Using Interventional Pharmacoeconomic Clinical Trials and Outcomes-Based Contracts to Repurpose Generic Drugs with Cost-Savings

One of the greatest barriers to the repurposing of generic drugs is the lack of a financial model to recover the costs of clinical trials. Academics have acknowledged this “problem of new uses” for many years.[1] And so despite their great medical and cost-saving potential, repurposed generic drugs are referred to as “financial orphans” [2], “highly non-excludable therapies” [3], or “unmonopolisable therapies” [4], that are extremely unlikely to receive the funding needed for regulatory approval. One proposed solution to the problem of new uses is to restrict off-label use and allow reimbursement of the repurposed generic at a higher price for the new indication.[5] Another option is the increased public funding of clinical trials. However, this has been politically, legally and practically difficult to achieve.

A financially-innovative solution to the problem of new uses is to leverage the immediate and future cost savings of health insurers. In particular, the novel discipline of interventional pharmacoeconomics (IVPE) allows for self-funding clinical trials by comparing a low-cost intervention (such as a repurposed generic) to expensive standard of care.[6] The cost savings from patients taking the low-cost intervention in one arm can exceed the cost of the trial itself, even if it fails, which means there is no financial risk. However, an IVPE trial requires the substitution of the low-cost intervention for expensive standard of care, and may not be appropriate for all repurposing opportunities, especially where no expensive comparator intervention is available. For this latter situation, it is possible to use outcomes-based incentives similar to prizes called Pay-For-Success (PFS) contracts, Advance Market Commitments (AMC) [7], or Social Impact Bonds (SIBs).[8] Such “prize-like” incentives have been used to accelerate the development of Covid vaccines [9] and antibiotics [10], but not yet for repurposing generic drugs.

The IVPE concept has been called a ‘revolving research fund’ in Europe, where the cost-savings of clinical trials are used to fund additional research.[11] Similar cost-saving trials are also being funded by a consortium of health insurers in the Netherlands on a case-by-case basis.[12] It is hereby proposed that establishment of an IVPE + AMC fund by private or public health insurers can develop repurposed generic drugs, which can address the “financial toxicity” of new patented drugs while improving patient outcomes.[13] There are many known IVPE opportunities, for example, comparing repurposed generic IV ketamine to patented esketamine for treatment resistant depression [14] or off-label bevacizumab (Avastin) to ranibizumab (Lucentis) for macular degeneration.[15] There is an opportunity to discover and medically de-risk additional IVPE repurposing candidates for self-funding trials by conducting retrospective studies and meta-analyses of medical records and clinical data.