The estimate from the Tufts Center for the Study of Drug Development. Doctors Without Borders controversially stated: if one believes that developing a medicine costs 2,560 million dollars, "one probably also believes that the Earth is flat".
ML – November 20, 2013 – PharmaKronos
The development of a new drug that then earns market approval, a process that often takes more than a decade, now costs $2.55 billion. But, adding a few other elements, it comes close to 3 billion dollars. This is the estimate that comes from a study by the Tufts Center for the Study of Drug Development (USA). The $2,558 million figure is composed of an average out-of-pocket cost of $1,395 million and a time cost (the returns investors forego while a drug is in development) of $1,163 million. dollars. Continuing there is then the estimated average cost of post-approval research and development – to test new indications, new formulations, new dosages and regimens, and to monitor safety side effects as required by the Food and Drug Administration as a condition of approval – that's $312 million over the product's life cycle, and that pushes the total figure up to $2,870 million.
The updated analysis was done using information provided by 10 pharmaceutical companies on 106 randomly selected drugs that were tested in humans anywhere in the world between 1995 and 2007.
"Drug development remains a costly endeavor despite ongoing efforts by pharmaceutical and biotech companies to curb rising R&D costs," said Joseph DiMasi, director of economic analysis at Tufts CSDD and principal investigator for the study. In an analysis published in 2003, the same experts estimated the cost of each new drug approved at $802 million for products tested between 1983 and 1994.
The $1,044 million figure compared to 2013 (the base year of the new study) indicates a 145% increase between the two study periods, a compound annual growth rate of 8.5%. Factors likely to drive up costs include increased complexity of clinical trials, larger study sizes, increased focus on chronic and degenerative diseases, changes in protocol design to include information for health technology assessment, and the need to also perform comparative efficacy studies.
However, there are those who criticize this analysis: Rohit Malpani, Director of Policy and Analysis for the Campaign for Access to Medicines of Médecins Sans Frontières, who controversially stated: if one believes the fact that developing a medicine costs 2,560 million dollars , “it is probably also believed that the Earth is flat”.
