GEN article reports on new drug research and development costs

A policy specialist and a healthcare economist both say that the oft-quoted cost of $1.32 billion to bring a new drug to market does not hold up to close scrutiny, reports Genetic Engineering & Biotechnology News (GEN). The researchers emphasize that available cost data cannot be trusted because the numbers are subject to numerous internal and external sources of variability, according to the July issue of GEN (http://www.genengnews.com/gen-articles/drug-r-d-costs-questioned/3707).

"With heated discussions still taking place over healthcare reform and a regulatory environment increasingly focused on safety, the GEN point of view piece should serve as an important article for multiple discussions on new drug R&D and commercialization costs," says John Sterling, Editor in Chief of GEN. "We hope that the article leads to an informative debate on this crucial issue of new drug research and development costs."

Donald W. Light, Ph.D., a professor at the University of Medicine and Dentistry of New Jersey and the Lokey visiting professor in human biology at Stanford University, and Rebecca Warburton, Ph.D., an associate professor at the University of Victoria (British Columbia), claim that pharmaceutical firms list their R&D costs as high as possible to garner greater prices for their products. Yet, continue the article's authors, a number of independent review groups report that 85% of new drugs exhibit few if any advantages over existing drugs.

Noting that the "R" in R&D is basically unknown and highly variable, Drs. Light and Warburton estimate that the median development ("D") cost for a new drug in 2000 was about $60 million (ranging from $13 million to $203 million depending on the type of drug) while the median D cost in 2006 was approximately $98 million (ranging from $21 million to $333 million).