Working Paper: NBER ID: w24026
Authors: Amitabh Chandra; Craig Garthwaite; Ariel Dora Stern
Abstract: Precision medicines – therapies that rely on the use of genetic, epigenetic, and protein biomarkers – create a better match between patients with specific disease subtypes and medications that are more effective for those patients. This heterogeneity in response has implications for the decision to develop therapies, their pricing, the design of clinical trials, and the relative importance of smaller biotech companies versus more traditional companies in pursuing early stage R&D. To understand the scope of these effects, we use a comprehensive database of over 130,000 global clinical trials and describe the drug development pipeline for precision medicines over the past two decades. We identify clinical trials for likely precision medicines (LPMs) as those that use one or more relevant biomarkers. We then further segment trials based on the nature of the biomarker(s) used and other trial features with economic implications. Since cancers represent a disease setting in which precision therapies are already successfully used, and since cancer applications of precision medicine are expected to grow rapidly over the coming years, we separately characterize cancer LPMs. Finally, we consider the types of firms pursuing R&D in precision medicines, considering how LPM R&D activities have evolved over recent years.
Keywords: Precision Medicine; Drug Development; Biomarkers; Clinical Trials
JEL Codes: I15; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| biomarker use (L65) | drug development outcomes (O32) |
| economic incentives for manufacturers (L60) | decision-making process regarding new drugs (D87) |
| precision medicines (L65) | brand competition in smaller markets (L19) |
| biomarker use (L65) | indication-based pricing (L11) |