such as PatientsLikeMe offer technology to collect data from patients. Such patient-reported outcomes studies are hypothesis generating, at the very least, and could potentially also be quite robust.

While not as rigorous as randomized, placebo controlled trials, mining of patient clinical databases, either self-reported or from EMRs, offer several major advantages: they might provide early signals of efficacy, they are cost-effective, and they may offer large and diverse patient accrual rapidly, spanning many geographic locations and ethnic backgrounds. They could be rendered more robust if physicians were asked to verify patient-reported data, or better still, if a patient could easily donate their EMRs via a “blue button” type technology, avoiding cumbersome and possibly inaccurate human intervention.

Such studies could be made even more powerful if the self-reporting or EMR were coupled to methods for remote monitoring, using devices such as implantable biosensors to monitor physiology, or if they incorporated biomarker panels. If the data were sufficiently compelling, it may change medical practice without the need for a randomized trial or it might motivate relevant stakeholders to conduct such trials. Also, when there is a non-existent or smaller profit motive, regulators and payers might be satisfied with less rigorous, but more cost-effective approaches, though this will need to be carefully assessed on a case-by-case basis.

Interventions that are generally inexpensive, non-toxic, and easy to administer, and where the outcome is binary (e.g. recurrence/no recurrence of disease) may be best suited for such studies. The ketorolac trial mentioned above could be conducted in this way. The use of fish oil to potentiate chemotherapy efficiency in the treatment of advanced lung cancer is another example. Fish oil is readily available, the outcomes would be response rate and type of response (complete or partial response, stable or progressive disease), and a biomarker (omega 3 levels in the blood) is cheap and easy to obtain.

Other Considerations. Funding studies in stages might also be of value for rescuing financial orphans.  Initial trials could focus on small, proof-of-mechanism studies with extensive use of biomarkers to stratify patient populations most likely to respond and sophisticated assays to see if the intended target is being hit. The goal would be to test hypotheses. There would be no attempt to maximize market size, an understandable goal of the for-profit sector. If a positive signal emerged from such studies, it might be easier to convince various entities to fund larger, more definitive studies.

Since the goal of clinical studies that include financial orphans is not to seek FDA approval for the indication but rather to conduct a rigorous study acceptable for peer-reviewed publication, it might also be possible to use particularly innovative clinical trials designs, even if the FDA might not have yet adopted these for the approval of new drugs. Certain types of adaptive trial designs might fall into this category.

In summary, the magnitude of current unmet health care needs, the high cost of developing safe and effective new therapeutics, and our ever spiraling health care costs make it imperative that scientifically promising opportunities should not be left untapped. Those that may not be profitable to the pharmaceutical industry—the standard bearer for new therapeutics—present a unique challenge.

To meet this challenge, we must start by acknowledging the existence of financial orphans and then implement solutions of the type suggested above. Both the non-profit and for-profit sectors play critical roles in this effort. Moreover, patients should drive this agenda by adopting these orphans and insisting on their development. They can share their health data in innovative ways, while respecting its confidentiality, and provide strong advocacy by capitalizing on today’s socially wired world. The results could be revolutionary—a democratization of drug development—for the benefit of all.

Editor’s note: The authors would like to thank P. Forget, M. Retsky, M. T. Rabkin, M. Holmes and N. Sumathi for helpful comments.