Value Focused Development

Value Focused Development

When we are engaged in conversations about developing medicines, how often do you hear language thrown around such as “capturing the value,” “fast to the next value inflection point,” or words to this effect?

Drug development is a complex and risky business where remuneration for value creation occurs, by analogy, by passing the baton from one relay runner to the next.

It should come as no surprise that all engaged in the broad church of “medicine development”, seek to create value and be paid, and that this mostly involves attention placed on needs of their adjacent customer, i.e. the next baton change.

For example, an academic innovator desires to capture the interest of an Angel investor or venture capitalist (VC) to finance their invention. A VC requires a multiplier, often over a short time, to satisfy their institutional investor customers. A biotech needs to woo the interests of a pharma transaction. A pharma needs to create a compelling case for registration, and crucially, reimbursement.

And somewhere in the distance out of sight, is the relay’s finishing line—the needs of the patient and society.

Now, the drug development process with multiple baton changes might just work seamlessly, if only everyone had a common interpretation as to who the ultimate customer was and what the customer actually valued. It would mean every stakeholder would perform just those key development activities that focused on the value creation desired by that end customer.

However, the truth is the interpretation of what constitutes value gets ever more murky, the greater separation between stakeholders in the drug development process.

This information asymmetry creates misalignments where key questions are sidelined as other less critical issues are addressed resulting in financial and time wastage.

Indeed, licensors frequently expend substantial resources and suffer serious delays repeating parts of the development program for in-licensed drug candidates.

Additional value could have been captured by the licensee had they known what their customer actually wanted. In some cases, decisions to terminate programs due to insufficient patent life highlight systemic failures, resulting in important medicines never reaching patients in need. This is exactly analogous to dropping the baton!

It is important to ask seemingly innocuous questions like, “what is value?” and “what does value focused development mean to you?” to the various sectors involved in developing medicines.

By increasing awareness and reducing information asymmetry, it may be possible to have stakeholders develop a shared view of each other’s requirements and importantly a more consistent view of the finishing line. Perhaps via better alignment, cross sector collaboration can be improved and waste reduced, increasing the likelihood that new medicines will reach patients.

To learn more about how we’re developing medicines that matter, please watch this short video.

Leigh Farrell

About the Author

Leigh Farrell

Vice President, Corporate Strategy & Business Development, Certara

More Posts by This Author

Dr. Farrell has over 20 years of experience in the biotechnology and pharmaceutical industry in various roles. His past appointments include eight years as Vice President Business Development Biota Pharmaceuticals, Associate Director GBS Venture Partners (one of Australia’s largest venture firms), Research Manager Johnson & Johnson Research, and CEO of Gene Shears Pty. Ltd. Dr. Farrell has extensive international networks including pharmaceutical and biotechnology companies, venture capital, and investment banks. Dr Farrell is also a member of the Walter & Eliza Hall Institute for Medical Research Board Commercialization Committee and the selection panel for the Australian Trade Commission (AusTrade) Tropical Medicine Commercialization Grant.