Hot topic: Getting more bang for each biotech buck
Biotech investors like to think that their actions benefit society, by bringing to the market new drugs that save lives and spare people illness.
And often they do. In many cases, only by them risking their capital, is great good done. Think of the early investors in BioNTech or Moderna, for instance. Without them, mRNA vaccines that protected millions against Covid would not have been made. Even when individual investments fail, the overall system of backing lots of “long shots” does considerable good, because a few yield spectacular results which change medicine for the better.
But is this system good enough at turning dollars into clinical impact? Does each dollar produce – to channel the Enlightenment philosopher Jeremy Bentham – “the greatest good for the greatest number”?
A recent paper, published in the journal Nature Biotechnology, argues “No, it does not.” Its authors, Philip Brainin and Bibhash Mukhopadhyay of Scandinavian life science VC fund Sound Bioventures, propose a new framework for assessing the likely positive impact on patients of each biotech investment.
Brainin touched on the paper in a recent interview he gave to #OptimumTV – watch it here.
The framework’s two measures – ‘science-adjusted life years’ (SALYs) and ‘science-adjusted disability years’ (SADYs) – are explicitly based on the ‘quality-adjusted life year’ (QALY) and ‘disability-adjusted life year’ (DALY) metrics used by governmental bodies such as England and Wales’s National Institute for Health and Care Excellence (NICE) to decide which medicines can be used in public health systems.
Just as NICE uses QALYs and DALYs to determine if a drug is clinically- and cost-effective enough to be used on the NHS, so – say the authors – biotech investors could use SALYs and SADYs to see if their cash is likely to do enough good.
In addition to gauging the likely clinical and cost effectiveness of a potential medicine, SALYs and SADYs would also consider how much uncertainty there was with the early-stage drug in question.
Why is such a mechanism needed?
“The intent of the measurements is to bridge the gap between financial performance and patient impact,” according to the authors. Too often, they argue, a new drug produces a great return for its investors, but the overall impact on patients is limited – or vice versa.
New antibiotics are the classic case in point. Even though the potential positive impact of a new antibiotic on global public health is enormous, the fact that it could only be used sparingly (to limit the growth of antibiotic resistance to that precious new drug) severely limits how many dollars would flow back to investors. The financial value of new antibiotics is therefore much lower than their societal value … and consequently few get developed.
But will investors take heed of metrics that attempt to capture social value when what they tend to get measured on is financial return alone?
Brainin and Mukhopadhyay recognise they aren’t going to change how things are done overnight.
“Our goal is to contribute to the broader conversation on how best to measure and maximize the societal impact of life science investments,” they write.
Given that health budgets everywhere are likely to become more stretched in the future due to threats like AMR and the slowly building demographic stress of ageing populations, such conversations are needed. Because in the end, payers will demand more bang for their bucks.
