SUMMARY
The increasingly cost-conscious nature of formulary decisions and the willingness of reimbursers to reject a drug for listing on budget impact
grounds means that drug companies must address the issue of affordability at a very early stage in the drug development process.
If correctly applied, health economics techniques will deliver a product unit price which creates a win-win situation between the manufacturer and
the purchaser or prescriber of the drug, thus ensuring early product reimbursement, rapid product uptake and maximum market share.
Health Economics in the Drug Life Cycle - achieving success in drug discovery, development, reimbursement and marketing, a 75,000 word report from
Urch Publishing identifies the clusters of health economic activities which should accompany drug development from discovery through to marketing
approval and then market reimbursement, market entry and the support of the product through the product life cycle. This unique report shows how
health economics can create substantial added-value, as well as providing the basis for early decisions to continue or abandon product development.
Packed with strategic advice, Health Economics in the Drug Development Life Cycle is written by Dr Paul C Langley, a leading expect in successfully
applying health economics in both early development and reimbursement activities.
The Business Opportunity Assessment (BOA)
A Business Opportunity Assessment is a spreadsheet model that attempts to project, over the life cycle of the product, annual cost and revenue
streams as the basis for an evaluation of the rate of return from investing in that product.
A well prepared BOA should be transparent and involves;
- Identifying and projecting the product life cycle annual treatment prevalence for a disease state;
- Identifying and projecting the current direct costs of treating patients in that disease state (medical and pharmacy costs);
- Identifying and projecting patient switching scenarios over the product life cycle;
- Identifying and projecting development costs, reimbursement and sales and advertising costs; and
- Identifying and projecting sales revenues at contract prices.
This report clearly describes the methodology used to generate a sound BOA which will underpin decision making in drug development.
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