Market Barriers to the Development of Pharmacotherapies for the Treatment of Cocaine Abuse and Addiction: Final Report. Market Analysis for a Prospective Cocaine Medication


The market analysis estimates how costs and revenues accrue over time in the development and commercialization of a prospective cocaine medication, and presents plausible scenarios of prospective pharmaceutical companies and their drug development decisionmaking process. For pharmaceutical companies, the risk associated with developing and marketing a cocaine medication is considerable. While it is possible to construct plausible scenarios in which half a million patients per day would be using a cocaine medication, a user population that is half or one quarter this size is more plausible. Notwithstanding recent advances in the science base for cocaine addiction pharmacotherapies, it is unrealistic to expect most pharmaceutical firms to consider investing in such products in the near future.

In general, pharmaceutical firms seek competitive returns on their investment. As noted above, one threshold used in the industry is the net present value (NPV) of the product. Another financial threshold used by pharmaceutical firms is a drug's expected peak annual revenue (PAR). A conservative threshold target PAR for a prospective new product in the pharmaceutical industry is about $200 million for a single drug, although the larger companies tend to seek PARs of $250 to 500 million or more. This report uses a market model to analyze the NPV using plausible estimates of relevant parameters, including market size, market penetration, costs of developing a medication, and price. This model is presented and discussed later in this document.

This section provides national estimates of drug abuse in general and for cocaine abuse in particular; national expenditures for alcohol and drug abuse, and for cocaine abuse and addiction; payment sources for cocaine treatment; and a scenario involving potential revenues for a potential pharmacotherapy for cocaine abuse and addiction.