I have previous notes about Covance, a contract research organization (CRO) with special expertise relating to lab testing in controlled clinical trials. A recent article called attention to this company as well as other CROs and suggested that such firms are attracting more attention from investors (see: Drug-testing firms attracting more investors). Below is an excerpt from the article (boldface emphasis mine):
Increased regulatory scrutiny of new drug candidates in recent years has produced more business for companies that conduct clinical trials for pharmaceutical firms....But despite trading at historically high valuations, further growth is likely because of the rising number of lucrative post-market studies and as the sector becomes a shelter from a political storm that could target health care, many experts said. Growth of the research organizations has been powered by an increased number of clinical trials, thanks in part to a rise in outsourcing at pharmaceutical companies, which have been cutting costs as they face rising competition from generic medication, emptier product pipelines and a tougher regulatory environment....The big reason for optimism in the stocks is a relatively new phenomenon in the drug-approval process—the growth of post-market studies. These Phase IV studies, which track a drug after it receives Food and Drug Administration approval, are lucrative for the research organizations because the studies are large, long in duration and unlikely to be canceled.
In a previous note (see: DOD Will Share Electronic Medical Records with the FDA), I discussed how the FDA planned to interrogate DOD-supported electronic medical records in a program called the Sentinel Network in order to study the efficacy and safety of prescription drugs already approved for use, which is to say Phase IV studies. This current news reflects another response to the growing interest in monitoring drugs already on the market, this time describing the bullish interest in CROs for whom participation in such studies enhances their bottom lines.
Just to round out this note and to bring a few other points to bear on the discussion, here's how the Wikipedia defines Phase IV studies:
Phase IV trials involve the safety surveillance (pharmacovigilance) and ongoing technical support of a drug after it receives permission to be sold. Phase IV studies may be required by regulatory authorities or may be undertaken by the sponsoring company for competitive (finding a new market for the drug) or other reasons (for example, the drug may not have been tested for interactions with other drugs, or on certain population groups such as pregnant women, who are unlikely to subject themselves to trials). The safety surveillance is designed to detect any rare or long-term adverse effects over a much larger patient population and longer time period than was possible during the Phase I-III clinical trials. Harmful effects discovered by Phase IV trials may result in a drug being no longer sold, or restricted to certain uses: recent examples include cerivastatin (brand names Baycol and Lipobay), troglitazone (Rezulin) and rofecoxib (Vioxx).