Although developing a new drug is generally considered to be a pricey proposition, the median cost of the pivotal trials needed to win regulatory approval is just $19 million, according to a new study.
In other words, the key scientific evidence used to persuade the Food and Drug Administration to endorse a new medicine is a small fraction of the overall development costs regularly attributed to the efforts undertaken to bring a new medicine to market.
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This article is somewhat misleading, as the cost of developing drugs that fail greatly exceeds the cost of developing drugs that make it to market. A back-of-the-envelope estimation multiplies the entire cost of development of a successful drug by at least a factor of 3 to estimate what a company actually expends to take a drug to the marketplace.
I don’t doubt this is true. But this is just Phase 3 — and it takes lots of money and too often lots of failures to get to Phase 3.
Oftentimes Phase 2 trials can be equally large, in part because they explore multiple doses. And we know lots of Phase 2 trials fail.