The Future Costs, Risks and Rewards of Drug Development

Joseph Cook, Graeme Hunter and John Vernon ()

PharmacoEconomics, 2009, vol. 27, issue 5, 355-363

Abstract: This article discusses the evolving field of pharmacogenomics, which is the science of using genomic markers to predict drug response, and how it may impact the future costs, risks and returns to pharmaceutical research and development (R&D). We uncover a number of factors and issues that are likely to influence the expected returns and, hence, the incentive to invest in new pharmaceutical R&D in tandem with the development of pharmacogenomics. Specifically, we identify how pharmacogenomics may lower the cost of drug development by shortening drug development times. Thus, pharmacogenomics may lead to an increase in a drug’s effective patent life, and may also increase the demand and adoption rate for new products. For these and other reasons, pharmacogenomics may one day enhance expected future returns to R&D, leading to higher levels of R&D investment and an increased pace of pharmaceutical innovation. Our conclusions must be read with much caution, however, as there is considerable uncertainty as to how the area will evolve, both clinically and economically. The time horizon necessary for the science to develop and be adopted into clinical practice is not clear. Nevertheless, we think the issues and factors outlined in this article shed light on possible future economic outcomes and changes in the industry’s structure, conduct and performance. Hopefully, this will provide researchers with avenues to pursue regarding a better understanding of the economics of pharmacogenomics. Copyright Adis Data Information BV 2009

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.2165/00019053-200927050-00001 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:pharme:v:27:y:2009:i:5:p:355-363

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40273

DOI: 10.2165/00019053-200927050-00001

Access Statistics for this article

PharmacoEconomics is currently edited by Timothy Wrightson and Christopher I. Carswell

More articles in PharmacoEconomics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().