A new round in the national debate over the cost of prescription drugs opened Friday with a study from researchers at Tufts University estimating that it costs an average of US$802 million to develop a drug.
By contrast, the Tufts researchers said, it cost an average of US$231 million to develop a new drug in 1987. The increase in the cost of development was 247 percent. If the cost had risen only at the pace of inflation, they said, it would have reached US$318 million, a 38 percent increase.
Dr. Kenneth Kaitin, director of the Tufts Center for the Study of Drug Development, which published the report, said: "Bringing new drugs to market has always been an expensive, high-risk proposition, and our latest analysis indicates that costs have continued to skyrocket."
Joseph DiMasi, an economist and the principal author of the study, attributed much of the increase in the cost of drug development, beyond inflation, to the rising costs of testing new drugs in humans. Drug companies recruit thousands of people around the world to participate in such clinical trials before drugs are marketed in the US.
The Tufts researchers said the cost of developing new drugs was typically spread over 10 years to 15 years. On average, DiMasi said, 12 years elapse from the time a new chemical compound is synthesized until it is approved by the government for marketing in the US.The Pharmaceutical Research and Manufacturers of America, a trade association for drug makers, praised the study, saying it confirmed their view that "drug development is staggeringly expensive." Alan Holmer, president of the organization, said the study underscored the need for policies, like patent protection, that encourage investment in drug research and development.
Some consumer advocates criticized the study as biased and said it overstated the costs of drug development.
"This is just a thinly disguised advertisement for the pharmaceutical industry to justify continued price-gouging," said Dr. Sidney Wolfe, director of the Health Research Group.
Clay O'Dell, a spokesman for the Generic Pharmaceutical Association, whose members use the fruits of research done by makers of brand-name drugs, said: "The methodology of this study is suspect. It ignores the fact that some of the drug development costs are tax-deductible, and that some of the research is subsidized by the government through the National Institutes of Health."
Data for the study were obtained from 10 drug companies, and the Tufts center receives financial support from drug companies, among others.
But in publishing the study, the Tufts center said it was "widely respected as an independent source of information on drug development." DiMasi said there were "no strings attached" to the money it received from drug companies.
Previous studies by the Tufts center have become a political football in congressional debates over drug costs, patent law and proposals to add drug benefits to Medicare, the government health insurance program for the elderly and disabled.
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