Related Experiment Video
Updated: Mar 3, 2026

Drug Repurposing Hypothesis Generation Using the "RE:fine Drugs" System
Published on: December 11, 2016
How excluding some benefits from value assessment of new drugs impacts innovation
1Pfizer, New York, NY, USA.
Abstract:
Payers often assess the benefits of new drugs relative to costs for reimbursement purposes, but they frequently exclude some drugs' option-related benefits, reducing their reimbursement chances, and making them less attractive R&D investments. We develop and test a real options model of R&D investment that shows that excluding option-related benefits heightens drug developers' incentives to avoid high-risk (volatile) R&D investments and instead encourages them to focus on "safer" (positively skewed) investments. Our model and empirical results could partly explain the decline in the number of risky new molecular entities.
More Related Videos
Related Concept Videos
Drug Products: Biologics, Biosimilars and Interchangeables
Impact of Pharmacokinetic–Pharmacodynamic Models: Regulatory Decisions
Drug Regulation
Bioequivalence studies: Biowaivers
Types of Biopharmaceutical Studies: Controlled and Non-Controlled Approaches
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast,...
Pharmaceutical Alternatives: Excipients and Impurities-Related Therapeutic Nonequivalence

