Does It Still Cost $2.7B to Develop a Drug? Regardless, Patent Protection is Key!
We have previously reported that the cost to develop a new drug is roughly $2.7B (inflation adjusted). This price tag was determined by the Tufts Center for the Study of Drug Development (CSDD). However, a new study published in JAMA Internal Medicine calls this number into question. The disparity in drug development cost estimates between the CSDD and other groups prompted the JAMA authors to conduct their own study. For instance, the independent group Public Citizen estimated the cost to be around $320M (inflation adjusted). Unlike other estimates, the JAMA study places the cost of developing a new cancer drug to be around $648M. The authors go into further detail to compare and contrast the metrics and methods by which other groups have calculated drug costs. Whereas the CSDD study used private information from ten large pharmaceutical companies, the Public Citizen study used publicly available Securities and Exchange Commission filings. Both analyses looked at companies with multiple drugs on the market. However, the JAMA study focused on ten companies that each only developed a single drug, which, the authors argue, yields a more “transparent” analysis.