Tuesday, November 23, 2021

Drug Discovery Prologue (Dunning Kruger Saga Part 2)



Drug discovery is awfully slow, expensive and prone to high failure rates.

About 96% of drugs being developed will fail. Some researchers have estimated that the current probability of success is not much better than a random approach.  

The average cost of bringing a drug to commercialization is estimated to be between $1b to $2.6b. This cost figure includes cost expended on the many failures. Over the last 7 years, the average costs have risen by over 100%. At current trends, within 20 years, the average cost per drug to commercialization will balloon to over $20b.

The average time to bring a drug from discovery to market ranges between 10 to 15 years.

In 2019, the pharmaceutical industry spent $83 billion dollars on R&D. This figure is likely to be much higher in the wake of COVID19. Adjusted for inflation, this is about 10 times what the industry spent per year in the 1980s. For the industry as a whole, over ten years from 2010 to 2019, Deloitte’s estimated the returns on R & D has fallen from 10% to 1.9%. In 2020, the return increased slightly to 2.5%.

The major causes of failure in drug discovery come from a combination of efficacy and side effects. Other significant factors include commercial factors and avoidable errors such as bad trial designs and non-compliance with regulatory requirements.

This is a problem that is in desperate need of a solution. The size of the pharmaceutical industry is estimated to be about USD$1.5t in 2020, and this is projected to grow at about 7% CAGR for the next 8 years.

The next blog post will examine the fundamental reasons for the dismal outcomes in drug discovery. Then we will take a stab at the possible solution providers.

Yours One Legged

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