AN INVESTMENT APPRAISAL APPROACH TO CLINICAL-TRIAL DESIGN

In this paper, a general investment appraisal model is presented which shows how pharmaceutical companies could take profit considerations i nto account when making decisions about the design of randomized contr olled trials. A general model is presented based on the net present va lue method of investment appraisal. The approach is illustrated with a hypothetical example which shows how optimal (net present value maxim izing) designs can be determined based on choices about sample size an d endpoint measurement. The method could be extended to accommodate co nsiderations about other trial design features, and could be used to d etermine a portfolio of studies which maximizes the expected return on a given development or trial budget. Furthermore, the approach could be used by pharmaceutical companies to evaluate the incremental costs and benefits of incorporating non-clinical objectives into trials, suc h as quality of life research and economic evaluation studies. A numbe r of practical difficulties would need to be overcome to utilize the a pproach. Directions for further research are therefore highlighted cen tred on the key components of the model: a trial cost function, a prod uct demand function, innovation diffusion processes and Bayesian appro aches to trial design. (C) 1998 John Wiley & Sons, Ltd.