Ronald W. Hansen

The price of innovation: new estimates of drug development costs

The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.

Cost of innovation in the pharmaceutical industry

The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is

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

114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of

Research and Development Costs for New Drugs by Therapeutic Category

231 million (1987 dollars).

The Cost of Drug Development

The research and development costs of 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug and biologics development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per approved new compound is

Misleading congress about drug development: Reply.

1395 million (2013 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 10.5% yields a total pre-approval cost estimate of

Compensation Alternatives for Occupational Disease and Disability

2558 million (2013 dollars). When compared to the results of the previous study in this series, total capitalized costs were shown to have increased at an annual rate of 8.5% above general price inflation. Adding an estimate of post-approval R&D costs increases the cost estimate to

Effects of Cost Containment on Pharmaceutical Innovation

2870 million (2013 dollars).

Setting the record straight on setting the record straight: Response to the Light and Warburton rejoinder

SummaryThe 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

Commentary Misleading Congress about Drug Development: Reply

US70,