The Economics of New Drugs: Can We Afford to Make Progress in a Common Disease?

2013 ◽  
pp. e126-e130
Author(s):  
Bradford R. Hirsch ◽  
Kevin A. Schulman
Keyword(s):  
Drug Development ◽  
Cost Of Capital ◽  
New Drugs ◽  
Common Disease ◽  
Target Market ◽  
Sustainable Business ◽  
Product Pricing ◽  
Grant Support ◽  
To Come ◽  
The Cost

The concept of personalized medicine is beginning to come to fruition, but the cost of drug development is untenable today. To identify new initiatives that would support a more sustainable business model, the economics of drug development are analyzed, including the cost of drug development, cost of capital, target market size, returns to innovators at the product and firm levels, and, finally, product pricing. We argue that a quick fix is not available. Instead, a rethinking of the entire pharmaceutical development process is needed from the way that clinical trials are conducted, to the role of biomarkers in segmenting markets, to the use of grant support, and conditional approval to decrease the cost of capital. In aggregate, the opportunities abound.

scholarly journals SMALL MOLECULES SOLVING BIG PROBLEMS: PRESENT AND FUTURE OF DRUG DISCOVERY

2018 ◽  
Vol 9 (1) ◽  
Author(s):  
Anna Lucia Fallacara ◽  
Iuni Margaret Laura Tris ◽  
Amalia Belfiore ◽  
Maurizio Botta
Keyword(s):  
Drug Discovery ◽  
Drug Development ◽  
Small Molecules ◽  
Rational Design ◽  
Development Process ◽  
New Drugs ◽  
Drug Development Process ◽  
Development Models ◽  
The Past ◽  
The Cost

The Drug development process has undergone a great change over the years. The way, from haphazard discovery of new natural products with a potent biological activity to a rational design of small molecule effective against a selected target, has been long and sprinkled with difficulties. The oldest drug development models are widely perceived as opaque and inefficient, with the cost of research and development continuing to rise even if the production of new drugs remains constant. The present paper, will give an overview of the principles, approaches, processes, and status of drug discovery today with an eye towards the past and the future.

scholarly journals Incorporating Pharmacometrics into Pharmacoeconomic Models: Applications from Drug Development

2020 ◽  
Vol 38 (10) ◽  
pp. 1031-1042 ◽  
Author(s):  
Meenakshi Srinivasan ◽  
Annesha White ◽  
Ayyappa Chaturvedula ◽  
Valvanera Vozmediano ◽  
Stephan Schmidt ◽  
...  
Keyword(s):  
Cost Effectiveness ◽  
Drug Development ◽  
Economic Value ◽  
New Drugs ◽  
Specific Patient ◽  
Dose Concentration ◽  
Mechanistic Basis ◽  
Pricing And Reimbursement ◽  
The Cost ◽  
The Impact

Abstract Pharmacometrics is the science of quantifying the relationship between the pharmacokinetics and pharmacodynamics of drugs in combination with disease models and trial information to aid in drug development and dosing optimization for clinical practice. Considering the variability in the dose–concentration–effect relationship of drugs, an opportunity exists in linking pharmacokinetic and pharmacodynamic model-based estimates with pharmacoeconomic models. This link may provide early estimates of the cost effectiveness of drug therapies, thus informing late-stage drug development, pricing, and reimbursement decisions. Published case studies have demonstrated how integrated pharmacokinetic–pharmacodynamic–pharmacoeconomic models can complement traditional pharmacoeconomic analyses by identifying the impact of specific patient sub-groups, dose, dosing schedules, and adherence on the cost effectiveness of drugs, thus providing a mechanistic basis to predict the economic value of new drugs. Greater collaboration between the pharmacoeconomics and pharmacometrics community can enable methodological improvements in pharmacokinetic–pharmacodynamic–pharmacoeconomic models to support drug development.

Drug development risk and the cost of capital

2012 ◽  
Vol 11 (5) ◽  
pp. 347-348 ◽  
Author(s):  
Aris I. Baras ◽  
Alex S. Baras ◽  
Kevin A. Schulman
Keyword(s):  
Drug Development ◽  
Cost Of Capital ◽  
The Cost ◽  
Development Risk

The Cost of Capital for Financial Firms

2006 ◽  
Vol 12 (1) ◽  
pp. 229-283 ◽  
Author(s):  
C. J. Exley ◽  
A. D. Smith
Keyword(s):  
Capital Structure ◽  
Performance Measurement ◽  
Classical Theory ◽  
Cost Of Capital ◽  
Financial Firms ◽  
Product Pricing ◽  
Insurance Firms ◽  
The Cost ◽  
Special Case

ABSTRACTMost businesses have assets financed by capital providers. The cost of capital is a measure of the returns required by those capital providers. Its main use is to set a target for the profits, which must be achieved on the firm's assets in order to satisfy equity and bond holders.This paper describes the classical theory of the cost of capital, and then applies it to the special case of banking and insurance firms. We develop implications for product pricing, performance measurement and capital structure optimisation.

Medical Innovation Then and Now: Perspectives of Innovators Responsible for Transformative Drugs

2014 ◽  
Vol 42 (4) ◽  
pp. 564-575 ◽  
Author(s):  
Shuai Xu ◽  
Aaron S. Kesselheim
Keyword(s):  
Pharmaceutical Industry ◽  
Drug Development ◽  
Patient Outcomes ◽  
New Drugs ◽  
Medical Innovation ◽  
Phase 3 ◽  
Current State ◽  
Innovation Output ◽  
The Cost ◽  
Ongoing Concern

The discovery and development of new therapeutics has always been central to improving health worldwide. However, there is ongoing concern regarding the current state of medical innovation. Output from the pharmaceutical industry has been criticized for not being “transformative,” that is, offering substantial improvements in patient outcomes over existing therapeutics. While the cost of drug development continues to rise, breakthrough therapies remain elusive and one half of Phase 3 studies fail. Venture capital, a traditional source of funding for new breakthrough biomedical innovations, has decreased investment by 30% in the biotechnology and medical device sectors from 2007 to 2013. Stakeholders question whether the new drugs approved each year by the FDA —many criticized as marginal improvements over existing therapies — justify the enormous investment.

scholarly journals Clinical Trials in a Dish: A Perspective on the Coming Revolution in Drug Development

2018 ◽  
Vol 23 (8) ◽  
pp. 765-776 ◽  
Author(s):  
Bernard Fermini ◽  
Shawn T. Coyne ◽  
Kevin P. Coyne
Keyword(s):  
Clinical Trials ◽  
Drug Development ◽  
Clinical Development ◽  
New Drugs ◽  
Attrition Rate ◽  
Preclinical Drug Development ◽  
Current Article ◽  
Induced Pluripotent ◽  
The Cost ◽  
Further Development

The pharmaceutical industry is facing unprecedented challenges as the cost of developing new drugs has reached unsustainable levels, fueled in large parts by a high attrition rate in clinical development. Strategies to bridge studies between preclinical testing and clinical trials are needed to reduce the knowledge gap and allow earlier decisions to be made on the continuation or discontinuation of further development of drugs. The discovery and development of human induced pluripotent stem cells (hiPSCs) have opened up new avenues that support the concept of screening for cell-based safety and toxicity at the level of a population. This approach, termed “Clinical Trials in a Dish” (CTiD), allows testing medical therapies for safety or efficacy on cells collected from a representative sample of human patients, before moving into actual clinical trials. It can be applied to the development of drugs for specific populations, and it allows predicting not only the magnitude of effects but also the incidence of patients in a population who will benefit or be harmed by these drugs. This, in turn, can lead to the selection of safer drugs to move into clinical development, resulting in a reduction in attrition. The current article offers a perspective of this new model for “humanized” preclinical drug development.

Drug Development and the Cost of Capital

2014 ◽  
pp. 35-47 ◽  
Author(s):  
Kraig F. Schulz ◽  
Sarah T. Bobulsky ◽  
Frank S. David ◽  
Nitin R. Patel ◽  
Zoran Antonijevic
Keyword(s):  
Drug Development ◽  
Cost Of Capital ◽  
The Cost

Value and Cost of Myeloma Therapy—We Can Afford It

2018 ◽  
pp. 647-655 ◽  
Author(s):  
Rafael Fonseca ◽  
Jennifer Hinkel
Keyword(s):  
United States ◽  
Drug Development ◽  
The United States ◽  
Cost Of Care ◽  
New Drugs ◽  
Direct Benefit ◽  
Price Controls ◽  
Oral Medications ◽  
National Conversation ◽  
The Cost

A national conversation regarding the price and affordability of drugs exists, where concern for value and benefits of medications is challenged by the increasing price of both injectable and oral medications, including the cost of care of myeloma. At the same time, we have seen unprecedented improvements in the overall survival of patients with myeloma, mostly because of the availability of these new drugs. Here, we present data to assert that these medications and associated expenses are of direct benefit to patients and society. The entrepreneurial reward for drug development in the United States has fueled vigorous drug development efforts that have culminated in the approval of 11 new drugs for the treatment of myeloma by the U.S. Food and Drug Administration (FDA) since 1999. These patented drugs are available to patients in the United States usually at a higher price than in the rest of the world. Nevertheless, the majority of patients, via direct copay assistance or through indirect support via third parties, have access to these drugs irrespective of their socioeconomic status. One of the major regulatory hurdles that prevents access to these drugs is the legal impossibility that pharmaceutical companies have in directly supporting copay assistance for patients with government-funded health care. Moreover, assessments of value should include formal pharmacoeconomic analyses performed by experts. Interference with market forces and coercive action, such as price controls, or exercising eminent domain in the quest for cheaper medications will stymie innovation and rob us of the cures of the future.

scholarly journals The academic model: Drug discovery in the academic environment

2012 ◽  
Vol 34 (1) ◽  
pp. 4-6
Author(s):  
Peter R. Shepherd ◽  
William A. Denny
Keyword(s):  
Chemical Space ◽  
New Drugs ◽  
Scientific Methods ◽  
Chemical Structures ◽  
Drug Companies ◽  
Wide Range ◽  
Life Threatening ◽  
Model Drug ◽  
To Come ◽  
The Cost

The second half of the 20th Century was a golden age for the pharmaceutical industry, as ever increasingly sophisticated scientific methods were applied to the process of discovering new drugs and then developing them through the pre-clinical and clinical phases. This was very fruitful, scientifically and financially, with a wide range of highly successful new drugs being developed. These included blockbusters such as the very effective cholesterol-lowering drugs such as Lipitor®, which contributed significantly to the reduced rates of mortality from cardiovascular disease, through to drugs such as Viagra® that treated less life-threatening, but socially important, conditions. In the 1970s and 1980s, the pharma industry employed a high percentage of biochemistry graduates and provided jobs that paid well and seemed to have good security. Inevitably, however, as the older blockbusters began to come off patent, a technological ‘arms race’ broke out as companies searched randomly further and further into chemical space to find chemical structures that might be the elusive new blockbuster drug. Companies built bigger and bigger libraries of drugs, in many cases containing more than a million compounds. These required impressive assay technology and massive robotic screens to sift through. At the same time, the cost of getting drugs to market was increasing due to ever-tightening safety regulations, and, despite the application of ever more technology, the failure rate in (and after) clinical trial remained stubbornly high.

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