A direct link between pre-clinical expenditures and the specific drug that ends up being commercialized is difficult to establish. For biopharmaceuticals, DiMasi and Grabowski (2007) estimate the average out-of-pocket cost of pre-clinical development that includes expenditures for both basic research and pre-clinical development at $59.9 million
Analytical Framework for Examining the Value of Antibacterial Products. 3.2.1 Real Opportunity Cost of Capital
The real opportunity cost of capital represents the rate of return (net of inflation) that the drug sponsor would otherwise be able to earn at the same risk level as the investment in the new antibacterial drug that has been selected. The cost of capital rates used by the pharmaceutical sector reported in the literature range from a low of 9 per
Analytical Framework for Examining the Value of Antibacterial Products. 3.2 Antibacterial Drug Private ENPV Model Parameters and Assumptions
Table 4 presents the point estimates for the private ENPV model parameters and assumptions. The following sections discuss the basis for these estimates in further detail.
Analytical Framework for Examining the Value of Antibacterial Products. 3.1 Expected Net Present Value (ENPV) Framework For Evaluating Private Returns
Drug development activities include early stage research and development (R&D), pre-clinical and clinical research as well as supply chain related efforts (such as sample preparation, process research development, manufacturing plant design) (see Figure 1 for a stylized depiction of the drug development process). Each of these activities inv
As depicted in Table 3, there are a number of approaches that might prolong the useful lives of antibacterial drugs through stewardship, appropriate use, and conservation. All of these goals are important for public health. However, from the perspective of the antibacterial drug developer, all of these programs reduce demand for their products
Analytical Framework for Examining the Value of Antibacterial Products. 2.1.4 Grants/Awards/Prizes for Antibacterial Product Research and Development
International-level support for research occurs primarily through public research institutions.
Analytical Framework for Examining the Value of Antibacterial Products. 2.1.3 Modifications to the Clinical Trial Process and Approval Standards
This incentive encompasses a number of ideas intended to streamline the clinical trial and drug approval processes for antibacterial drugs in order to shorten the timelines and, in turn, reduce the costs associated with developing these drugs. Easing the development requirements could reduce development costs by shortening the time to market for
Tax incentives for antibacterial product R&D can take many forms, including (but not limited to) the following:
Analytical Framework for Examining the Value of Antibacterial Products. 2.1.1 Intellectual Property (IP) Protection Extensions
We use the term “intellectual property (IP) protection extensions” to encompass patent/data exclusivity (DE), marketing exclusivity (ME), patent term adjustments (PTAs), patent term extensions (PTEs), and supplementary protection certificates (SPCs); all of which serve to increase drug developer revenues and hence private NPV, by barring gener
Analytical Framework for Examining the Value of Antibacterial Products. 2 Incentives for Developing Antibacterial Drugs, Vaccines for Bacterial Diseases, and Rapid Diagnostics
The literature is replete with possible incentives to stimulate new antibacterial product development. Additionally, the recently enacted Title VIII (Generating Antibiotic Incentives Now) of the Food and Drug Administration Safety and Innovation Act (Public Law 112-144)(GAIN), creates incentives to encourage the development of antibacterial or a
For constructing our EPV model, we compiled information from a variety of sources, including:
There are two primary objectives to this study: 1) the creation of an economic framework for antibacterial drug development decisions and 2) the assessment of the impact of various incentives on their development. As secondary objectives, this study creates a similar framework for the development of vaccines and rapid point of care diagnostics a
Modern medicine relies on effective antibacterial drugs, vaccines, and rapid diagnostic tools, collectively referred to as “antibacterial products” hereinafter, for the prevention, detection, and treatment of bacterial infections. Since antibacterial drugs first came into use in the 1940s, they have transformed mankind’s ability to combat
Antibacterial resistance is a growing global problem. According to the most recent statistics from the Centers for Disease Control and Prevention (CDC), at least 2 million people acquire serious infections with bacteria that are resistant to one or more of antibacterial drugs designed to treat those infections in the United States alone. Of th
We gratefully acknowledge Hui-Hsing Wong (ASPE) and Amber Jessup (ASPE) for their leadership, guidance, and input throughout this study. We also would like to thank Edward Cox (FDA) and Michael Lanthier (FDA) for their insightful comments, advice, and guidance. IMS Health provided the sales data for the analysis of antibacterials designed to t
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