Update: The truly staggering cost of inventing new drugs


One of the areas of application for digital biology that most interests me, is in the discovery and development of new drugs. On The Digital Biologist last year, I published an article entitled A new prescription for the pharmaceutical industry? in which I quoted some oft-used estimates of the time and cost of bringing a new drug to market. These estimates at that time, stood at something like a decade or more for research and development and a cost of around $1.2 billion. The numbers I used were based upon a study done by the Federal Trade Commissions's Bureau of Economics in 2008, that essentially reproduced the results of a study done a few years earlier by DiMasi et al.

Oh what a difference 4 years can make ...

After an intrepid reporter or two at Forbes revisited these numbers very recently and adjusted them using the latest data on drug failure rates at some of the largest pharma companies, an even gloomier picture has emerged of the true cost of drug development - and the new numbers are (as the title of the report states) truly staggering.

"The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion."*

In the article, the authors demonstrate that given recent drug failure rates, some companies are spending as much as $11 billion dollars on R&D for each drug that they successfully bring to market, with the "most successful" companies in the study still spending almost $4 billion per drug.

If these new numbers are an accurate reflection of the situation in the pharma industry right now - what has already looked for some years like an increasingly unsustainable business model for these large companies, would now seem to be a problem of potentially disastrous proportions and an urgent call for a new, more efficient and cost-effective way of doing pharamaceutical R&D.

You can see the full article and the table of R&D costs for each company featured in the report at Forbes online.

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