The $2,558 million figure per approved compound is based on estimated:
- Average out-of-pocket cost of $1,395 million
- Time costs (expected returns that investors forego while a drug is in development) of $1,163 million
Estimated average cost of post-approval R&D—studies to test new indications, new formulations, new dosage strengths and regimens, and to monitor safety and long-term side effects in patients required by the U.S. Food and Drug Administration as a condition of approval—of $312 million boosts the full product lifecycle cost per approved drug to $2,870 million. All figures are expressed in 2013 dollars.
Source: PR Tufts CSDD 2014 Cost Study | Tufts Center for the Study of Drug Development
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