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Monday, 12 August 2013

What is the R&D Cost of a New Medicine?


Here's a recent (2012), and excellent, analysis and estimate of the development costs of a new medicine (specifically an NME, a chemically distinct, novel molecule). There is a good overview of the historical trends in costs and attrition, and a collection of all significant previous estimates of the R&D costs of a new drug. There's some nice exploration of the sensitivity of the costs to various factors, and differential success and costs across various therapeutic areas.

In case you wanted to jump to the punchline, the costs in this study is $1,506,000,000 (i.e. $1.5bn) at 2011 USD prices.

The report is free, with only registration at the OHE website required to download the report. Great value!

%T The R&D Cost of a New Medicine
%A J. Mestre-Ferrandiz
%A J. Sussex
%A A. Towse
%I Office of Health Economics
%D 2012
%O ISBN 978-1-899040-19-3

jpo



1 comment:

John Overington said...

The more I think about this number the more difficult it gets to quantify - Pharma run a business making profits for shareholders - optimising profits, and not a business optimizing NME output. Many/most trials that a drug company run will be expanding the indications for a previously approved NME - check out the pipeline documents for some of the big companies to get an idea of just how many. These costs will be big (since they are trials), but will appear to dilute the per NME output. In fact a perfect business, would probably not innovate and rely on finding new indications for previously launched safe pharmaceuticals.....