Cost of innovation in the pharmaceutical industry.

The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).

The cost of biopharmaceutical R&D: Is biotech different?

The costs of developing the types of new drugs that have been pursued by traditional pharmaceutical firms have been estimated in a number of studies. However, similar analyses have not been published on the costs of developing the types of molecules on which biotech firms have focused. This study represents a first attempt to get a sense for the magnitude of the R&D costs associated with the discovery and development of new therapeutic biopharmaceuticals (specifically, recombinant proteins and monoclonal antibodies [mAbs]). We utilize drug-specific data on cash outlays, development times, and success in obtaining regulatory marketing approval to estimate the average pre-tax R&D resource cost for biopharmaceuticals up to the point of initial US marketing approval (in year 2005 dollars). We found average out-of-pocket (cash outlay) cost estimates per approved biopharmaceutical of $198 million, $361 million, and $559 million for the preclinical period, the clinical period, and in total, respectively. Including the time costs associated with biopharmaceutical R&D, we found average capitalized cost estimates per approved biopharmaceutical of $615 million, $626 million, and $1241 million for the preclinical period, the clinical period, and in total, respectively. Adjusting previously published estimates of R&D costs for traditional pharmaceutical firms by using past growth rates for pharmaceutical company costs to correspond to the more recent period to which our biopharmaceutical data apply, we found that total out-of-pocket cost per approved biopharmaceutical was somewhat lower than for the pharmaceutical company data ($559 million vs $672 million). However, estimated total capitalized cost per approved new molecule was nearly the same for biopharmaceuticals as for the adjusted pharmaceutical company data ($1241 million versus $1318 million). The results should be viewed with some caution for now given a limited number of biopharmaceutical molecules with data on cash outlays, different therapeutic class distributions for biopharmaceuticals and for pharmaceutical company drugs, and uncertainty about whether recent growth rates in pharmaceutical company costs are different from immediate past growth rates. Copyright © 2007 John Wiley & Sons, Ltd.

The impact of geologic variability on capacity and cost estimates for storing CO 2 in deep-saline aquifers

While numerous studies find that deep-saline sandstone aquifers in the United States could store many decades worth of the nation's current annual CO 2 emissions, the likely cost of this storage (i.e. the cost of storage only and not capture and transport costs) has been harder to constrain. We use publicly available data of key reservoir properties to produce geo-referenced rasters of estimated storage capacity and cost for regions within 15 deep-saline sandstone aquifers in the United States. The rasters reveal the reservoir quality of these aquifers to be so variable that the cost estimates for storage span three orders of magnitude and average>$100/tonne CO 2. However, when the cost and corresponding capacity estimates in the rasters are assembled into a marginal abatement cost curve (MACC), we find that ~75% of the estimated storage capacity could be available for<$2/tonne. Furthermore, ~80% of the total estimated storage capacity in the rasters is concentrated within just two of the aquifers-the Frio Formation along the Texas Gulf Coast, and the Mt. Simon Formation in the Michigan Basin, which together make up only ~20% of the areas analyzed. While our assessment is not comprehensive, the results suggest there should be an abundance of low-cost storage for CO 2 in deep-saline aquifers, but a majority of this storage is likely to be concentrated within specific regions of a smaller number of these aquifers. © 2011 Elsevier B.V.

Balancing Cost and Emissions Certainty: An Allowance Reserve for Cap-and-Trade

On efficiency grounds, the economics community has to date tended to emphasize price-based policies to address climate change - such as taxes or a "safety-valve" price ceiling for cap-and-trade - while environmental advocates have sought a more clear quantitative limit on emissions. This paper presents a simple modification to the idea of a safety valve - a quantitative limit that we call the allowance reserve. Importantly, this idea may bridge the gap between competing interests and potentially improve efficiency relative to tax or other price-based policies. The last point highlights the deficiencies in several previous studies of price and quantity controls for climate change that do not adequately capture the dynamic opportunities within a cap-and-trade system for allowance banking, borrowing, and intertemporal arbitrage in response to unfolding information.

Cost Heterogeneity and the Potential Savings from Market-Based Policies

Policy makers and analysts are often faced with situations where it is unclear whether market-based instruments hold real promise of reducing costs, relative to conventional uniform standards. We develop analytic expressions that can be employed with modest amounts of information to estimate the potential cost savings associated with market-based policies, with an application to the environmental policy realm. These simple formulae can identify instruments that merit more detailed investigation. We illustrate the use of these results with an application to nitrogen oxides control by electric utilities in the United States.

Cost-effectiveness of electricity energy efficiency programs

We analyze the cost-effectiveness of electric utility ratepayer-funded programs to promote demand-side management (DSM) and energy efficiency (EE) investments. We specify a model that relates electricity demand to previous EE DSM spending, energy prices, income, weather, and other demand factors. In contrast to previous studies, we allow EE DSM spending to have a potential longterm demand effect and explicitly address possible endogeneity in spending. We find that current period EE DSM expenditures reduce electricity demand and that this effect persists for a number of years. Our findings suggest that ratepayer funded DSM expenditures between 1992 and 2006 produced a central estimate of 0.9 percent savings in electricity consumption over that time period and a 1.8 percent savings over all years. These energy savings came at an expected average cost to utilities of roughly 5 cents per kWh saved when future savings are discounted at a 5 percent rate. Copyright © 2012 by the IAEE. All rights reserved.

ANALYSIS AND SIMULATION OF ENERGY USE AND COST AT A MUNICIPAL WASTEWATER TREATMENT PLANT

The cost of electricity, a major operating cost of municipal wastewater treatment plants, is related to influent flow rate, power price, and power load. With knowledge of inflow and price patterns, plant operators can manage processes to reduce electricity costs. Records of influent flow, power price, and load are evaluated for Blue Plains Advanced Wastewater Treatment Plant. Diurnal and seasonal trends are analyzed. Power usage is broken down among treatment processes. A simulation model of influent pumping, a large power user, is developed. It predicts pump discharge and power usage based on wet-well level. Individual pump characteristics are tested in the plant. The model accurately simulates plant inflow and power use for two pumping stations [R2 = 0.68, 0.93 (inflow), R2 =0.94, 0.91(power)]. Wet-well stage-storage relationship is estimated from data. Time-varying wet-well level is added to the model. A synthetic example demonstrates application in managing pumps to reduce electricity cost.

Computer vision tools for low-cost and noninvasive measurement of autism-related behaviors in infants.

The early detection of developmental disorders is key to child outcome, allowing interventions to be initiated which promote development and improve prognosis. Research on autism spectrum disorder (ASD) suggests that behavioral signs can be observed late in the first year of life. Many of these studies involve extensive frame-by-frame video observation and analysis of a child's natural behavior. Although nonintrusive, these methods are extremely time-intensive and require a high level of observer training; thus, they are burdensome for clinical and large population research purposes. This work is a first milestone in a long-term project on non-invasive early observation of children in order to aid in risk detection and research of neurodevelopmental disorders. We focus on providing low-cost computer vision tools to measure and identify ASD behavioral signs based on components of the Autism Observation Scale for Infants (AOSI). In particular, we develop algorithms to measure responses to general ASD risk assessment tasks and activities outlined by the AOSI which assess visual attention by tracking facial features. We show results, including comparisons with expert and nonexpert clinicians, which demonstrate that the proposed computer vision tools can capture critical behavioral observations and potentially augment the clinician's behavioral observations obtained from real in-clinic assessments.

Developing the Cost of Large Carnivore Conflict Rapid Response Units - A Namibian Case Study

Namibia is home to half the world’s remaining wild cheetahs and - provides critical habitat for lions, leopards, spotted and brown hyena and African Wild Dogs. Despite such ecological importance, only 5% of cheetah's, <1% of African Wild Dogs', and similar percentages of remaining habitat for other large carnivores exists on officially protected lands. As a result, human/carnivore conflict is a large problem on private lands, where 60% of surveyed farmers will shoot any large carnivore on sight. This project explores building a carnivore rapid response team equipped to mitigate human/carnivore conflict through researching the financial costs of such an endeavor, with an eye on capitalizing potential benefits to all 6 Namibian large carnivore species.

Cost-effectiveness analysis of the diagnosis of meniscus tears.

BACKGROUND: Diagnostic imaging represents the fastest growing segment of costs in the US health system. This study investigated the cost-effectiveness of alternative diagnostic approaches to meniscus tears of the knee, a highly prevalent disease that traditionally relies on MRI as part of the diagnostic strategy. PURPOSE: To identify the most efficient strategy for the diagnosis of meniscus tears. STUDY DESIGN: Economic and decision analysis; Level of evidence, 1. METHODS: A simple-decision model run as a cost-utility analysis was constructed to assess the value added by MRI in various combinations with patient history and physical examination (H&P). The model examined traumatic and degenerative tears in 2 distinct settings: primary care and orthopaedic sports medicine clinic. Strategies were compared using the incremental cost-effectiveness ratio (ICER). RESULTS: In both practice settings, H&P alone was widely preferred for degenerative meniscus tears. Performing MRI to confirm a positive H&P was preferred for traumatic tears in both practice settings, with a willingness to pay of less than US$50,000 per quality-adjusted life-year. Performing an MRI for all patients was not preferred in any reasonable clinical scenario. The prevalence of a meniscus tear in a clinician's patient population was influential. For traumatic tears, MRI to confirm a positive H&P was preferred when prevalence was less than 46.7%, with H&P preferred above that. For degenerative tears, H&P was preferred until the prevalence reaches 74.2%, and then MRI to confirm a negative was the preferred strategy. In both settings, MRI to confirm positive physical examination led to more than a 10-fold lower rate of unnecessary surgeries than did any other strategy, while MRI to confirm negative physical examination led to a 2.08 and 2.26 higher rate than H&P alone in primary care and orthopaedic clinics, respectively. CONCLUSION: For all practitioners, H&P is the preferred strategy for the suspected degenerative meniscus tear. An MRI to confirm a positive H&P is preferred for traumatic tears for all practitioners. Consideration should be given to implementing alternative diagnostic strategies as well as enhancing provider education in physical examination skills to improve the reliability of H&P as a diagnostic test. CLINICAL RELEVANCE: Alternative diagnostic strategies that do not include the use of MRI may result in decreased health care costs without harm to the patient and could possibly reduce unnecessary procedures.

Enhancing the Hodgkin-Huxley Equations: Simulations Based on the First Publication in the Biophysical Journal.

The experiments in the Cole and Moore article in the first issue of the Biophysical Journal provided the first independent experimental confirmation of the Hodgkin-Huxley (HH) equations. A log-log plot of the K current versus time showed that raising the HH variable n to the sixth power provided the best fit to the data. Subsequent simulations using n(6) and setting the resting potential at the in vivo value simplifies the HH equations by eliminating the leakage term. Our article also reported that the K current in response to a depolarizing step to ENa was delayed if the step was preceded by a hyperpolarization. While the interpretation of this phenomenon in the article was flawed, subsequent simulations show that the effect completely arises from the original HH equations.

Percutaneous Revision of a Testicular Prosthesis is Safe, Cost-effective, and Provides Good Patient Satisfaction.

Office-based percutaneous revision of a testicular prosthesis has never been reported. A patient received a testicular prosthesis but was dissatisfied with the firmness of the implant. In an office setting, the prosthesis was inflated with additional fluid via a percutaneous approach. Evaluated outcomes included patient satisfaction, prosthesis size, recovery time, and cost savings. The patient was satisfied, with no infection, leak, or complication after more than 1 year of follow-up, at significantly less cost than revision surgery. Percutaneous adjustment of testicular prosthesis fill-volume can be safe, inexpensive, and result in good patient satisfaction.