Dissertation Title: “Emergent Forces in Health Care Management: The Role of Patient Foundations and Digital Technology in Shaping New Product Development”

This dissertation investigates the role of emerging, external forces in shaping medical product development. Drawing on concepts from the technology innovation, nonmarket strategy, and health policy literatures, I evaluate 1) the role of a novel type of nonprofit: the patient-led, research-focused rare disease foundation, and 2) the growing use of digital health technologies in clinical research. The findings provide relevant, actionable implications for stakeholders interested in improving and accelerating the therapeutic development process, including patients, biopharmaceutical firm leaders, foundation managers, and regulatory policymakers.

In chapter 1, I propose a conceptual framework to explain how research-focused, patient-led rare disease foundations (RDFs) lower the risk of therapeutic development for industry firms in small, otherwise unattractive, markets by proactively engaging in research-complementary activities. First, I assemble a new dataset to describe and categorize the strategic activities pursued by RDFs. Then, empirically, I show that when an RDF adopts an active strategy—characterized by generation of novel data, creation of research tools, and establishment of collaborations across stakeholders—new clinical trial activity in the disease increases at a faster rate than when an RDF takes a passive, grant funding only approach, which has historically been typical of nonprofit foundations. I supplement this finding with a novel, quantitative case study of one RDF’s successful strategy to engage firms in product development.

In chapter 2, I analyze partnerships between biopharmaceutical firms and RDFs in the development of novel rare disease drugs. I use a retrospective cohort design to compare average clinical development durations for approved, new molecular entity, orphan drugs that were developed with firm-RDF collaboration to similar drugs that were developed by firms-only (without RDF participation). I find that firm-RDF collaboration drugs spent on average 2.6 fewer years in clinical development than firm-only drugs (5.4 vs. 8.0 years, p<0.01). Notably, firm-RDF collaboration drugs rarely spent longer than the industry average in clinical development (7.5 years) whereas this was quite common for firm-only drugs. These findings suggest that such collaborations are nearly eliminating the “long tail” of development programs with protracted timelines. The research-complementary activities RDFs undertake may help firms avoid obstacles in clinical trial execution that typically plague rare diseases, such as challenges with patient recruitment, site identification, and endpoint selection.

In chapter 3 (with Ariel D. Stern), we analyze 20 years of clinical trial records to quantify growth in the use of digital health technologies (DHTs) over the most recent two decades (32% CAGR from 2000-2018). Noting lower technology adoption among trials sponsored by biopharmaceutical firms compared with non-biopharma entities (e.g., academic medical centers, government organizations) we compare DHT usage by sponsor type. We find clear evidence that when biopharma sponsored trials do use DHTs, the trials are more likely to be designated for regulatory review and study therapeutically addressable diseases rather than behavioral conditions, which is consist with biopharma firms' pursuit of product development. Further, biopharma sponsors are more likely to use conventional, sensor-enabled hardware DHTs (e.g., Holter monitors) rather than newer, software-enabled DHTs that lack regulatory precedent (e.g. social media, mHealth apps). Recognition of these differences in DHT use by sponsor type could help regulators issue guidance that encourages appropriate DHT adoption in product development trials where biopharma firms may be hesitant given the regulatory risk.

In summary, this dissertation provides evidence that external forces are altering traditional therapeutic development paradigms and sheds light on mechanisms driving these changes. Patient-led research foundations appear to be increasing clinical activity in rare diseases by changing incentives for product developers. To maximize their impact, RDF managers should invest in research-complementary activities rather than deploying resources only through traditional grant funding strategies. Accordingly, biopharma firms should seek partnerships with RDFs that are pursuing these activities to lower the risks associated with developing new therapies for rare diseases and help avoid costly delays in clinical development. Additionally, the rapidly growing use of digital health technologies has the potential to transform the conduct of clinical research. To further encourage appropriate technology adoption among biopharma firms sponsoring trials, regulators could consider establishing DHT best practices specific to the product development context.