Agenda for Economic Analysis of Pharmaceutical R&D A Preliminary Analysis of Survival Rate and Duration in the Development Process
Takeshi Yamada (Associate Professor, Faculty of Commerce and Economics, Chiba University of Commerce and Business)
Satoshi Nakanishi (Associate Professor and The Office of Pharmaceutical Industry Research Chief Researcher, Department of Economics, Nihon Fukushi University)
Kazufumi Ohashi ( The Office of Pharmaceutical Industry Research Senior Research Fellow*)
Shinpei Tandoh ( The Office of Pharmaceutical Industry Research Senior Research Fellow)
(No.4: Published in January 2000)
Despite the fact that the pharmaceutical industry invests large amounts of money in R&D and the development cost of each project is extremely high and the probability of success is low, there has been little economic research on the productivity of such R&D. This study examines the productivity of the pharmaceutical industry by examining the relationship between the development cost of a product and its marketed product database. In this study, we measured the development period and probability of success from 1980 to 1999 using data on individual products based on a commercially available database of products under development, and analyzed the effects on productivity of the nature of the product under development (in-licensed product/in-house product, by therapeutic area, newly developed/expanded indication), the nature of the company (company size), the system, and regulations (review period). The results showed that in-licensed products were more successful than in-house products. As a result, it was verified that in-licensed products have a higher probability of success than in-house products, that there are considerable differences in development time and probability of success by therapeutic area, and that the probability of success for the expansion of indications is much higher than that for new development. These results suggest that when promoting R&D, it is necessary to construct a portfolio that takes into account the nature of the developed product.