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Clinical Trials, Health Costs

Crowdsourcing cost of drug development

When I was editing stories for the Stanford Medicine special report on clinical trials a few years back, a recurring theme was the enormous cost of bringing new drugs to market. A 2003 study led by Joseph DiMasi at Tufts Center for the Study of Drug Development arrived at $802 million – and this was the figure always cited to me by the researchers and administrators I interviewed.

Today David Ng blogged about a recent critique of the article on Boing Boing and the discussion has heated up. Reading the comments, I learned that Donald Light and Rebecca Warburton, the authors of the critique in Biosocieties, have published previously on this topic and DiMasi has rebutted their arguments. And now Tufts has issued a press release in response.

So what is the cost of drug development? Is it more than $800 million? Or closer to $40 million, as Light and Warburton propose? If like me, you lack the enthusiasm to analyze both papers to reach a conclusion, you’ll be happy to hear about bioscience venture capital blogger Bruce Booth’s crowdsourcing solution:

We can all debate what the right statistics are for the R&D costs to support a drug: direct costs per phase, time per phase, failure rates, etc It all depends on the drug itself, its safety profile, how many fumbles it has in development, what indications (diseases) it goes after, what the organizational overhead costs are, how bureaucratic your processes are, etc Venture-backed biotechs have a very different cost structure than a Big Pharma. Some firms build Fords and others build Cadillacs. So the median and mean are essentially meaningless; the ranges and distributions are more interesting.

With all the good online discussion, I thought I’d have some fun and throw a model into the mix to see if crowdsourcing can generate a better answer. The link is below the image.

If you’ve actually developed a drug, why not download the one or both of Booth’s models (he’s got two posted now), punch in your numbers and add your result to the mix?

Via Boing Boing, Life Sci VC and In the Pipeline

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