A paper by DiMasi et al. (2003) found that the cost of drug development was $802 million. This is a highly contentious number. Drug companies have used this number to lobby regulators to loosen the FDA approval process. The data used in the study, however, was confidential and could not be replicated by other authors.
A new paper by Adams and Branter (2010) replicates the methods of the older study with publicly available data and find that the previous number is an underestimate. The paper claims that the cost of drug development is actually $1 billion. This is not an absolute number, however, as there is a substantial variation drug development expenditure depending on the therapeutic category.
- Adams CP, Brantner VV (2010) “Spending on New Drug Development” Health Econ. 19: 130–141 (2010)