Creating a Conceptual Framework and Index to Measure Pharmaceutical Innovation

Monday, June 13, 2016: 10:15 AM
G17 (Claudia Cohen Hall)

Author(s): Kathleen L. Miller

Discussant: Ariel Dora Stern

There is significant interest in how to best understand and classify innovation in pharmaceuticals and biologics. Current classifications of innovation are typically measured in counts, such as important patents, new molecular entities (NMEs), or first-in-class drugs. However, these measures have limitations in the amount of information that they can convey about a drug’s inherent innovativeness; while they are easily measured and compared over time, they do not provide a nuanced measure of its relative level of innovation, as compared to other drugs. These count measures also do not provide a way to rank drugs, and do not convey any information over multiple possible dimensions of innovation. Therefore, in order to better classify pharmaceutical innovation, this study proposes to create an index to measure innovation, which will be able to rank drugs by level of innovation, and use multiple variables to determine this rank. The index will be split into three different dimensions of innovation: scientific, clinical, and patient-level. Scientific innovation is defined as any innovation that is based on the science behind, or of, the drug, such as whether it is first-in-class or whether it utilized a novel formulation type. Clinical innovation is defined as any innovation that improves a physician’s ability to treat a patient, such as whether the drug meets an unmet medical need or whether it has a novel mechanism to improve adherence. Patient innovation is defined as any innovation that improves outcomes for a patient, such as being the first drug to treat a particular disease or a drug that is a substantial improvement over existing therapies. The conceptual model in this study will outline and identify potential measures for all three dimensions. Variables that can be used in the model will include both quantitative and qualitative measures, such as the ones described above. To create the actual index and ranking, each measure will be assigned a numeric value, and all measures for each dimension will be aggregated to form the index. Ideally, the final index will include all three of the dimensions aggregated into the single index. However, in this preliminary study, the focus will be solely on creating the empirical index for the scientific and clinical dimensions. Additionally, initially this framework and index will only include NMEs, however, it will hopefully be expanded to include other types of pharmaceutical innovation as well (e.g. new formulations and indications). Results from a very early iteration of the index, using only one measure of innovation for each dimension, indicate that there exists substantial variation in the level of innovation for new drugs.