title: Cost of innovation in the pharmaceutical industry.
abstract: The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).
authors: Center for the Study of Drug Development, Tufts University, Boston, MA 02111.
authors: J A
authors: JA
authors: DiMasi
authors: R W
authors: RW
authors: Hansen
authors: H G
authors: HG
authors: Grabowski
authors: L
authors: L
authors: Lasagna
mesh_terms: D003365:Costs and Cost Analysis / Q000706:statistics & numerical data*; D003625:Data Collection; D003627:Data Interpretation, Statistical; D004341:Drug Evaluation / Q000191:economics*; D004353:Drug Evaluation, Preclinical / Q000191:economics*; D004345:Drug Industry / Q000191:economics*; D006801:Humans; D014481:United States