Wednesday, April 8, 2009

Cost of Bringing New Drugs to Market

Most of us have seen an email making the Internet rounds on the cost of manufacturing a drug (e.g., Advil), the retail price, and the huge markup… 100s or 1,000s of percent. What’s not factored in is the cost of actually bringing a drug to market.

According to a report by the Tufts Center for the Study of Drug Development, the average total research and development cost for new drugs in the late 1990s was $897 million. THAT’S ALMOST ONE BILLION DOLLARS. THAT’S THE AVERAGE. That total was more than double the average total cost of bringing a new drug to market in the 1980s, and more than five times the cost in the 1970s.

Another recent study estimated that only 21.5% of drugs that began Phase I trials ever get to market. This boils down to just over one-fifth of the drugs that looked promising enough in animal trials to warrant human trials proved to provide an advantage over drugs currently on the market.

So, the next time you pop an Advil, Aleve, or Aspirin and think about how much money the drug companies are making, maybe you will factor in their R&D costs and the lives that were saved, prolonged, or improved along the way.

Enjoy, take care, and good health to you all.

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