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Diagnostic Commercialization and Development Budget Allocation



Tessa Sandberg

In the final part of the series, ‘Personalized Medicine: What Pharma Should Do to Get Ready’, Tessa Sandberg discusses the importance of allocating a large enough budget for diagnostic development and commercialization to support the goal of becoming a leader in the field of personalized medicine.

Have you ever dreamed of buying a Rolls Royce? Driving one seems like an effortless pleasure and owning one must make you feel like the ‘king of road’. Although Rolls Royce promises to ‘keep your investment in perfect condition’, buying a luxurious and graceful car like this is a major financial investment. Perhaps you should be practical and just stick with Volkswagen, a brand that offers perfectly affordable cars which last a long time. Then again, you realise that owning a Volkswagen does not shout ‘king of the road’. So you start investigating the different ways to get that Rolls Royce even though you can’t afford it. You surf car websites to find a Rolls Royce with a Volkswagen price tag… and then you realise there is no alternative: only by spending a large sum of money on a Rolls Royce will show that you are a leader.

Similarly, pharma companies invest in personalized medicine because they want to become leaders in the field. They are likely to be aware of the main ingredients necessary to achieve this leading position, such as aligning the diagnostic strategy to the drug strategy, partnering with the right diagnostic company, engaging with laboratories, etc. However, this diagnostic development and commercialization process requires a large investment and pharma is sometimes reluctant to do this (Figure 1), hoping that allocating a Volkswagen budget will bring them the Rolls Royce prestige. Based on ten years of experience in the field of personalized medicine, Diaceutics has identified three best practices that are essential for the diagnostic development and commercialization process.

  1. Complete an early financial impact assessment
    Pharma should complete an early financial impact assessment to determine the budget to spend on pre-launch and launch activities. Completing this assessment gives a company an estimation of the financial effect of the strategy and will eventually make team members aware of the value of investing in a diagnostic strategy.
  2. Allocate sufficient budget
    Pharma should remember the Volkswagen versus Rolls Royce example when allocating a budget. In fact, the budget allocated for investment in the diagnostic development and commercialization process should be sufficient to achieve a position close to the leader in the personalized medicine field.
  3. Invest in diagnostic adoption drivers
    Even the best drug and most accurate test will not be adopted on its own as nothing sells itself. Newly-launched drugs and tests need a commercialization strategy for adoption. We have already identified different drivers that are worth investing in, such as communicating with and educating physicians and working with laboratories, and discussed these earlier in the series.

In conclusion, pharma should be aware that in order to compete with the leaders in personalized medicine they will have to allocate ample budgets for the diagnostic development and commercialization process. It may be just the diagnostic division of a pharma company that is investing in diagnostics but the whole company has to realise the importance of the diagnostic strategy in driving personalized medicine. Investing in only a part of a Rolls Royce, let’s say the motor, is unlikely to make you a leader in the field—you definitely need the whole car to take you there.

Figure 1. Pharma should allocate budgets according to their strategy. Sufficient budget will be needed to become a leader in personalized medicine (PM).

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