Browsing by Author "DiMasi, Joseph A"
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Item Open Access Economics of new oncology drug development.(J Clin Oncol, 2007-01-10) DiMasi, Joseph A; Grabowski, Henry GPURPOSE: Review existing studies and provide new results on the development, regulatory, and market aspects of new oncology drug development. METHODS: We utilized data from the US Food and Drug Administration (FDA), company surveys, and publicly available commercial business intelligence databases on new oncology drugs approved in the United States and on investigational oncology drugs to estimate average development and regulatory approval times, clinical approval success rates, first-in-class status, and global market diffusion. RESULTS: We found that approved new oncology drugs to have a disproportionately high share of FDA priority review ratings, of orphan drug designations at approval, and of drugs that were granted inclusion in at least one of the FDA's expedited access programs. US regulatory approval times were shorter, on average, for oncology drugs (0.5 years), but US clinical development times were longer on average (1.5 years). Clinical approval success rates were similar for oncology and other drugs, but proportionately more of the oncology failures reached expensive late-stage clinical testing before being abandoned. In relation to other drugs, new oncology drug approvals were more often first-in-class and diffused more widely across important international markets. CONCLUSION: The market success of oncology drugs has induced a substantial amount of investment in oncology drug development in the last decade or so. However, given the great need for further progress, the extent to which efforts to develop new oncology drugs will grow depends on future public-sector investment in basic research, developments in translational medicine, and regulatory reforms that advance drug-development science.Item Open Access Extraordinary Claims Require Extraordinary Evidence(Journal of Health Economics, 2005) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GItem Open Access Innovation in the pharmaceutical industry: New estimates of R&D costs.(J Health Econ, 2016-05) DiMasi, Joseph A; Grabowski, Henry G; Hansen, Ronald WThe research and development costs of 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug and biologics development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per approved new compound is $1395 million (2013 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 10.5% yields a total pre-approval cost estimate of $2558 million (2013 dollars). When compared to the results of the previous study in this series, total capitalized costs were shown to have increased at an annual rate of 8.5% above general price inflation. Adding an estimate of post-approval R&D costs increases the cost estimate to $2870 million (2013 dollars).Item Open Access R&d Costs, Innovative Output and Firm Size in the Pharmaceutical Industry(International Journal of the Economics of Business, 1995-01-01) DiMasi, Joseph A; Vernon, John; Grabowski, HenryThis study examines the relationships between firm size, R&D costs and output in the pharmaceutical industry. Project-level data from a survey of 12 US-owned pharmaceutical firms on drug development costs, development phase lengths and failure rates are used to determine estimates of the R&D cost of new drug development by firm size. Firms in the sample are grouped into three size categories, according to their pharmaceutical sales at the beginning of the study period. The D&D cost per new drug approved in the US is shown to decrease with firm size, while sales per new drug approved are shown to increase markedly with firm size. Sales distributions are highly skewed and suggest that firms need to search for blockbuster drugs with above-average returns. The results are consistent with substantial economies of scale in pharmaceutical R&D, particularly at the discovery and preclinical development phases. © 1995, Taylor & Francis Group, LLC. All rights reserved.Item Open Access Setting the Record Straight on Setting the Record Straight: Response to Light and Warburton's Rejoiner(Journal of Health Economics, 2005) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GItem Open Access The cost of drug development.(N Engl J Med, 2015-05-14) DiMasi, Joseph A; Grabowski, Henry G; Hansen, Ronald WItem Open Access The price of innovation: new estimates of drug development costs.(J Health Econ, 2003-03) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GThe research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.Item Open Access The roles of patents and research and development incentives in biopharmaceutical innovation.(Health Aff (Millwood), 2015-02) Grabowski, Henry G; DiMasi, Joseph A; Long, GeniaPatents and other forms of intellectual property protection play essential roles in encouraging innovation in biopharmaceuticals. As part of the "21st Century Cures" initiative, Congress is reviewing the policy mechanisms designed to accelerate the discovery, development, and delivery of new treatments. Debate continues about how best to balance patent and intellectual property incentives to encourage innovation, on the one hand, and generic utilization and price competition, on the other hand. We review the current framework for accomplishing these dual objectives and the important role of patents and regulatory exclusivity (together, the patent-based system), given the lengthy, costly, and risky biopharmaceutical research and development process. We summarize existing targeted incentives, such as for orphan drugs and neglected diseases, and we consider the pros and cons of proposed voluntary or mandatory alternatives to the patent-based system, such as prizes and government research and development contracting. We conclude that patents and regulatory exclusivity provisions are likely to remain the core approach to providing incentives for biopharmaceutical research and development. However, prizes and other voluntary supplements could play a useful role in addressing unmet needs and gaps in specific circumstances.