How Much Does It Cost to Research and Develop a New Drug? A Systematic Review and Assessment
Level 1 - systematic review of randomized trials
Systematic review of economic and R&D cost estimation studies (graded Level 1 by design analogy, not clinical CEBM).
OpenAlex W3187980261 · doi:10.1007/s40273-021-01065-y
What was done
The authors conducted a systematic literature review across PubMed, Embase, and EconLit (plus a prior review) for studies published before March 2020 that estimated total drug research and development (R&D) costs per new molecular entity (NME). They excluded reports lacking clearly described methods, converted all average pre-launch R&D cost estimates into 2019 US dollars using the GDP price deflator, and evaluated the suitability of the estimates across three domains: determination of success rates/development times, consideration of sources of cost variation, and included cost components.
What was found
Across 22 included articles containing 45 unique cost estimates, total average capitalized pre-launch R&D costs per NME ranged from $161 million to $4.54 billion (2019 US$). Therapeutic area-specific estimates were highest for oncology drugs, ranging from $944 million to $4.54 billion. While R&D costs per NME trended upward over time, study suitability scores did not improve over time and showed no relationship to the magnitude of the cost estimates.
Why it matters
This review demonstrates that there is no consensus figure for the cost of developing a new drug, with published estimates spanning nearly a thirty-fold difference due to differing methodologies, data transparency, and cost accounting frameworks.
Limits
The review relies on underlying cost studies that frequently depend on proprietary, non-public industry data or varying definitions of capitalized R&D costs. Detailed numerical breakdowns for specific non-oncology therapeutic areas and full scoring metrics were not provided in the abstract.
Cited by
- context Bringing a new pharmaceutical drug to market costs approximately $2 billion and takes at least 10 years.