Simons Observatory: broadband metamaterial antireflection cuttings for large-aperture alumina optics.

We present the design, fabrication, and measured performance of metamaterial antireflection cuttings (ARCs) for large-format alumina filters operating over more than an octave of bandwidth to be deployed at the Simons Observatory (SO). The ARC consists of subwavelength features diced into the optic's surface using a custom dicing saw with near-micrometer accuracy. The designs achieve percent-level control over reflections at angles of incidence up to 20∘. The ARCs were demonstrated on four 42 cm diameter filters covering the 75 to 170 GHz band and a 50 mm diameter prototype covering the 200 to 300 GHz band. The reflection and transmission of these samples were measured using a broadband coherent source that covers frequencies from 20 GHz to 1.2 THz. These measurements demonstrate percent-level control over reflectance across the targeted pass-bands and a rapid reduction in transmission as the wavelength approaches the length scale of the metamaterial structure where scattering dominates the optical response. The latter behavior enables use of the metamaterial ARC as a scattering filter in this limit.

Simons Observatory: characterizing the Large Aperture Telescope Receiver with radio holography.

We present near-field radio holography measurements of the Simons Observatory Large Aperture Telescope Receiver optics. These measurements demonstrate that radio holography of complex millimeter-wave optical systems comprising cryogenic lenses, filters, and feed horns can provide detailed characterization of wave propagation before deployment. We used the measured amplitude and phase, at 4 K, of the receiver near-field beam pattern to predict two key performance parameters: 1) the amount of scattered light that will spill past the telescope to 300 K and 2) the beam pattern expected from the receiver when fielded on the telescope. These cryogenic measurements informed the removal of a filter, which led to improved optical efficiency and reduced sidelobes at the exit of the receiver. Holography measurements of this system suggest that the spilled power past the telescope mirrors will be less than 1%, and the main beam with its near sidelobes are consistent with the nominal telescope design. This is the first time such parameters have been confirmed in the lab prior to deployment of a new receiver. This approach is broadly applicable to millimeter and submillimeter instruments.

The Simons Observatory: metamaterial microwave absorber and its cryogenic applications.

Controlling stray light at millimeter wavelengths requires special optical design and selection of absorptive materials that should be compatible with cryogenic operating environments. While a wide selection of absorptive materials exists, these typically exhibit high indices of refraction and reflect/scatter a significant fraction of light before absorption. For many lower index materials such as commercial microwave absorbers, their applications in cryogenic environments are challenging. In this paper, we present a new tool to control stray light: metamaterial microwave absorber tiles. These tiles comprise an outer metamaterial layer that approximates a lossy gradient index anti-reflection coating. They are fabricated via injection molding commercially available carbon-loaded polyurethane (25% by mass). The injection molding technology enables mass production at low cost. The design of these tiles is presented, along with thermal tests to 1 K. Room temperature optical measurements verify their control of reflectance to less than 1% up to 65∘ angles of incidence, and control of wide angle scattering below 0.01%. The dielectric properties of the bulk carbon-loaded material used in the tiles is also measured at different temperatures, confirming that the material maintains similar dielectric properties down to 3 K.

The Simons Observatory: modeling optical systematics in the Large Aperture Telescope.

We present geometrical and physical optics simulation results for the Simons Observatory Large Aperture Telescope. This work was developed as part of the general design process for the telescope, allowing us to evaluate the impact of various design choices on performance metrics and potential systematic effects. The primary goal of the simulations was to evaluate the final design of the reflectors and the cold optics that are now being built. We describe nonsequential ray tracing used to inform the design of the cold optics, including absorbers internal to each optics tube. We discuss ray tracing simulations of the telescope structure that allow us to determine geometries that minimize detector loading and mitigate spurious near-field effects that have not been resolved by the internal baffling. We also describe physical optics simulations, performed over a range of frequencies and field locations, that produce estimates of monochromatic far-field beam patterns, which in turn are used to gauge general optical performance. Finally, we describe simulations that shed light on beam sidelobes from panel gap diffraction.

How excluding some benefits from value assessment of new drugs impacts innovation.

Payers often assess the benefits of new drugs relative to costs for reimbursement purposes, but they frequently exclude some drugs' option-related benefits, reducing their reimbursement chances, and making them less attractive R&D investments. We develop and test a real options model of R&D investment that shows that excluding option-related benefits heightens drug developers' incentives to avoid high-risk (volatile) R&D investments and instead encourages them to focus on "safer" (positively skewed) investments. Our model and empirical results could partly explain the decline in the number of risky new molecular entities.

Drug development costs when financial risk is measured using the Fama-French three-factor model.

In a widely cited article, DiMasi, Hansen, and Grabowski (2003) estimate the average pre-tax cost of bringing a new molecular entity to market. Their base case estimate, excluding post-marketing studies, was $802 million (in $US 2000). Strikingly, almost half of this cost (or $399 million) is the cost of capital (COC) used to fund clinical development expenses to the point of FDA marketing approval. The authors used an 11% real COC computed using the capital asset pricing model (CAPM). But the CAPM is a single factor risk model, and multi-factor risk models are the current state of the art in finance. Using the Fama-French three factor model we find that the cost of drug development to be higher than the earlier estimate.

Economic evaluation and cost-effectiveness thresholds: signals to firms and implications for R & D investment and innovation.

In this article we describe how reimbursement cost-effectiveness thresholds, per unit of health benefit, whether set explicitly or observed implicitly via historical reimbursement decisions, serve as a signal to firms about the commercial viability of their R&D projects (including candidate products for in-licensing). Traditional finance methods for R&D project valuations, such as net present value analyses (NPV), incorporate information from these payer reimbursement signals to help determine which R&D projects should be continued and which should be terminated (in the case of the latter because they yield an NPV < 0). Because the influence these signals have for firm R&D investment decisions is so significant, we argue that it is important for reimbursement thresholds to reflect the economic value of the unit of health benefit being considered for reimbursement. Thresholds set too low (below the economic value of the health benefit) will result in R&D investment levels that are too low relative to the economic value of R&D (on the margin). Similarly, thresholds set too high (above the economic value of the health benefit) will result in inefficiently high levels of R&D spending. The US in particular, which represents approximately half of the global pharmaceutical market (based on sales), and which seems poised to begin undertaking cost effectiveness in a systematic way, needs to exert caution in setting policies that explicitly or implicitly establish cost-effectiveness reimbursement thresholds for healthcare products and technologies, such as pharmaceuticals.

Financial risk of the biotech industry versus the pharmaceutical industry.

The biotech industry now accounts for a substantial and growing proportion of total R&D spending on new medicines. However, compared with the pharmaceutical industry, the biotech industry is financially fragile. This article illustrates the financial fragility of the biotech and pharmaceutical industries in the US and the implications of this fragility for the effects that government regulation could have on biotech firms. Graphical analysis and statistical tests were used to show how the biotech industry differs from the pharmaceutical industry. The two industries' characteristics were measured and compared, along with various measures of firms' financial risk and sensitivity to government regulation. Data from firms' financial statements provided accounting-based measures and firms' stock returns applied to a multifactor asset pricing model provided financial market measures. The biotech industry was by far the most research-intensive industry in the US, averaging 38% R&D intensity (ratio of R&D spending to total firm assets) over the past 25 years, compared with an average of 25% for the pharmaceutical industry and 3% for all other industries. Biotech firms exhibited lower and more volatile profits and higher market-related and size-related risk, and they suffered more negative stock returns in response to threatened government price regulation. Biotech firms' financial risks increase their costs of capital and make them more sensitive to government regulations that affect their financial prospects. As biotech products grow to represent a larger share of new medicines, general stock market conditions and government regulations could have a greater impact on the level of innovation of new medicines.

Measuring US pharmaceutical industry R&D spending.

Government policy debates on pharmaceutical pricing often turn on whether higher drug prices fund greater company-financed R&D spending. In the US, debate breaks down because each side uses a different measure of R&D spending, and the measures are far apart. Government agencies, Congress and consumer groups use government-generated survey data from the National Science Foundation (NSF), and the pharmaceutical industry uses survey data from the Pharmaceutical Research and Manufacturers of America (PhRMA). This issue is also relevant to academic work because some studies use NSF data, and others use PhRMA data. This article illustrates the pros and cons of these survey data series, and offers a more reliable, comprehensive and replicable alternative series, based on Compustat data.

Measuring the patient health, societal and economic benefits of US pediatric therapeutics legislation.

Through at least the mid-1990s, children were often referred to as 'therapeutic orphans' for whom many treatments were administered without the benefit of appropriate studies to guide drug labeling for dosing and other critical therapeutic decisions. At that time, there were no incentives for manufacturers to pursue such work, nor regulatory requirements to compel these studies. Congress addressed this by including an important provision titled the Best Pharmaceuticals for Children Act (BPCA) in the 1997 Food and Drug Administration Modernization and Accountability Act. This was complemented by another key piece of legislation, the Pediatric Research Equity Act (PREA) in 2003. The former Act and its successors created an incentive for firms to study on-patent drugs in pediatric populations by extending the market exclusivity of a medicine by 6 months. The latter was a requirement that provided the US FDA with the authority to require studies of drugs in children if an adult indication also occurs in children. In the current paper, we consider the effects of both pieces of legislation in terms of the health, societal, and economic benefits they have likely imparted and will continue to provide in the future. We conclude that the gains have been substantial - both in terms of safer and more effective use of medicines in children and in terms of new research that has been incentivized by the BPCA exclusivity provision. We estimate the gross economic benefits from the latter alone to be approximately $US360 billion.

Financial effects of pharmaceutical price regulation on R&D spending by EU versus US firms.

EU countries closely regulate pharmaceutical prices, whereas the US does not. This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&D. We tested the relationship between price regulation and R&D spending, and estimated the costs of tight EU price regulation. Although results show that EU consumers enjoyed much lower pharmaceutical price inflation, we estimated that price controls cost EU firms 46 fewer new medicines and 1680 fewer research jobs during our 19-year sample period. Had the US used controls similar to those used in the EU, we estimate it would have led to 117 fewer new medicines and 4368 fewer research jobs in the US.

Comparative effectiveness regulations and pharmaceutical innovation.

As healthcare reform evolves and takes shape, comparative effectiveness research (CER) appears to be one of the central topics on the national healthcare agenda. Over the past couple of years, comparative effectiveness has been explicitly incorporated in more than ten bills. For example, the passage of the American Recovery and Reinvestment Act of 2009 authorized $US1.1 billion for CER. Comparative effectiveness, when costs are formally considered, offers the hope of efficient resource allocation within US healthcare markets. However, the future operationalization and implementation of comparative effectiveness is uncertain, and there exist potentially negative, and unintended, consequences under certain scenarios. One example, and the focus of this article, is pharmaceutical innovation. Incentives for pharmaceutical R&D could be affected if drug development costs increase as a result of firms having to bear, directly or indirectly, the costs of running larger, randomized, head-to-head comparative effectiveness trials. While this may or may not be the case with current and future comparative effectiveness legislation and its subsequent implementation, the potential consequences for pharmaceutical innovation warrant recognition. This is the purpose of the article. To achieve this goal, we develop several models of clinical trial design, drug development costs and R&D investment. By example, we shed light on the causal links between the models and the ways in which industry R&D investment can be affected.

Future of drug development: the economics of pharmacogenomics.

This report models how the evolving field of pharmacogenomics, the science of using genomic markers to predict drug response, may impact drug development times, attrition rates and costs. While there still remains an abundance of uncertainty around how pharmacogenomics will impact the future landscape of pharmaceutical and biological R&D, we identify several likely outcomes. We conclude pharmacogenomics (as defined in this context) has the potential to significantly reduce both expected drug development costs via higher probabilities of technical success, shorter clinical development times and smaller clinical trials. Our conclusions are, of course, accompanied by numerous caveats.