ABSTRACT
Financial considerations associated with accelerated NCE development
Reinforcing feedback mechanisms in pharmaceutical marketplaces Introducing network effects into the Standard Template Three periods of first mover advantage Using Dynamic Modeling to account for network effects Using simulation to quantify first mover advantage
Senior managers in pharmaceutical firms often face a difficult trade-off between cost and speed in new product development. Allocating additional resources to developing a compound for a specific therapeutic area can accelerate the process, but usually at a significant cost. For example, compound development times can be reduced by recruiting additional patients for clinical trials, running multiple trials to reduce the risk of the Food and Drug Administration (FDA) rejecting subsequent results, or developing multiple compounds in parallel to address a given indication with the expectation that only one or two will be successful. In fact, some researchers argue that pharmaceutical companies often start too few new
product approaches in a therapeutic category, given high rates of compound failure in the development process.1
