Drug Development: The Short Story
7. The Cost of Drug Development

The cost of this process has increased significantly during the past thirty-four years. Using industry averages reported to the Pharmaceutical Research and Manufacturer's Association, the cost of drug development has increased from $4 million in 1962 to over $450 - $700 million in 2000. A significant amount of this increase has been attributed to compliance with regulatory requirements.

The costs above include the cost of capital investments and the cost of research that did not lead to a new drug. According to a study reported by W. Leigh Thompson, Profound Quality Resources (Annual Reports in Medicinal Chemistry, 30, 339 - 345, 1995), the figure for 1995 is closer to $627 million when current investments are compared to the number of current approvals rather than to drugs which were discovered two decades ago.