Menu

Study: Drug Development Costs $2.6B

A new estimate finds the pricetag for taking a drug through the approval process has steadily risen over the past few decades.

Nov 24, 2014
Kerry Grens

WIKIMEDIA, MODVIGIL.COMThe billion-dollar pill is now $2.6 billion. That’s according to a new estimate from the Tufts Center for the Study of Drug Development of the cost of developing a pharmaceutical and getting it approved for human use.

“Because the R&D process is marked by substantial technical risks, with expenditures incurred for many development projects that fail to result in a marketed product, our estimate links the costs of unsuccessful projects to those that are successful in obtaining marketing approval from regulatory authorities,” Joseph DiMasi, the study’s lead investigator, said in a press release.

The $2.6 billion figure is up from an estimated pricetag of $1 billion from an analysis published in 2003.

The study is not yet published, however, and critics have started to raise questions about the numbers. Per The New York Times’s The Upshot: “the bottom line is that the report contains a lot of assumptions that tend to favor the pharmaceutical industry. While the Tufts Center reports that $2.6 billion is the cost to develop ‘a new prescription medicine that gains marketing approval,’ it might be more accurate to say that it’s the cost to develop certain new molecular entities for which pharmaceutical companies did all of the research. That’s very few drugs, in the scheme of things.”

The Life Sci VC blog reviewed the paper and—while pointing out a number of limitations—found the assumptions in the Tufts study to be reasonable. “No analysis is perfect. If Tufts estimate is off the mark for the entire industry, it doesn’t appear off by a huge amount, and certainly not the order of magnitude implied by the critics.”

April 2019

Will Car T Cells Smash Tumors?

New trials take the therapy beyond the blood

Marketplace

Sponsored Product Updates

Getting More Consistent Results by Knowing the Quality of Your Protein
Getting More Consistent Results by Knowing the Quality of Your Protein
Download this guide from NanoTemper to learn how to identify and evaluate the quality of your protein samples!
Myth Busting: The Best Way to Use Pure Water in the Lab
Myth Busting: The Best Way to Use Pure Water in the Lab
Download this white paper from ELGA LabWater to learn about the role of pure water in the laboratory and the advantages of in-house water purification!
Shimadzu's New Nexera UHPLC Series with AI and IoT Enhancements Sets Industry Standard for Intelligence, Efficiency and Design
Shimadzu's New Nexera UHPLC Series with AI and IoT Enhancements Sets Industry Standard for Intelligence, Efficiency and Design
Shimadzu Corporation announces the release of the Nexera Ultra High-Performance Liquid Chromatograph series, incorporating artificial intelligence as Analytical Intelligence, allowing systems to detect and resolve issues automatically. The Nexera series makes lab management simple by integrating IoT and device networking, enabling users to easily review instrument status, optimize resource allocation, and achieve higher throughput.
IDT lowers genomic barriers with powerful rhAmpSeq™ targeted sequencing system
IDT lowers genomic barriers with powerful rhAmpSeq™ targeted sequencing system
Increasing accuracy and reducing cost barriers, IDT’s innovative system delivers simple and cost-effective amplicon sequencing