The SMART Model: A Simplified Model for Assessing the Resilience of Therapeutic Program Financial Viability

Under stringent budget constraints, the U.S. DoD must prepare biopharmaceutical interventions for many potential health threats. Developmental success increasingly relies upon supplementing public funding with private investment. Program success in those cases therefore hinges on qualitative assessments of market viability, without empirical modeling to test whether products can plausibly induce private-sector involvement. The Simplified Model for Assessing the Resilience of Therapeutic Program Financial Viability (the "SMART Model") was developed to fill this gap. The model's architecture is grounded in benchmarks for drug development timelines, attrition rates, and preclinical and clinical costs. It uses a concise set of inputs, including phase-specific probabilities of technical success, phase durations, and cost estimates, along with projected market penetration and net present value calculations. In baseline configuration, the model reproduces various attributes of the drug development productivity problem discussed in the extant research productivity literature. Results highlight 2 priority areas rarely discussed. First, for biologic drugs, late-preclinical development-despite lower direct costs-is the single largest contributor to development costs due to its early position in the development process. Second, reducing funding and decision-making delays can improve financial viability to a surprising degree, underscoring the importance of flexible contracting processes and consistent funding streams. Used broadly, the SMART Model can help defense planners to focus resources where they can make the greatest impact on financial sustainability and readiness outcomes, freeing up more resources for other priorities that may lack any plausible private-sector cost sharing.