The cost to develop and win marketing approval for a new drug is $2.6 bn
The cost to develop and win marketing approval for a new drug is $2.6 bn. This data was obtained in a study by the Tufts Center of Drug Development. Analysis derived information from clinical trials of 106 drugs tested in 1995–2007. Average out-of-pocket cost is $1,4 bn. Additional time costs (expected returns that investors forego while a drug is in development) are $1.2 bn. Post-approval R&D averages $321 mln bringing the total price to $2.9 bn. Comparison to data published in 2003 revealed that drug development costs increased by 145% over the 10-year period. Experts tend to associate higher expenses with a risk of failure early on in research, a necessity to carry out more complex studies using expensive diagnostics and to purchase comparator drugs in order to meet new regulatory requirements. Also newer drugs tend to be more specialized and, as a result, more expensive. Therefore, having to include comparator drugs, which are also equally expensive, results in substantially higher costs.
Sources: Drug Discovery and Development, Remedium