Other Analysis of Drug Development Costs

• October 19, 2006. Government Accountability Office report requested by Rep. Waxman, Sen. Durbin and Sen. Kennedy. New Drug Development - Science, Business, Regulatory and Intellectual Property Issues Cited as Hampering Drug Development Efforts.
  • Full Report.
  • Fact Sheet Prepared by Rep. Waxman's Office.
  • Joint Press Release from the offices of Waxman, Kennedy and Durbin.
  • PhRMA Statement on GAO Report.
  • News Stories
    • December 20, 2006. Christopher Lee for the Washington Post. New Drugs Declining, Research Costs Increasing, GAO Says.
    • December, 2006. Kaiser Network. Annual Research, Development Spending by Pharmaceutical Industry Increased by 147% From 1993 Through 2004, But 'Productivity' Has Been 'Declining,' GAO Report Finds.
• November, 2004. Jim Gilbert, Preston Henske and Ashish Singh for Bain % Co. Paper published in Windhover Information, Inc.'s In Vivo Business and Medicine Report. The Rising Cost of New Drugs.
• June 23, 2004. Cutting Edge Information. Clinical Trials Consume 37% of Pharmaceutical R&D Spending. This is a press release announcing the publication of a report - which is only available for purchase - titled Accelerating Clinical Trials: Budgets, Patient Recruitment and Productivity.
• June 13, 2003. Letter from Senators Daschle, McCain and Kennedy to the GAO requesting a cost study of HIV/AIDS drugs.
• February, 2003. Joseph A. DiMasi, Ronald W. Hansen, and Henry G. Grabowski. Journal of Health Economics. The price of innovation: new estimates of drug development costs. This is the study that concludes that the average capitalized cost of R&D for a New Chemical Entity is $802 million. The authors are from the Tufts University Center for the Study of Drug Development, which is perhaps the best known source of information about drug development costs. Research at this center is sometimes funded by the pharmaceutical industry, and its reports often are used to support industry lobbying efforts. The Center does not feature much work on the issue of the government's role in the development of new drugs, or attempt to examine issues such as the degree to which private sector research is focused on non-essential products. However, the rigor of many studies is commendable, and the staff is helpful on a wide range of important topics, if you know the right questions to ask.
  • Full text of study
  • Tufts press release
  • Tufts backgounder on methodology
  • Center for the Study of Drug Development website
  • May 13, 2003. Tufts press release. Total Cost to Develop a New Prescription Drug, Including Cost of Post-Approval Research, is $897 Million. (This is a follow-up statement which adds post-FDA approval testing data to the earlier drug development estimate.)
  • February 21, 2003. James Love. Comparison of DiMasi 2003 and DiMasi 1991.
  • November 30, 2001. CPTech press release on Tufts study and IRS data. IRS Data Shows Drug Industry Cost Estimates Exaggerated.
  • February 2003. Editorial from Richard Frank published in the Journal of Health Economics, New Estimates of Drug Development Costs.

• July 17, 2002. Families USA Report. Profiting from Pain: Where Prescription Drug Dollars Go.
• December 3, 2001. Gardiner Harris for the Wall Street Journal. Cost of Developing New Medicine Swelled to $802 Million, Research Study Reports.
• October 2001. The Golobal Alliance of TB Drug Development. The Economics of TB Drug Development.
• July/August 2001. Bob Huff. GMHC Treatment Issues Volume 15, Number 7/8. What Does R&D Really Cost? Accompanied by a one-page summary document: Estimating HIV Drug Development Costs from Publicly Disclosed Data.
• July 23, 2001. Public Citizen. Rx R&D Myths: The Case Against the Drug Industry's R&D "Scare Card." The following documents are related to this study:
  • August 8, 2001. Earnest and Young LLP. Study for PhRMA. Pharmaceutical Industry R&D Costs: Key Findings about the Public Citizen Report.(pdf format)
  • July 23, 2001. Christopher Molineaux, Vice President, Public Affairs, PhRMA. Initial Response to the Study.
• July 2001. Report by Families USA. Off the Charts: Pay, Profits and Spending by Drug Companies.
• 1993, the Office of Technology Assessment's widely quoted Pharmaceutical R&D: Costs, Risks, and Rewards, OTA-H-522, GPO stock #052-003-01315-1, NTIS order #PB93-163376. The estimates most often quoted from this study are based upon data from the Tufts Center, see above.