Figure 4.1
NEW PRODUCT DEVELOPMENT
PROCESS
Finance
Corporate strategy and portfolio decisions
Regulatory affairs
Marketing and sales + market research
Manufacturing
Basic R&D
Reimbursement / Health economics
MANUFACTUREMARKETING
SALES
CLINICAL TRIALS
DISCOVERY&
PRECLINICAL $
In vitro studies with cells, proteins,
nucleic acids; animal studies, product
design and testing for safety and efficacy
Clinical research in humans for
evaluating safety and efficacy, statistical validity of results,
regulatory approval for marketing
Regulatory standards apply to these
functions: Manufacturing to
marketing, sales and distribution
Reimbursement through a
complex network of third party
payers
Figure 4.2
Define the product –market need and
product characteristics
Understand key issues and plan prototypes and
path to final product; Prepare budget
Get support for your project from senior
management. Build team. Get started.
Figure 4.3
Figure 4.4
Figure 4.5
Stages(activities) Gates
1
2
3
3
Go
Kill / Hold / Recycle
- inputs (deliverables)
- evaluation criteria
- output
1
2
3
Stage-Gate process
Figure 4.6
FIGURE 4.7
Idea
GATE 1
InitialScreen
Preliminaryassessment
STAGE 1
GATE 2
Second Screen(e.g. feasibility)
Detailed investigationBusiness case
preparation
STAGE 2
GATE 3
Decision on
business case
STAGE 3
Testing andvalidation
GATE 4
Post-development
review
STAGE 4
Development
GATE 5
Pre-commer-cializationbusiness analysis
Full productionAnd market
launch
STAGE 5 $$
Postimplem-entationreview
Time&Cost of Drug Development (NDA)
Dis
cove
ry p
hase
Pre
clin
ical
stu
dies
Reg
ulat
ory
appr
oval
fo
r m
arke
ting
Mar
ketin
g, S
ales
and
P
ost l
aunc
h st
udie
s
Clin
ical
test
ing
(pha
se I-
III)
0
20
40
60
80
100
years (not to scale)
cost
($
mill
ion
s)
5 7 13 14.5
FIGURE 4.8a
Functional costs for drug development
Biological screening
16%
Clinical trials45%
Synthesis/extraction
12%
Manufacturing9%
Dosage formulation
7%
Toxicology6%
Regulatory f iling3%Bioavailability
2%
Figure 4.8b
MANUFACTUREMARKETING
SALES
CLINICAL TRIALS
DISCOVERY&
PRECLINICAL $Target Biology Lead drug candidate
Disc-overy
Identi-fication
Valid-ation
preclinicalValidation,Toxicology
PhaseI
PhaseII
PhaseIII
Manufacturing,MarketingPhase IV study
DistributionChannels, Regulatory
Manufacturing
Figure 4.9
Validated
targets
Target biology Biochemistry (high throughput
screening)
Compound library
Lead OptimizationImproved leads
Hits
Structural Biology Molecular Modeling
MedicinalChemistry
Leads
Pharmacology
Pharmacokinetics (PK) & Metabolism (ADME)
Selection of a drug candidate
Preclinical development
Clinical developmentRegistration
Launch
Figure 4.10
Discovery
Hit to Lead
Lead to Drug Candidate
Clinical studies
Approval
Launch and Phase IV studies
Management Review
Technical Review
Formal Management review
Formal Management Review
Formal FDA Review
Follow Up
Figure 4.11
Biomarker identification and validationInternal R&DIn-licensing
Manufacturing requirements
Clinical Test DevelopmentProduct specificationsTechnical platformPerformance criteria
Analytical performance optimization/assessment
Scale up and manufacturing
Retrospective clinical validation
CommercializationResearch Use Only (RUO), ASR
Performance,Utility Criteria
Performance,Utility Criteria Prospective clinical validation
Registration & CommercializationPMA, CE Mark test
Registration & CommercializationCE Mark, 510(k) tests
Figure 4.12
Figure 4.13
BasicResearch
PrototypeDesign orDiscovery
PreclinicalDevelopment
Phase I Phase II Phase III
FDA Filing/Approval &Launch
Clinical
Marker AssayValidation
Analytical ValidationDiagnostic Kit
Clinical Validation DiagnosticKit; Final Platform
Platform Change
Product concept
Animal testing
DeviceSpecs, design
Production prototype
Pilot trial
Manufacturing production
PhysicianHospitalConsumer
DistributionSales, Mktg
MANUFACTUREMARKETING
SALES
CLINICAL TRIALS
DISCOVERY&
PRECLINICAL$
Pivotal trial
Figure 4.14 A
Figure 4.14 B
Dis
cove
ry p
hase
Pre
clin
ical
stu
dies
Reg
ulat
ory
appr
oval
for
mar
ketin
g
Mar
ketin
g, S
ales
and
P
ost l
aunc
h st
udie
s
Clin
ical
test
ing
(pilo
t+pi
vota
l stu
dies
)0
2
4
6
8
10
12
years (not to scale)
cost
($
mill
ion
s)
F
1 3 5 7 8
Customer Needs(Voice of Customer)
Product
Design Inputs(functional requirements)
Design Outputs(Product Specs)
Product Development(Design Reviews)
VALIDATION
VERIFICATIONQUALIFICATION
Figure 4.15
Discovery
Feasibility
Optimization
Demonstration
Production
Market Launch
Management Review
Informal Design Review
Formal Design Review
Formal Design Review
Formal Design Review
Follow Up
Figure 4.16
MONTHSMILESTONES/TASKS Location FTEs Days 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Compound1 (PO dosage) to IND PK and MTD studies US 0.3 90 Chemistry - compound scaleup UK/China 1 180Prelim tox/ADME/SAR Comp1&2 UK/China 0.67 120Compound1 efficacy study-disease1 Disease1 model1 animal study UK/China 0.17 150 Pilot study/controls UK/China 30Disease1 model2 animal study US 0.17 150 Pilot study/controls US 30
Compound1 efficacy study disease2 Model1 animal study US 0.5 120 Pilot study /controls US 45Pre-IND meeting w FDA US 0.08 90
Compound1&2 efficacy for disease3 Disease 3 model US 0.5 120
Formal GLP toxicology UK/China 0.1 180Pre-IND meeting with FDA USIND preparation and submission US 0.3 30
FTEs UK/China 2.0FTEs US 1.8
MILESTONES1. Efficacy in animals for diseases2. FDA interaction3. GLP Toxicology4. IND(s) filed
1
1
1
3
2
4
Figure 4.17
NDA
Target Biology Lead drug candidate
Disc-overy
Identi-fication
Valid-ation
MarketingPhase IV study
FDAOptim-ization
Early clinical studies
Advanced studies
RegistrationMarketing
Sales
PhaseI
PhaseII
PhaseIII
preclinical
GLP studies
R&D personnel
Marketing personnel
Regulatorypersonnel
Figure 4.18
Figure 4.19
Sr. Management/ Board/Steering Committee
Project A
Project B
Project C
Functio
n-specific orders
Project-specific orders
Project manager Team member
Functional area 1
Functional area 2
Functional area 3
Stage PERSONNEL/FTE Number Time UnitBase Cost
(over 1 year)
Cost per year = Base cost X time
4a & 4b & 4c. Project manager 1 0.8 FTE $170,000 $136,000Senior Chemist 1 0.4 FTE $250,000 $100,000Senior Biologist 2 0.75 FTE $225,000 $337,500Biology research asstnt 1 0.6 FTE $115,000 $69,000Senior Biomedical Engineer 1 0.2 FTE $200,000 $40,000
CONSUMABLES/ SUPPLIES
Pressure transducers, assay kits, chemicals, materials costs
$85,000
CAPITAL EXPENDITURES
micro-centrifuge $18,000
CONTRACTED/ OUTSOURCED
Outsourced animal study $92,000
TOTAL $877,500
Note: Base Cost for personnel includes taxes, benefits, overhead costs, some materials
In vivo test in healthy animals, hypertensive animals, toxicity tests
Figure 4.20
Marketing & SalesR&D
FDA Process& Clinical
Trials
ManufacturingUS International
Do ItYourself
StrategicPartners/Licenses
Figure 4.21
BUY/BUILDOutsource to well
established contractor as collaborator
BUILD
BUY
BUY/BUILDSelectively contract
parts only as needed. Keep assembly and
testing in house.
HIGHLOW
LOW
HIGH
Trade secrets, IP concerns
Technical Complexity
Figure 4.22
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