High-cost outliers distort public discussions about drug development costs, study says

Medical Xpress January 7, 2025
RAND Corporation

The typical cost of developing new medications may not be as high as generally believed, with a few ultra-costly medications skewing public discussions about the cost of pharmaceutical research and development, according to a new RAND study.

The work is published in the journal JAMA Network Open.

Using a novel method to assess spending on research and development for 38 drugs that were recently approved by the U.S. Food and Drug Administration, researchers found that the mean (average) cost of developing a new drug was much higher than the mid-point (median) cost of development.

Researchers estimated a median direct research and development cost of $150 million compared to a mean of $369 million.

Costs were higher after adjusting for the...

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