04 Mar Cancer Drugs Most Expensive to Develop
MedicalResearch.com Interview with:
Olivier Wouters, Ph.D.
Assistant Professor of Health Policy
Department of Health Policy (COW 2.06)
London School of Economics and Political Science
MedicalResearch.com: What is the background for this study? What are the main findings?
Response: Drug companies often point to high research and development costs as justification for the rising prices of new medicines.
Yet most prior analyses of research and development costs have been based on confidential data voluntarily supplied by drug companies to researchers with financial ties to the industry. Independent teams have not been able to verify those findings.
MedicalResearch.com: What are the main findings?
Response: Using detailed financial reports filed by drug companies with the US Securities and Exchange Commission, this study estimated that the median cost of bringing a new drug to market was $985 million, and the average cost was $1.3 billion. This was based on data for 63 new drugs and biologic agents, developed by 47 companies, approved in the US between 2009 and 2018.
The cost of developing drugs varied across different disease areas, with cancer drugs being the most expensive. These estimates took into account spending on failed trials for other drug candidates, as well as the cost of raising money from investors.
These findings are in stark contrast to previous studies, which have placed the average cost of drug development as high as $2.8 billion.
The selective reporting of financial data by drug companies meant that drugs in some disease areas were overrepresented in the present study. The sample was also comprised mostly of smaller-sized companies, since many larger firms did not make their data publicly available.
MedicalResearch.com: What should readers take away from your report?
Response: This is one of the most comprehensive studies to date on the costs of drug development based on publicly available data. The costs of bringing a new drug to market may be lower than has been previously claimed by the pharmaceutical industry.
While it is essential that the pharmaceutical industry continues to find it profitable to develop new drugs that save or improve lives, this study calls into question whether the high price tags of some new drugs are reasonable. If drug companies want to keep asserting that research and development costs justify high prices, then they should make their data available for public scrutiny.
MedicalResearch.com: What recommendations do you have for future research as a result of this work?
Response: Future research should estimate research and development costs for a larger, more representative sample of products using publicly available data. For this to happen, greater transparency is needed.
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