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Assessing the Value-Adding Impact of Diagnostic-Type Tests on Drug Development and Marketing

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Abstract

Objective and methods: 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.

Conclusion: It is expected that such market valuation could drive a macroeconomic change that shifts healthcare practice from reactionary disease-treatment to proactive health maintenance.

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  1. Integrated Medicines Ltd, Topfield House, Ermine Street, Caxton, Cambridge, CB23 3PQ, England

    Edward D. Blair

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  1. Edward D. Blair
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Correspondence to Edward D. Blair.

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Blair, E.D. Assessing the Value-Adding Impact of Diagnostic-Type Tests on Drug Development and Marketing. Mol Diag Ther 12, 331–337 (2008). https://doi.org/10.1007/BF03256298

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