A recent economic evaluation estimated the mean cost of bringing a new drug to market in the U.S. at $879.3 million, inclusive of the costs of failed drug candidates and opportunity costs of capital.

The study, published in JAMA Network Open, utilized data from public and proprietary sources spanning 2000 to 2018 to develop an analytical model of the drug development process.

Researchers found that the mean cash outlay for developing a new drug was $172.7 million, but this figure increased to $515.8 million when accounting for drug failures and to $879.3 million when also including capital costs. However, these costs varied widely across therapeutic areas, ranging from $378.7 million for anti-infective drugs to over $1.7 billion for pain and anesthesia medications.

The study also revealed that the research and development (R&D) intensity, defined as the ratio of R&D spending to total sales, remained relatively stable for large pharmaceutical companies from 2008 to 2019. During this period, sales for these companies grew by 10%, while their R&D spending increased by 27.9%.

In contrast, the pharmaceutical industry as a whole experienced a 15.6% decline in sales but a 25.8% increase in R&D spending over the same period. The authors suggested that these findings indicated there might be room for reducing drug prices without compromising innovation, particularly among larger manufacturers.

The investigation highlighted the importance of understanding the factors contributing to drug development costs to inform policies aimed at reducing costs, encouraging innovation, and improving patient access to medications.

Further research is needed to align drug development with public health needs and to explore strategies for improving success rates at each stage of the development process. 

Conflict of interest disclosures can be found in the published article.