Research and Development Costs for New Drugs by Therapeutic Category

Abstract

The clinical period (i.e. clinical trial and long term animal testing) development costs of a random sample of new chemical entities (NCEs) were examined for differences in average cost. All of the NCEs studied were first tested in humans between 1970 and 1982, and were classified for the purposes of the study by therapeutic class. The costs of unsuccessful projects were included with those of projects that resulted in US marketing approval. Including income forgone from expending funds before returns are earned ('time costs'), the capitalised (i.e. out-of-pocket plus time) clinical period costs per approved NCE were $US70, $US98, $US103 and $US163 million (1993 dollars) for anti-infective, cardiovascular, neuropharmacological and nonsteroidal anti-inflammatory drugs, respectively. Combining the data for all therapeutic categories, the mean clinical period cost per approved NCE was $US93 million. Omitting costs associated with unsuccessful projects, the mean capitalised clinical period costs for approved NCEs ranged from $US7.1 million (for topical steroids) to $US66.7 million (for cardiovascular agents) [1993 dollars]. The estimates of total clinical period costs per approved NCE depend on average out-of-pocket clinical phase costs, attrition rates across phases (i.e. the rates at which compounds drop out of active testing), the probability of marketing approval, and development and regulatory review times. Phase attrition and approval rates are the most important sources of variability in total clinical period costs between therapeutic categories. Development cost estimates by therapeutic category did not correlate strongly with US sales in the fifth year of marketing. Cardiovascular NCEs had much higher than average sales revenues, but clinical development costs for these drugs were only slightly above average. Conversely, nonsteroidal anti-inflammatory drugs attained average sales revenues, but had much higher than average development costs.

The price of innovation: new estimates of drug development costs

“…For an earlier period, DiMasi et al (1995a) found varying average clinical period costs for a number of major therapeutic classes. We will examine costs by therapeutic category in future research.…”

Innovation in the pharmaceutical industry: New estimates of R&D costs

“…The methodological approach used in this paper follows that used for our previous studies, although we apply additional statistical tests to the data (Hansen, 1979;DiMasi et al, 1991DiMasi et al, , 1995aDiMasi et al, ,b, 2003DiMasi et al, , 2004DiMasi and Grabowski, 2007). Because the methodologies are consistent, we can confidently make comparisons of the results in this study to the estimates we found for the earlier studies, which covered earlier periods, to examine and illustrate trends in development costs.…”

The cost of drug development: A systematic review

“…Title and abstract screening eliminated all but 24 of these citations. Most other citations were excluded at this stage because they were not on topic (1651 citations), they were commentaries (19), or they did not provide original estimates of the cost of drug development (22). Two additional, potentially relevant published articles were found through screening of references.…”