[Ip-health] New Tufts study on R&D costs

Outterson, Kevin mko at bu.edu
Fri Nov 14 10:25:24 PST 2014


$2.44 billion per NME

Assume a 10 year lag; 2003 global pharma R&D spending was self reported at 52.3 billion; 2013 NME FDA approvals = 27.  1.93 billion; inflating for CPI = $2.44 billion.  Estimate ignores BLAs, non-NMEs, approvals outside US, actual company discount rate (much higher than CPI), R&D spending is self-reported, and the fact that most 2003 R&D did not relate to the drugs actually approved in 2013. #justforfun

Kevin Outterson
___________________
Professor of Law & N. Neal Pike Scholar in Health and Disability Law - Boston University
Associate Fellow, Chatham House
Editor in Chief, Journal of Law, Medicine & Ethics
Blogging health law at The Incidental Economist
Research papers at SSRN & Google Scholar
@koutterson  |  617 935 6517

On Nov 14, 2014, at 12:57 PM, Aidan Hollis <ahollis at ucalgary.ca> wrote:

> Biologics are already in the $1.7bn range. So given that they will be using data from a very low productivity period, when new approvals were dragging and budgets were relatively high, I predict precisely $2.17bn
> 
> Current FDA approvals are sharply up, but I guess the most recent years’ data will not be included.
> 
> Aidan Hollis
> Professor of Economics
> University of Calgary
> ahollis at ucalgary.ca <mailto:ahollis at ucalgary.ca>
> +1 403 220 5861
> 
> http://econ.ucalgary.ca/profiles/aidan-hollis <http://econ.ucalgary.ca/hollis.htm>
> 
> Incentives for Global Health
> http://www.healthimpactfund.org <http://www.healthimpactfund.org/>
> On Nov 14, 2014, at 10:41 AM, Gaelle Krikorian <gaelle.krikorian at gmail.com> wrote:
> 
> Hi,
> 
> I bet $1,705 billion. They have at least to double the figure…
> 
> Gaelle
> 
> 
> 
> 
> Le 14 nov. 2014 à 18:35, Jamie Love <james.love at keionline.org> a écrit :
> 
>> Next week, a new version of the Tufts study on R&D costs will be released.
>> 
>> KEI will give $50 to the person who comes the closed in predicting the new
>> figure for the cost of R&D for the lead indication of a new chemical entity.
>> 
>> An abstract of the earlier 2003 study,"The price of innovation: new
>> estimates of drug development costs" is available here:
>> 
>> http://www.ncbi.nlm.nih.gov/pubmed/12606142
>> 
>> 
>> The 2003 study put the number at $802 million (not $800 million, but $802
>> million), in 2000 dollars.
>> 
>> As I said, $50 for the closest estimate, published on IP-Health, before the
>> new number is announced (or leaked).
>> 
>> Jamie
>> 
>> --
>> James Love.  Knowledge Ecology International
>> http://www.keionline.org/donate.html
>> KEI DC tel: +1.202.332.2670, US Mobile: +1.202.361.3040, Geneva Mobile:
>> +41.76.413.6584, twitter.com/jamie_love
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> 
> ----------------------
> Gaelle Krikorian
> galk at free.fr
> 
> Tel +33 (0)6 09 17 70 55
> 
> 
> 
> 
> 
> 
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