It is two-and-a-half times more expensive to research a new medication now than it was in 1987, even adjusting for inflation. That is the conclusion reached by researchers at the Tufts University Centre for the Study of Drug Development in the U.S.A..
In the 1990s, drug firms spent an average of $121 million out-of-pocket in research prior to clinical trials but that figure rises to $336 million when the costs of capital are included. The clinical testing stage consumes $282 million or $466 million when capital costs are factored in. The capital costs are determined by figuring how much would be returned by investing the money at 11 percent over time.
Drug company executives point out that patent-protection laws which have come under attack by some critics are vital to encouraging and protecting such huge investments.
Source: Gardiner Harris, Cost of Developing Drugs Found to Rise, Wall Street Journal, December 3, 2001.
For text (WSJ subscribers) http://interactive.wsj.com/archive/SB1007336440403996240.htm
For study info http://www.tufts.edu/med/csdd/Nov30CostStudyPressRelease.html
For more on Drug Research Costs http://www.ncpa.org/iss/hea/
FMF Policy Bulletin\11 December 2001
