Abstract

New medical treatments are costly to develop and unlikely to successfully make their way through clinical trials, market access, and reimbursement.  Moreover, new treatments for rare diseases are limited in both patient populations and reimbursement levels, further reducing their attractiveness as an investment.  To increase the incentive to develop new treatments, portfolios of investments in new treatments in clinical trials have been proposed to financially de-risk drug development. We explore an important lever for further improving the incentives to develop treatments that is new in the context of biomedical portfolios: response-adaptive pilot studies in clinical trials that allow investments to be adjusted across projects as data are observed and that account for the importance of cost-effectiveness in gaining market access.  We propose and analyze a stylized model that shows that even a modest level of response adaptivity can materially improve financial outcomes from portfolios, particularly when investment amounts are limited. We derive expected value of information heuristics to guide clinical trial management in the portfolio and the design of the portfolio, and use an illustrative numerical study motivated by pediatric oncology to show the value of using response adaptive pilots for improving financial and health access outcomes.