Cost of innovation in the pharmaceutical industry.

Journal Article (Journal Article)

The research and development costs of 93 randomly selected new chemical entities (NCEs) were obtained from a survey of 12 U.S.-owned pharmaceutical firms. These data were used to estimate the pre-tax average cost of new drug development. The costs of abandoned NCEs were linked to the costs of NCEs that obtained marketing approval. For base case parameter values, the estimated out-of-pocket cost per approved NCE is $114 million (1987 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a 9% discount rate yielded an average cost estimate of $231 million (1987 dollars).

Full Text

Duke Authors

Cited Authors

  • DiMasi, JA; Hansen, RW; Grabowski, HG; Lasagna, L

Published Date

  • July 1991

Published In

Volume / Issue

  • 10 / 2

Start / End Page

  • 107 - 142

PubMed ID

  • 10113009

Electronic International Standard Serial Number (EISSN)

  • 1879-1646

International Standard Serial Number (ISSN)

  • 0167-6296

Digital Object Identifier (DOI)

  • 10.1016/0167-6296(91)90001-4

Language

  • eng