If we adopt the definition of the cost of new drugs

Defined by new molecular entities (NMEs), approved per year, then it appears that the industry is in deep decline and in a major crisis.

The Rising Cost of New Drugs and Why

Industry estimates peg the cost of bringing a chemical entity to market at about $900 million, including post-launch studies.

Based on recent performance data, however, the true cost is nearly twice as high—closer to $1.7 billion per successful launch, when you also include average launch costs of $250 million.

The former estimate derives from data from the period 1983 to 2000. Analysis of more recent data from 1997 to 2001, taking into account both direct and indirect costs, indicate that performance has declined substantially.

This makes the probability of investment and the cost of new drugs to market of a new drug, even more, when the ROI is close to 5%.

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