Health Affairs

Health Affairs, 25, no. 2 (2006): 420-428 doi: 10.1377/hlthaff.25.2.420 © 2006 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

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Estimating The Cost Of New Drug Development: Is It Really $802 Million?

Christopher P. Adams and Van V. Brantner

This paper replicates the drug development cost estimates of Joseph DiMasi and colleagues ("The Price of Innovation"), using their published cost estimates along with information on success rates and durations from a publicly available data set. For drugs entering human clinical trials for the first time between 1989 and 2002, the paper estimated the cost per new drug to be $868 million. However, our estimates vary from around $500 million to more than $2,000 million, depending on the therapy or the developing firm.

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