On Friday, Novartis Novartisannounced that its anti-IL17A antibody secukinumab (Cosentyx) demonstrated clear superiority over its rival, Stelara ustekinumab from Johnson & Johnson Johnson & Johnson, an antibody against IL-12 and IL-23, in the treatment of psoriasis.

What marks this out as significant is not the potential commercial impact for $NVS, nor the step-change in efficacy this delivers for patients suffering from psoriasis though quite clearly both are true.

Instead, its the commitment prior to approval to test the drug head-to-head against arguably its stiffest competitor. This kind of direct comparison is exactly what the medical profession needs without it, doctors are left with two comparable sets of data from different trial designs and little hope of determining which agent is most suited to the patient in front of them. But the industry has, in the past, been very wary of providing such unequivocal comparative evidence.

Changes, though, are being forced on drug companies. Whereas once upon a time, regulatory approval alone was sufficient to secure meaningful sales, increasingly that is no longer true. Even after the stiff battle with regulators has been won, new product launches today face an arguably even stiffer test: to win over doctors and payers.

While the options for treatment for a particular disease were limited, knowing a drug was safe and effective (the hurdles for regulatory approval) is sufficient to justify use. But almost every large indication today already boasts a slew of approved therapeutics options, all of which are safe and effective. Against such a landscape, it is increasingly obvious that driving significant use requires direct comparison trials such as the CLEAR trial in psoriasis that Novartis reported last week.

Such trial designs are double-edged swords however success will surely drive sales of the new agent, but failure to demonstrate superiority would equally certainly consign the expensively-approved newcomer to the trash can. How many people want to play double or quits with their newly-approved (or, worse still, perhaps, not-yet-approved) blockbuster candidate?

In an industry renowned for its conservative decision-making, its not surprising that owners of newly-launched drugs have tended to test the water first, and only resort to comparative trials if sales are low and slow. With Crestor rosuvastatin, for example, where AstraZeneca AstraZenecawere already selling more than $5billion a year of product, head-to-head comparison with its competitor Lipitor atorvastatin were only contemplated more than five years after approval when the impending loss of patent protection for atorvastatin threatened Crestor sales. Even when those trials failed to demonstrate any material superiority, the established sales were unaffected. That hardly counts as risk-taking.

But $NVS adopted an entirely different strategy with Cosentyx. Comparitor trials were the mainstay of the late-stage development program, rather than an afterthought. First, in 2013, in the FIXTURE study, they demonstrated superiority over an anti-TNF product, Enbrel etanercept from Amgen Amgenin a head-to-head study. With that scalp under their belt, they set their sights on the then newly-approved Stelara ustekinumab. The CLEAR study is the product of that strategy, and with the demonstrated superiority completely vindicates it.

Lets be in no doubt: this brave new world is very much to the advantage of patients and payers. Better comparator data will, in itself, lead to better outcomes and saved dollars.

It may not, however, be universally such good news for the pharmaceutical industry. The biggest drag on capital efficiency in R&D is late risk that is, risk that can only be discharged at the end of the development cycle, when the vast majority of the costs have already been expended. Failure at the end of development, or worse still, in the marketplace, erodes capital returns very quickly. If the industry is forced (by the commercial landscape, rather than by regulators) to do more comparator studies of this type, then more late-stage failures will be the order of the day.

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Is This The Future Of Late-Stage Drug Development?