Median Drug Development Cost is $985 Million: Study

Researchers from academic institutions in the UK and Belgium say their study of 63 of the 355 new therapeutic drugs and biologic agents approved by FDA between 2009 and 2018 shows that the estimated median capitalized research and development cost per product was $985 million, counting expenditures on failed trials. The mean was estimated to be $1.3 billion. Writing in the Journal of the American Medical Society, the researchers say that the mean cost of developing a new drug has been the subject of debate, with estimates ranging from $314 million to $2.8 billion.

Estimates in the study differed across therapeutic areas, with costs of developing cancer drugs the highest, the report says.

The authors suggest that differences between their findings and previous studies may reflect the spectrum of products analyzed, the restricted availability of data in the public domain, and differences in underlying assumptions in the cost calculations.