The cost of new drug discovery and development

Abstract

Extract: The development of a new drug requires a major investment of capital, human resources, and technological expertise. It also requires strict adherence to regulations on testing and manufacturing standards before a new drug can be used in the general population. All these requirements contribute to the cost increases for a new chemical entities (NCE, i.e., new drug candidate) research and development (R&D). The central question raised by this trend is who will pay for new pharmaceutical R&D? With this question in mind, this article has three objectives: 1) to describe how the environment for pharmaceutical R&D has changed over time and the effect of these changes on the R&D process, 2) to summarize available information on the cost of drug discovery and development for NCEs, and 3) to consider the societal value of new drugs. The focus is on the United States, as the largest pharmaceutical market, and for which the relevant literature is most comprehensive, but many of the issues discussed are similarly important in the other major markets.