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Cited by 360Pharmaceutical Economics and PolicyPharmaceutical industry and healthcareHealth Systems, Economic Evaluations, Quality of Life

How much does it cost to research and develop a new drug? A systematic review and assessment

Open access
Schlander·2021·PharmacoEconomics
DOI 10.1007/s40273-021-01065-yPMC PMC8516790
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Abstract

BACKGROUND: Debate over the viability of the current commercial research and development (R&D) model is ongoing. A controversial theme is the cost of bringing a new molecular entity (NME) to market. OBJECTIVE: Our aim was to evaluate the range and suitability of published R&D cost estimates as to the degree to which they represent the actual costs of industry. METHODS: We provided a systematic literature review based on articles found in the Pubmed, Embase and EconLit electronic databases, and in a previously published review. Articles published before March 2020 that estimated the total R&D costs were included (22 articles with 45 unique cost estimates). We included only literature in which the methods used to collect the information and to estimate the R&D costs were clearly described; therefore, three reports were excluded. We extracted average pre-launch R&D costs per NME and converted the values to 2019 US dollars (US$) using the gross domestic product (GDP) price deflator. We appraised the suitability of the R&D estimated costs by using a scoring system that captures three domains: (1) how success rates and development time used for cost estimation were obtained; (2) whether the study considered potential sources contributing to the variation in R&D costs; and (3) what the components of the cost estimation were. RESULTS: Estimates of total average capitalized pre-launch R&D costs varied widely, ranging from $161 million to $4.54 billion (2019 US$). Therapeutic area-specific estimates were highest for anticancer drugs (between $944 million and $4.54 billion). Our analysis identified a trend of increasing R&D costs per NME over time but did not reveal a relation between cost estimates and study ranking when the suitability scores were assessed. We found no evidence of an increase in suitability scores over time. CONCLUSION: There is no universally correct answer regarding how much it costs, on average, to research and develop an NME. Future studies should explicitly address previously neglected variables, which likely explain some variability in estimates, and consider the trade-off between the transparency and public accessibility of data and their specificity. Use of our proposed suitability scoring system may assist in addressing such issues.

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Sorted by citations

Authors
Schlander
Venue
PharmacoEconomics
Publisher
Springer Science and Business Media LLC
Published
2021-08-09
Volume
39
Issue
11
Pages
1243-1269
ISSN
  • 1170-7690 (ISSN-L)
  • 1179-2027
DOI
10.1007/s40273-021-01065-y
PMC
PMC8516790
OpenAlex
W3187980261
Cited by
360
References
3
Citations by year
2026: 62 · 2025: 99 · 2024: 93 · 2023: 73 · 2022: 27 · 2021: 6
FWCI
9.77
Type
journal article
Language
en
Open access
Licence
Locations
  • PharmacoEconomics (publishedVersion, cc-by-nc)
  • Europe PMC (PubMed Central) (publishedVersion, other-oa)
  • PubMed Central (publishedVersion, cc-by-nc)
  • PubMed (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Informationszentrum Lebenswissenschaften (ZB MED) (submittedVersion, cc-by-nc)
Funders
Ruprecht-Karls-Universität Heidelberg
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Pharmaceutical Economics and Policy
  • Life Sciences › Pharmacology, Toxicology and Pharmaceutics › Pharmacology › Pharmaceutical industry and healthcare
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
Keywords
drug development costs, research and development costs, new chemical entities, pharmaceutical industry, cost estimation, anticancer agents
MeSH terms
Antineoplastic Agents, Costs and Cost Analysis, Pharmaceutical Preparations, Humans

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