The Truly Staggering Cost Of Inventing New Drugs
10 February 2012 | FORBES | Matthew Herper
Matthew Herper covers science and medicine for FORBES.
The Truly Staggering Cost Of Inventing New Drugs
10 February 2012 | FORBES | Matthew Herper
Matthew Herper covers science and medicine for FORBES.
Natureza Research Note: The development of new antibiotics has slowed dramatically over the past few decades, primarily due to economic, scientific, and regulatory challenges, compounded by the rapid emergence of bacterial resistance. The last truly novel class of antibiotics to reach the market was in 1987, marking the beginning of what experts call the "discovery void".
During the Super Bowl, a representative of the pharmaceutical company Eli Lilly posted the on the company’s corporate blog that the average cost of bringing a new drug to market is $1.3 billion, a price that would buy 371 Super Bowl ads, 16 million official NFL footballs, two pro football stadiums, pay of almost all NFL football players, and every seat in every NFL stadium for six weeks in a row. This is, of course, ludicrous.
The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion.
Research Spending Per New Drug
| Company | Number Drugs Approved | R&D Spending Per Drug ($Mil) | Total R&D Spending 1997-2011 ($Mil) |
|---|---|---|---|
| AstraZeneca | 5 | 11,790.93 | 58,955 |
| Glaxo Smith Kline | 10 | 8,170.81 | 81,708 |
| Sanofi | 8 | 7,909.26 | 63,274 |
| Roche Holding | 11 | 7,803.77 | 85,841 |
| Pfizer | 14 | 7,727.03 | 108,178 |
| Johnson & Johnson | 13 | 5,885.65 | 88,285 |
| Eli Lilly & Co. | 11 | 4,577.04 | 50,347 |
| Abbott Laboratories | 8 | 4,496.21 | 35,970 |
| Merck & Co Inc | 16 | 4,209.99 | 67,360 |
| Bristol-Myers Squibb Co. | 11 | 4,152.26 | 45,675 |
| Novartis AG | 21 | 3,983.13 | 83,646 |
| Amgen Inc. | 9 | 3,692.14 | 33,229 |
| Sources: InnoThink Center For Research In Biomedical Innovation; Thomson Reuters Fundamentals via FactSet Research Systems | |||
