Drugmakers that complain about the growing cost to bring new molecular entities to market aren’t exaggerating, according to a study released last month by the Tufts Center for the Study of Drug Development (CSDD). Even with the initiation of mechanisms to speed drug development such as breakthrough therapy designation and accelerated review, developing a medicine to FDA approval still takes, on average, more than 10 years and now costs an estimated $2.558 billion, in 2013 dollars, according to Joseph DiMasi, director of economic analysis at Tufts CSDD and principal investigator for the study, which was co-authored by Henry Grabowski in the Duke University Department of Economics and Ronald Hansen at the University of Rochester’s Simon Business School.
The figure is based on an estimated average out-of-pocket cost – actual cash outlays – of $1.395 billion plus estimated time costs – the expected returns that investors forego while a drug is in development – of $1.163 billion.
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