NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Characterizing the Drug Development Pipeline for Precision Medicines

Amitabh Chandra, Craig Garthwaite, Ariel Dora Stern

NBER Working Paper No. 24026
Issued in November 2017
NBER Program(s):Health Care, Industrial Organization, Public Economics, Productivity, Innovation, and Entrepreneurship

Precision medicines – therapies that rely on genetic, epigenetic, and protein biomarkers – create a better match between individuals with specific disease subtypes and medications that are more effective for those patients. These treatments are expected to be both more effective and more expensive than conventional therapies, implying that their introduction is likely to have a meaningful effect on health care spending patterns. In addition, precision medicines can change the expected profitability of therapies both by allowing more sophisticated pricing systems and potentially decreasing the costs of drug development through shorter and more focused trials. As a result, this could change the types of products that can be profitably brought to market. To better understand the landscape of precision medicines, we use a comprehensive database of over 130,000 global clinical trials, over the past two decades. We identify clinical trials for likely precision medicines (LPMs) as those that use one or more relevant biomarkers. We then further segment trials based on the nature of the biomarker(s) used and other trial features with economic implications. Given potential changes in the incentives for bringing products to market, we also examine the relative importance of public agencies such as the National Institutes of Health (NIH) and different types of private firms in developing precision medicines.

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Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24026

Forthcoming: Characterizing the Drug Development Pipeline for Precision Medicines, Amitabh Chandra, Craig Garthwaite, Ariel Dora Stern. in Economic Dimensions of Personalized and Precision Medicine, Berndt, Goldman, and Rowe. 2018

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