"How Bayer Makes Decisions to Develop New Drugs", an article by Dr. Jeffrey S. Stonebraker of Bayer BP appears in the journal Interfaces: An International Journal of the Institute for Operations Research and the Management Sciences.
A summary of the study can be found online http://www2.informs.org/Press/Bayerabstract.pdf
The enormous costs ($200-800 million) and long timelines (10-15 years) for research and development, as well as the staggering odds against technical and commercial success, can make drug development decisions challenging. A Bayer BP team introduced six decision points into the company’s decision process to help determine whether to continue developing a new drug. The results at each stage determine if a drug goes to the next step in the process.
In 1999, the strategic planning department at Bayer BP, a division of Bayer HealthCare LLC, began evaluating a drug for dissolving blood clots. This drug may eventually qualify for FDA fast-track and orphan drug status. Bayer BP anticipates the drug will offer a new paradigm in thrombolytic drug therapy for a condition known as peripheral arterial occlusion, or PAO. It directly dissolves blood clots in the legs, offering a potentially safer and more effective treatment than current pharmaceutical and surgical treatments.
The Bayer BP team began evaluating the thrombolytic therapy using the "Dialogue Decision Process." As described in a 1999 article by Michael S. Allen and Samuel E. Bodily that also appeared in Interfaces, "the dialogue is between a decision board and the strategy team as they work through six steps of a decision process. This process is focused on alternatives and implementation. Strategy frameworks and structuring tools are key to assessing the business situation. Risk and value trade-offs are made explicit, leading to concrete proposals to add value and reduce risk. Explicit plans for action are developed as the strategic alternative is chosen."
The Bayer BP team consists of four research scientists, a clinician, a regulator, a production engineer, an industrial engineer, a marketer, and a decision analyst/operations researcher.
The team considers each of the six decision points in time to identify key market-related and scientific deliverables, so senior managers can assess the drug’s likelihood of success versus the company’s exposure to risk, costs, and strategic fit. At each of the six decision points, the team recommends whether to:
- Begin pre-clinical development with experiments involving animals
- Begin testing in humans (Phase I)
- Invest in continuing clinical development (Phase II)
- Continue investing in a Phase III efficacy trial
- File a biological license application with the U.S. Food and Drug Administration (FDA)
- Launch the drug in the marketplace if FDA approval is granted
To date, the thrombolytic therapy has been approved at decision point 1. In coming weeks, Dr. Stonebraker says it comes up for its next decision point: whether Bayer BP should file an investigational new drug (IND) application with the FDA. If the IND is approved by the FDA, Bayer BP can test the therapy in humans.
The process has been an improvement for Bayer BP, says Dr. Stonebraker. Previously, decisions were made after related cases were analyzed and presented to Bayer executives. The earlier method, he says, didn’t do enough to forecast technical and market risks associated with drug development. It also gave an advantage to advocates with strong sales skills, rather than to those who presented a comprehensive analysis of the proposed project’s merits.
The new approach has won supporters at Bayer BP.
This structured process based on the principles of decision analysis and operations research is becoming widespread in the pharmaceutical industry, says Dr. Stonebraker.
Dr. Stonebraker’s work earned him the INFORMS Decision Analysis Practice Award Competition, which was presented at the society’s annual meeting in San Jose last November.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. The INFORMS website is at http://www.informs.org.