[Ip-health] New research synthesis on costs of pharmaceutical research and development

Marcela Vieira marcelacfvieira at gmail.com
Fri Jan 31 02:37:54 PST 2020

Dear all,
(apologies for cross-posting)

We would like to share with you a new research synthesis on the costs of
pharmaceutical research and development. We believe it to be of relevance
to all working on innovation and access to medicines and to current policy
debates to be discussed on WHO's Executive Boarding meeting taking place
next week in Geneva. It can be accessed at

The product development process in the health and pharmaceutical sector is
characterized as complex, lengthy and costly. R&D costs influence decisions
and policy options about how to best incentivize innovation to meet health
needs and how to make end products available at affordable prices. This
research synthesis focuses on the cost aspect of the process (there will be
another one on timeframes and success rates available soon). R&D costs
estimations for the development of new drugs range widely, from $43.4
million to $4.2 billion. The majority of the studies provide figures for
out-of-pocket costs and for capitalized costs (cost of capital/opportunity
costs/time costs), which constitutes from 14-51% of total costs depending
on the capitalization rate, timeframes and methodology adopted. There is a
variety of methods and data sources (many confidential) used in the
studies, which can explain the wide range of cost estimates. The type of
expenses that are included as R&D costs can also vary and are not always
explicitly mentioned in the calculations (such as costs of failures,
expenses related to marketing of the product or tax deductions).

The research syntheses are a resource of the Knowledge Portal on Innovation
and Access, a project of the Global Health Centre, Graduate Institute of
Geneva, and aim to provide concise, comprehensive overviews of the current
state of research on a specific topic. There are currently 19 topics
available under 3 themes: pricing, intellectual property and innovation. A
list of all topics is available at https://www.knowledgeportalia.org/.

As always, we value your comments and feedback through the contribution
form available at the website or by email at
globalhealthresearch at graduateinstitute.ch.

All the best,
Marcela Vieira and Suerie Moon

Marcela Vieira
Researcher and Project Coordinator of the
Knowledge Network for Innovation and Access to Medicines

Global Health Centre, Research
Graduate Institute of International and Development Studies
marcela.vieira at graduateinstitute.ch

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