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ANLAYSIS AT BAYER
PHARMACEUTICALS
Time consuming
Resource intensive
Risky
Heavily regulated
3 phases
Methodology
Combined the leadership committee with cross functional project team.
Members of the project team4 research scientists
1 clinician
1 regulator
1 production engineer
1 industrial engineer
1 marketer
1 decision analyst
Commercial evaluation
methodology and process
1st meeting
1. Defined the scope and purpose of the project
2. Developed team ownership of the project &
3. Discussed various perspectives related to the project
Commercial evaluation
methodology and process
Techniques used
brainstorming,
back-casting, and
role-playing techniques to uncover additional issues.
INFLUENCE DIAGRAM
Commercial evaluation
methodology and process
Data collected after the meeting includes
1. Time
2. funds needed to develop BAY 57-9602;
3. the likelihood of BAY 57-9602 succeeding in each stage of
development;
4. the cost of manufacturing and marketing it; and
5. the size of the PAO market and BAY 57-9602's potential share
of that market. T
Decision point 1
Preclinical drug development
o Estimated that the preclinical drug development would cost around $1
million and take about 24 months
o Probability of technical success (PTS)
o (animal data should be safe and efficacious)
o Each scientist was asked to estimate the probability of success of BAY 57-9602
(average 65%)
Decision Point 2
Clinical Drug Development
(Testing in humans)
o Most expensive stage
o Phase 1: to test the safety of the drug
o Phase 2: to identify the optimal dose to be
used in phase 3
o Phase 3: Statistically designed study for proving efficacy clinical end point or
safety clinical end point
o Clinical development plan is devised
o 2 types of costs: 1. External costs
2. Internal costs
What is estimated?
o
o
o
o
Phase 1
Approx 12 months
Phase 2
Approx 18 months
Phase 3
Approx 30 months
Safety end point
Approx 36 months
Production Process
Developement
DP 3 and DP 4
o Higher yield results in lower labor costs, material costs and plasma costs
o Pharma assumes that capital investment for the production for the production
facility occurs approximately five years before the launch date
Pricing
o $2000-$4000- thrombolytic drug therapy in US
o Therapy in USA=therapy in Canada
o Cost of Europe=1/2 cost of US
o Cost of Japan=3/4 cost of US
o Market believed that BAY 57-9602 could demand 20% over
thrombolytic drugs
Conclusion
o Presented BAY 57-9602 in three levels of pharma decision makers
o November 1999- BP leadership committee awarded DP1 status to
BAY 57-9602
o January 2000 BP began preclinical development
Regulatory Approval
o Pharma PTS benchmark of 90%
o According to the regulator, BAY 57-9602 must obtain fast track
submission before receiving a fast track review of the biological
license application
BAY 57-9602
obtaining fast
track submission
was 75%
6
months
12
months
60%
40%
Marketing
o Bayer estimates that the marketing cost of BAY 57-9602 <
marketing cost of an asthma drug since fewer physicians treat
PAO than treat asthma
o BAY 57-9602 could be launched in 8 countries: US, Canada,
France, Germany, Italy, Spain, UK and Japan
Europe (40%)
Japan (25%)
Competition
o If BAY 57-9602 was to obtain orphan drug status, it would lose
20% of its market share to a me-too competitor after the
exclusivity expired
o Also the probability of a recombinant competitor entering PAO
market to approx. 20%