Cost to Bring a New Drug to Market Is $2.6 Billion According to Tufts - 3X More Than in 2003!

According to a new study by the Tufts Center for the Study of Drug Development (CSDD), which receives funding from the pharmaceutical industry, the estimated cost to develop a new Rx drug for marketing in the U.S. is $2,558 million or $2.6 billion (see press release). That's 3.25 times the $800 previously estimated and frequently cited by the pharmaceutical industry, pharma trade publications, and the general media.

I have tackled the estimated $800 million drug develop cost gorilla before and garnered a lot of comments from readers, including Dr. Joseph DiMasi, whose team at Tufts came up with that number way back in 2003 (for more on that, read "Tufts Hangs Tough on Opportunity Cost Analysis").

It's about time CSDD threw out the old number and came up with a new, much larger number! But Tufts is not the only academics who have tackled the problem. As I reported in 2011, the London School of Economics and Political Science (LSEPS) cam sup with quite a different - much lower! - estimate of $59 million (see "A New Estimate of Drug Development Cost") and the Office of Health Economics (OHE) at the University College London estimated the cost to be $1.5 billion in 2013 (see here).

These various historic estimates are summarized in the following chart:

Click on chart for an enlarged view.

No doubt the new Tufts estimate will reign supreme in coming PR campaigns launched by the pharmaceutical industry and repeated ad naseum in the press.

You'll never guess who said the oft-cited 2003 Tufts estimate was  "one of the great myths of the industry".

Read more »