The Cost Of Creating A New Drug Now $5 Billion, Pushing Big Pharma To Change
How Much Does Pharmaceutical Innovation Cost? A Look At 100 Companies
![Money Money](http://b-i.forbesimg.com/matthewherper/files/2013/08/6355836713_7ea15f733f_m1.jpg)
Money (Photo credit: 401(K) 2013)
No factor defines success and failure for a drug company more than this: Companies that invent more, better drugs at a lower cost do better than those that hemorrhage cash but never get an important product to market. Yet 19 in 20 medicines in experimental development fail, meaning a great many companies fail too.
For years, researchers, including one team from Tufts University and another at Eli Lilly, have estimated the cost of inventing and developing a drug at $1 billion or more. These estimates try to exclude costs not directly related to a drug’s approval and also don’t allow for any comparisons between companies. Last year, for the first time, I did something far cruder: I took the 15-year research spending of a group of big pharmaceutical companies and divided it by the number of new drugs (technically new molecular entities, the Food and Drug Administration’s term for drug molecules that have not been approved in any form for any use previously).
My conclusions based on this data are here: How The Staggering Cost Of Inventing New Drugs Is Shaping The Future Of Medicine.
How Much They Cost: R&D Spending Per New Drug
Company | Number of new drugs | 10 year R&D spending ($MIL) | R&D per drug ($MIL) | |
1 | Abbott | 1 | 13183 | 13183 |
2 | Sanofi | 6 | 60768 | 10128 |
3 | AstraZeneca | 4 | 38245 | 9561 |
4 | Hoffmann-La Roche | 8 | 70928 | 8866 |
5 | Pfizer | 10 | 77786 | 7779 |
6 | Wyeth | 3 | 22702 | 7567 |
7 | Eli Lilly | 4 | 26710 | 6678 |
8 | Bayer | 5 | 33118 | 6624 |
9 | Schering-Plough | 3 | 18845 | 6282 |
10 | Novartis | 10 | 60727 | 6073 |
11 | Takeda | 4 | 24132 | 6033 |
12 | Merck&Co | 9 | 49133 | 5459 |
13 | GlaxoSmithKline | 11 | 57595 | 5236 |
14 | J&J | 13 | 67624 | 5202 |
15 | Novo Nordisk | 2 | 9251 | 4625 |
16 | UCB | 1 | 4325 | 4325 |
17 | Yamanouchi | 1 | 4321 | 4321 |
18 | Fujisawa | 1 | 4286 | 4286 |
19 | Amgen | 5 | 21350 | 4270 |
20 | Astellas | 3 | 12582 | 4194 |
21 | Shionogi | 1 | 3854 | 3854 |
22 | Celgene | 2 | 7193 | 3596 |
23 | Bristol-Myers Squibb | 9 | 30352 | 3372 |
24 | Eisai | 4 | 11534 | 2883 |
25 | Teva | 2 | 5763 | 2881 |
26 | Biogen Idec | 4 | 9470 | 2368 |
27 | Vertex | 2 | 4140 | 2070 |
28 | Sunovion | 1 | 1967 | 1967 |
29 | Human Genome Sciences | 1 | 1954 | 1954 |
30 | Elan | 1 | 1903 | 1903 |
31 | Gilead | 3 | 5527 | 1842 |
32 | Exelixis | 1 | 1789 | 1789 |
33 | Lundbeck | 2 | 3527 | 1763 |
34 | Millennium | 1 | 1593 | 1593 |
35 | Genentech | 4 | 6277 | 1569 |
36 | Allergan | 1 | 1559 | 1559 |
37 | Baxter | 3 | 4627 | 1542 |
38 | Ipsen | 1 | 1459 | 1459 |
39 | Forest | 4 | 5184 | 1296 |
40 | Cephalon | 1 | 1221 | 1221 |
41 | Onyx | 1 | 1219 | 1219 |
42 | Sepracor | 1 | 1170 | 1170 |
43 | Alcon | 1 | 1133 | 1133 |
44 | Theravance | 1 | 1010 | 1010 |
45 | Genzyme | 5 | 4814 | 963 |
46 | Shire | 4 | 3827 | 957 |
47 | Arena | 1 | 934 | 934 |
48 | Watson | 1 | 930 | 930 |
49 | Adolor | 1 | 877 | 877 |
50 | Valeant | 1 | 844 | 844 |
51 | Schwarz | 2 | 1545 | 772 |
52 | NPS | 1 | 756 | 756 |
53 | Regeneron | 3 | 2149 | 716 |
54 | Affymax | 1 | 660 | 660 |
55 | Seattle Genetics | 1 | 610 | 610 |
56 | CV Therapeutics | 1 | 599 | 599 |
57 | ImClone | 1 | 517 | 517 |
58 | Dendreon | 1 | 509 | 509 |
59 | Alexion | 1 | 490 | 490 |
60 | The Medicines Company | 1 | 455 | 455 |
61 | Ariad | 1 | 444 | 444 |
62 | OSI | 1 | 402 | 402 |
63 | Talecris | 1 | 396 | 396 |
64 | Progenics | 1 | 356 | 356 |
65 | Actelion | 1 | 346 | 346 |
66 | Savient | 1 | 339 | 339 |
67 | Praecis | 1 | 311 | 311 |
68 | Vivus | 1 | 309 | 309 |
69 | MGI | 1 | 294 | 294 |
70 | Vicuron | 1 | 286 | 286 |
71 | Salix | 2 | 560 | 280 |
72 | Idenix | 1 | 280 | 280 |
73 | Mylan | 3 | 762 | 254 |
74 | Discovery Laboratories | 1 | 228 | 228 |
75 | Indevus | 1 | 222 | 222 |
76 | Cubist | 1 | 220 | 220 |
77 | Acorda | 1 | 185 | 185 |
78 | Ista | 1 | 171 | 171 |
79 | Optimer | 1 | 171 | 171 |
80 | Theratechnologies | 1 | 164 | 164 |
81 | MediGene | 1 | 155 | 155 |
82 | Vanda | 1 | 150 | 150 |
83 | Eyetech | 1 | 144 | 144 |
84 | ThromboGenics | 1 | 137 | 137 |
85 | BioMarin | 3 | 403 | 134 |
86 | Protalix | 1 | 125 | 125 |
87 | Amarin | 1 | 122 | 122 |
88 | Insmed | 1 | 118 | 118 |
89 | NeurogesX | 1 | 89 | 89 |
90 | Hyperion | 1 | 87 | 87 |
91 | Cypress Bioscience | 1 | 82 | 82 |
92 | New River | 1 | 79 | 79 |
93 | Aegerion | 1 | 74 | 74 |
94 | Sucampo | 1 | 62 | 62 |
95 | Fibrocell | 1 | 62 | 62 |
96 | Tercica | 1 | 49 | 49 |
97 | Pharmion | 1 | 47 | 47 |
98 | Kamada | 1 | 37 | 37 |
99 | Lev | 1 | 26 | 26 |
100 | OMRIX | 1 | 15 | 15 |