The cost of drug development: A systematic review
Objectives We aimed to systematically review and assess published estimates of the cost of developing new drugs.Methods We sought English language research articles containing original estimates of the cost of drug development that were published from 1980 to 2009, inclusive. We searched seven databases and used citation tracing and expert referral to identify studies. We abstracted qualifying studies for information about methods, data sources, study samples, and key results.Results Thirteen articles were found to meet our inclusion criteria. Estimates of the cost of drug development ranged more than 9-fold, from USD$92 million cash (USD$161 million capitalized) to USD$883.6 million cash (USD$1.8 billion capitalized). Differences in methods, data sources, and time periods explain some of the variation in estimates. Lack of transparency limits many studies. Confidential information provided by unnamed companies about unspecified products forms all or part of the data underlying 10 of the 13 studies.Conclusions Despite three decades of research in this area, no published estimate of the cost of developing a drug can be considered a gold standard. Studies on this topic should be subjected to reasonable audit and disclosure of - at the very least - the drugs which authors purport to provide development cost estimates for.
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- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2005. "Extraordinary claims require extraordinary evidence," Journal of Health Economics, Elsevier, vol. 24(5), pages 1034-1044, September.
- Patricia M. Danzon & Andrew Epstein & Sean Nicholson, 2004.
"Mergers and Acquisitions in the Pharmaceutical and Biotech Industries,"
NBER Working Papers
10536, National Bureau of Economic Research, Inc.
- Patricia M. Danzon & Andrew Epstein & Sean Nicholson, 2007. "Mergers and acquisitions in the pharmaceutical and biotech industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 307-328.
- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G. & Lasagna, Louis, 1991. "Cost of innovation in the pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 10(2), pages 107-142, July.
- Light, Donald W. & Warburton, Rebecca N., 2005. "Extraordinary claims require extraordinary evidence," Journal of Health Economics, Elsevier, vol. 24(5), pages 1030-1033, September.
- Grabowski, Henry G. & Vernon, John M., 1994. "Returns to R&D on new drug introductions in the 1980s," Journal of Health Economics, Elsevier, vol. 13(4), pages 383-406.
- Christopher Paul Adams & Van Vu Brantner, 2010. "Spending on new drug development," Health Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 130-141.
- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, vol. 22(2), pages 151-185, March.
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