Measuring the novelty of recent medicine – Healthcare Economist

All of us need new, improved medicines. Medicine that present incremental advantages (usually referred to as “me too” medicine) are good, however actually revolutionary therapies are even higher. Nonetheless, how does one separate how “novel” a therapy is? Is there a technique to quantify this?

In truth there’s. A technique to do that relies on the therapy’s molecular construction. For example, the Tanimoto distance measures the the fraction of chemical options which can be shared by the 2 chemical compounds. Nikolova et al. 2004 summarizes this strategy which is calculated as follows:

Krieger, Li and Papanikolau 2022 use this technique to quantify how drug growth for novel medicine has rather more constructive informational spillovers on the drug growth than incremental medicine. This paper gives an instance of an software of Tanimoto distance under.

Extra det

Utilizing the Tanimoto distance as a measure of novelty, the authors discover the next:

…novel drug candidates are much less prone to receive FDA approval however are primarily based on extra useful patents. According to a easy mannequin of expensive exterior finance, we present {that a} constructive shock to companies’ web price leads companies to develop extra novel medicine. This implies that even massive companies might behave as if they’re threat averse, decreasing their willingness to funding in doubtlessly useful radical innovation.

You possibly can learn the total paper here.