Economics of Stratified Medicine
Challenge: Stratified, or “personalized” medicine involves proactively testing and selecting subsets of populations for treatment based on a likely positive or negative therapeutic response. Stratification is driving a trend from the development of blockbusters to “niche-busters,” which could fundamentally alter the nature of competition in the biomedical industry. Although individual case studies of particular instances have received much attention, a rigorous analysis of the economic and financial implications of increasingly stratified medicines for industry structure, profitability, competitive dynamics and long-term sustainability has yet to be publicly performed and disseminated.
Approach:
- Define innovative value metrics for stratified medicine products that combine clinical biomarker/diagnostic with therapeutic agents
- Develop pricing models based on new value metrics models
- Develop simulation models for alternative development plans for joint development of combined diagnostic/therapeutic products in order to define approaches that reduce cost, time, and regulatory risk
- Test and refine simulation models to establish validated tools that enable corporate decision-making and guide policy on issues related to stratified medicine across the value chain.
Principal Investigator: Ernst Berndt, PhD, Louis E. Seley Professor of Applied Economics, MIT
Collaborator: Mark Trusheim, President, Co-Bio Consulting, LLC
