Does the precision oncology medicine development pathway deliver value for health systems?

Raymond Henderson, Declan French, Elaine Stewart, Dave Smart, Adam Idica, Jordan Clark, Markus Eckstein, Mark Lawler

Research output: Contribution to journalMeeting abstractpeer-review


e18818 Background: While there is increasing evidence that precision cancer medicines (PCMs) can be more effective than “one-size-fits-all” (OSFA) oncology medicines, questions persist as to their cost, availability, and overall patient benefit. We determined whether using a PCM approach to medicines discovery/development delivers medicines within cost constraints of health systems. R&D costs of developing a medicine are a subject of debate, with average estimates ranging from $314 million (M) - $2.8 billion (B). Methods: Data on oncology medicines approved (2011-2020) by the US Food and Drug Administration (FDA) were analyzed, employing two approaches to estimate R&D costs to bring the medicine to market: (i) Securities and Exchange Commission (SEC) data were compiled from 10-K and 10-Q financial performance filings on the medicine’s development cost through its R&D lifetime. (ii) Employing a base figure of $100,271 (the estimated cost per patient in a phase III clinical trial), costs were calculated, based on data from Trial data were split into clinical trial phases and probability of trial success calculated, along with preclinical costs. Cost-of-capital (CoC) approach was applied and if appropriate an orphan drug tax credit (ODTC) was subtracted from the total. Results: 19 PCMs and 11 OSFA oncology drugs listed by the National Cancer Institute which had complete data were analyzed from 22 companies (Table). Initial costs from SEC data suggest a 50% reduced development spend for PCM, ($605M; range = $181M-$1.1B) (Clinical Trial Modelling Analysis: $604M ($63M-$2.29B)), compared to an OSFA oncology drug development spend ($877M; $333M-$3.34B) (Modelling Analysis: $597M ($41M-$1.64B)). Once preclinical costs were added total R&D costs capitalized and ODTC subtracted, there was an 83% increase in costs, from $2.44B ($614M-$5.23B) (Modelling Analysis: $3.1B ($209M-$11.52 B)) for PCMs to $4.46B ($1.59-$14.9B) (Modelling Analysis: $3.92B ($282-$12.74B) for OSFA oncology drugs. SEC data are more accurate, as they capture real data, rather than modelling assumptions. Conclusions: Our results provide an estimate of the R&D spend required to bring an oncology medicine to market. R&D cost of a PCM is below the top range of prior estimates published, while R&D cost of an OSFA oncology medicine is almost twice the cost of a PCM, emphasizing the potential for PCM treatments to deliver care at greater value to patients and health systems.[Table: see text]
Original languageEnglish
Article numbere18818
Number of pages1
JournalJournal of Clinical Oncology
Issue number15 supplement
Publication statusPublished - 28 May 2021


  • Cancer Research
  • Oncology


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