Assessing the value-adding impact of diagnostic-type tests on drug development and marketing.
OBJECTIVE
We explore the cash value of the companion diagnostics opportunity from the perspective of the pharmaceutical partner. Cashflow-based modeling is used to demonstrate the potential financial benefits of key relationships between the pharmaceutical and diagnostics industries.


RESULTS
In four scenarios, the uplift in the net present value (NPV) of a proprietary medicine can exceed $US1.8 billion. By simple extrapolation, the uplifted NPV calculations allow realistic and plausible estimates of the companion diagnostic opportunity to be in the region of $US40 billion to $US90 billion.


CONCLUSIONS
It is expected that such market valuation could drive a macroeconomic change that shifts healthcare practice from reactionary disease-treatment to proactive health maintenance.
Blair
Edward D
ED
Integrated Medicines Ltd, Cambridge, England. eddie.blair@integratedmedicines.co.uk
D003365:Costs and Cost Analysis / Q000191:economics; D003955:Diagnostic Tests, Routine / Q000191:economics*; D015195:Drug Design; D004345:Drug Industry / Q000191:economics*; D017850:Economics, Pharmaceutical; D006801:Humans; D040541:Marketing / Q000191:economics*; D018803:Models, Economic