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 US$ 403 million (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 US$ 802 million (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.
Original Source [2]
Links:
[1] http://admin.indiaenvironmentportal.org.in/feature-article/price-innovation-new-estimates-drug-development-costs
[2] http://fds.duke.edu/db?attachment-25--1301-view-168
[3] http://admin.indiaenvironmentportal.org.in/category/author/joseph-dimasi
[4] http://admin.indiaenvironmentportal.org.in/category/author/ronald-w-hansen
[5] http://admin.indiaenvironmentportal.org.in/category/author/henry-g-grabowski
[6] http://admin.indiaenvironmentportal.org.in/category/journal/journal-health-economics
[7] http://admin.indiaenvironmentportal.org.in/category/thesaurus/drugs
[8] http://admin.indiaenvironmentportal.org.in/category/thesaurus/drug-industry
[9] http://admin.indiaenvironmentportal.org.in/category/thesaurus/research
[10] http://admin.indiaenvironmentportal.org.in/category/thesaurus/united-states-america-us
[11] http://admin.indiaenvironmentportal.org.in/category/thesaurus/patents
[12] http://admin.indiaenvironmentportal.org.in/category/thesaurus/private-sector
[13] http://admin.indiaenvironmentportal.org.in/category/thesaurus/multicorporations