Freakonomics of Drug Development

In their best-selling book Freakonomics, Levitt and Dubner look at the world through the lens of economics and demonstrate how incentives (how people get what they want or need) are the root of most everything around us.

So what are the Freakonomics of drug development? Where are the incentives?

Here is a good starting question -- If you work at a "sponsor" is the goal of your company to make medicine or to sell medicine?

I would argue that if you are at a start-up biotech, you are there to make medicines. Your company likely aspires to get a drug into clinical trials, but it is unlikely they would still own the drug by the time of registration and equally unlikely the company would transform into sales & marketing.

If you are at a large pharma, I would argue your company is there to sell medicine. To confirm this, look no further than the revenue cliff ahead for most pharma as patents expire. The anticipated drop in sales is what drives most current decision-making.

So where are the incentives for those in development? Does your company reward for new project starts (regardless of ultimate project value)? Does it reward for killing a project early? Does it reward for innovation and risk-taking?

If your company is ultimately seeking to bring new approved medicines to patients and the marketplace as quickly and safely as possible, it would seem most of these incentives are misaligned.

Co-posted from www.pharmasherpa.com