Original Post Date: April 1, 2010
Author: Mindy Allport-Settle
Some things will never change when it comes to getting a new drug or medical device to a state of commercialization that includes profits beyond simple revenue. Regulatory approvals, mountains of paper work, clinical trials, research and development efforts that sometimes lead nowhere are only a few. Some things, though, are changing.
Most of the people who develop an idea for a new drug or medical device product have more than one idea — more than one viable target. Traditionally, we sift through our ideas and choose the one that seems like it has the best chance of success. Maybe that means it will treat the largest patient population or be the most appealing to a venture capital firm. What do we do with the ideas that don’t make that cut? We frequently abandon them — especially in favor of a target that has a higher dollar value down stream. Maybe we should be taking advantage of more of those ideas.
Two new entrepreneurial strategies for financing research and development efforts and eventually bringing flagship products to market have emerged over the last few years.
1. Commercialize first in countries outside North America and the European Union
While drug and medical device sales in the United States account for an average of 80% of a company’s revenue, ignoring the rest of the planet is a mistake. Many countries are eager to approve products for commercial sale with abbreviated clinical studies. The revenue might not be much, but it will provide additional patient data and might provide enough of a revenue stream to off-set the cost of U.S. commercialization efforts.
2. Develop a non-drug product that doesn’t require regulatory approval
OTC (over the counter) products are a multi-billion dollar industry. There are even countries that will brand their product with your name to provide you with products to help establish your brand.
One product that illustrates both of these concepts is Monster Be Gone / Monster Be Good™. This product addresses a very real and sometimes difficult to manage condition in pediatric-aged patients: fear of monsters. The revenue from this product alone would not support a company, but in combination with other similar products, the revenue can pay base salaries and facility costs. Being able to keep the lights on and paying salaries takes some of the fear factor out of the normal research and development cycle leaving the company a little more freedom to grow.
Mindy Allport-Settle is the CEO of PharmaLogika, Inc and is a consultant to the life sciences industry. She has worked extensively with the manufacturing development of traditional and non-traditional vaccine platforms.