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Biopharmaceutical infrastructure key to lower drug development costs

October 12, 2007

Improvements to the technology infrastructure for researching and developing new biopharmaceuticals would be expected to save the industry hundreds of millions of dollars annually, according to a new economic study* sponsored by the National Institute of Standards and Technology (NIST).

Prepared by RTI International for NIST, the study's authors found that over the last two decades emphasis in new drug development has shifted from small-molecule chemicals to large-molecule proteins and other biopharmaceuticals such as human insulin, gene therapies and specialized antibiotic treatments. The report notes that the biopharmaceutical industry currently spends about $21 billion annually on research and development and has commercialized over 400 products.

Producing and maintaining the infrastructure that supports R&D, manufacturing and postmarket surveillance, including core data, methods, and standards used to determine the quality and efficacy of biopharmaceuticals, costs the industry a total of $1.2 billion annually, according to the report. The study focused on expenditures for four major categories of technical infrastructure: bioimaging, biomarkers, bioinformatics, and gene expression, as well as expenditures for infrastructure supporting processing and quality control for commercial manufacturing and activities involved with postmarket surveilliance.

According to the study, improvements to this infrastructure, such as better standardization of data collection and analysis, would be expected to save between 25 and 48 percent of R&D expenses for each new biopharmaceutical drug approved by the Food and Drug Administration. Better technical infrastructure is also projected to reduce the average development time per approved drug from 122 months to 98 months, a reduction of 20 percent. The study further estimated that total industry manufacturing costs could be reduced over the four major phases of manufacturing by $1.5 billion or 23 percent.

Data for the study were gathered from individual researchers and organizations including a survey of 44 technical experts whose companies represent 42 percent of the combined annual R&D spending and 49 percent of the combined annual R&D sales in biopharmaceuticals.

The ultimate beneficiaries of an improved biopharmaceutical infrastructure, wrote the study's authors, "are patients who gain access to a broader array of novel therapies where development is supported by an effective technology infrastructure."

The full report, Economic Analysis of the Technology Infrastructure Needs of the U.S. Biopharmaceutical Industry, is available at: www.nist.gov/director/prog-ofc/report07-1.pdf.

* RTI International, Economic Analysis of the Technology Infrastructure Needs of the U.S. Biopharmaceutical Industry: Planning Report 07-01, August 2007, 201 pp.

National Institute of Standards and Technology (NIST)