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The price of failure in drug development

In late 2014, the Centre for the Study of Drug Development (CSDD) at Tufts University in Massachusetts published a report that the development cost for a new drug reaching the market was $2.6 billion. Good grief!

Although there was criticism of the figure, CSDD had access to secret information on costrs from a number of drug companies. Even if the cost of capital ($1.2 billion) is removed, the DIRECT costs are still estimated at $1.4 billion.

Now, some people argue that rolling the cost of failed drugs into the costs of successful ones artificially inflates the cost. But someone has to pay for the costs of failed drugs.

And the attrition rate in clinical development is still very high. And many people ask why that is. Although nonclinical work has continued to develop and the use of biomarkers has improved predictability in some areas, deciding what to do at various decision points is still seen by many as, "Let's give it a go and see what happens".

With drug development costs averaging $0.5 million PER DAY, is that good enough? Can drug development teams be sure that those making the decisions have the appropriate data and information? And posess the required knowledge and expertise?

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