Pharmaceutical companies have to face huge risks and enormous costs of production before they can produce a drug. Efficient allocation of resources is essential to help in maximizing profits. Yu and Gittins (2007) described a model and associated software for determining efficient allocations for a preclinical research project. This is the starting point for this paper. We provide explicit optimal policies for the selection of successive candidate drugs for two restricted versions of the Yu and Gittins (2007) model. To some extent these policies are likely to be applicable to the unrestricted model.
Pharmaceutical companies have to face huge risks and enormous costs of production before they can produce a drug. Efficient allocation of resources is essential to help in maximizing profits. Yu and Gittins (2007) described a model and associated software for determining efficient allocations for a preclinical research project. This is the starting point for this paper. We provide explicit optimal policies for the selection of successive candidate drugs for two restricted versions of the Yu and Gittins (2007) model. To some extent these policies are likely to be applicable to the unrestricted model.
The output from a pharmaceutical research project is a stream of candidate drugs which may be submitted to clinical trials. The value of this output depends on the characteristics of the stochastic process generating this stream, and on the extent to which the candidate drugs are chemically similar to each other. This paper explores the impact of these factors on profitability, and on the policy which should be followed for selecting candidate drugs.The profitability of pharmaceutical research r
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