Typical Cost of Developing a New Drug Is Skewed by Few High-Cost Outliers

An interesting hypothesis! Food for thought!

"The typical cost of developing new medications may not be as high as generally believed, with a few ultra-costly medications skewing public discussions about the cost of pharmaceutical research and development, according to a new RAND study.

Using a novel method to assess spending on research and development for 38 drugs that were recently approved by the U.S. Food and Drug Administration, researchers found that the mean, or average, cost of developing a new drug was much higher than the mid-point (median) cost of development.

Researchers estimated a median direct research and development cost of $150 million compared to a mean of $369 million. ...

The average cost of developing a new drug was 26 percent lower when excluding just two drugs, dropping from $1.3 billion to $950 million. The findings are published in the journal JAMA Network Open. ..."

Typical Cost of Developing a New Drug Is Skewed by Few High-Cost Outliers | RAND

Use of Clinical Trial Characteristics to Estimate Costs of New Drug Development (open access)