Innovation in Drug Research and Development for Prevalent Chronic Diseases Proceedings of a Workshop (2021) / Chapter Skim
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4 Investment and Incentives
4 Investment and Incentives
Pages 29-38
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From page 29... ...
(Axelsen, Schaeffer) • Drug development decisions balance the cost versus the likely benefit of developing a particular drug for a particular disease, with the potential market size for the drug being a crucial fac tor.
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Kirsten Axelsen, an independent consultant and visiting scholar at the American Enterprise Institute, offered a primer on the economics of drug development, with a focus on factors that influence investment decisions. Russ Paulsen, chief operating officer of UsAgainstAlzheimer's, described some of the investment challenges using AD as a case study.
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SOURCES: Presented by Susan Schaeffer on February 22, 2021, at the Innovation in Drug Research and Development for Prevalent Chronic Diseases workshop; BioCentury's BCIQ database.
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DRUG DEVELOPMENT ECONOMICS 101 Axelsen offered a broad view of the considerations that shape investment decisions for drug development. Fundamentally, she said, drug development decisions balance the cost versus the likely benefit -- including improved outcomes for patients and return on investment for drug sponsors -- of developing a particular drug for a particular disease, with the potential market size for the drug being a crucial factor.
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In closing, Axelsen pointed to the rapid development of COVID-19 vaccines, which was spurred by a confluence of factors needed for rapid drug development: a belief that a market for the intervention exists, a mechanism for reimbursement, regulatory flexibility, and governments willing to pay for it. CASE STUDY: ALZHEIMER'S DISEASE Paulsen offered his perspective on funding for developing treatments for prevalent chronic diseases by discussing why it has been difficult to innovate in one particular chronic disease: AD.
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From page 34... ...
Knowledge de-risks the development of new drugs and diagnostics, and investment follows, which has worked for some therapeutic areas, Paulsen said. However, for AD and other prevalent chronic diseases, limited understanding of the underlying biology and lack of good biomarkers have made it difficult to get funding at all stages of R&D.
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From page 35... ...
Research programs fail for a variety of reasons, often related to unanticipated side effects, low tolerability of the drug, and so on, but Mellad said he believes many of these could be circumvented in ways that could encourage more investment in startups focused on innovative products. One of the major trends Mellad sees is the shift toward personalized health care.
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From page 36... ...
. When considering how to address prevalent chronic diseases, such as obesity, more effectively and at a lower cost, Ehlert agreed with other workshop speakers that early intervention is best to slow the progression of 3 For more information, see http://enhanc3dgenomics.com (accessed June 29, 2021)
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When considering approaches to cut costs and development time for drug R&D, Ehlert suggested that developers and other stakeholders in R&D move beyond thinking in terms of trying to treat 30 percent of the market with one therapy and instead find ways to treat segments of the population. For example, large pragmatic trials that include participants with comorbidities who are taking multiple medications, he said, could lead to a better clinical understanding at the time of marketing approval for how new treatments can best be used in individual patients.
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From page 38... ...
2014. Multiple chronic conditions and life expectancy: A life table analysis.
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