Median Cost of Cancer Drug Development is Approximately $648 Million

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Cancer drug development cost was found to be significantly lower than prior estimates.
Cancer drug development cost was found to be significantly lower than prior estimates.

(HealthDay News) -- The median cost of cancer drug development is $648.0 million, and revenue after approval is substantial, according to a study published online Sept. 11 in JAMA Internal Medicine.

Vinay Prasad, M.D., M.P.H., from the Oregon Health and Science University in Portland, and Sham Mailankody, M.B.B.S., from the Memorial Sloan Kettering Cancer Center in New York City, estimated cumulative research and development (R&D) spending from initiation of drug development activity to date of approval for cancer drugs. The analysis included 10 companies and drugs.

The researchers found that the median time to develop a drug was 7.3 years for the 10 companies. Five of the drugs received accelerated approval from the U.S. Food and Drug Administration, and five received regular approval. Drug development cost a median of $648.0 million. The median cost was $757.4 million and $793.6 million for a 7 percent per annum cost of capital and for a 9 percent opportunity costs, respectively. The total revenue from sales of these 10 drugs was $67.0 billion with a median of 4.0 years since approval, compared with $7.2 billion in total R&D spending.

"The cost to develop a cancer drug is $648.0 million, a figure significantly lower than prior estimates," the authors write. "This analysis provides a transparent estimate of R&D spending on cancer drugs and has implications for the current debate on drug pricing."

One author disclosed financial ties to the biopharmaceutical industry; the second received fees for speaking at conferences in the health care industry.

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