BOSTON, MA -- (MARKET WIRE) -- November 9, 2006 -- The
Tufts
Center for the Study of Drug Development today announced it has
developed the first comprehensive estimate of the average cost of
developing a new biotechnology product, and pegged it at $1.2 billion.
Tufts CSDD said the $1.2 billion estimate reflects the costs of drugs that
fail in testing and the time costs associated with bringing a new
biopharmaceutical to market. Of this amount, capitalized out-of-pocket
preclinical cost totaled $615 million, while similar clinical period cost
totaled $626 million.
A new biotech product took 97.7 months on average to wend its way through
clinical development and regulatory review, about eight percent longer than
for pharmaceuticals, according to the Tufts CSDD analysis.
"While biotech offers significant promise in treating entire categories of
diseases for which no medicines previously existed, it comes at a
significant cost," said Tufts CSDD Director of Economic Analysis
Joseph A. DiMasi.
The Tufts CSDD findings were reported in the November/December
Tufts CSDD
Impact Report. The full study will be published in the journal,
Managerial and Decision Economics.
To develop the estimates, Tufts CSDD relied on compound-specific costs for
a sample of 17 investigational biopharmaceuticals from four firms that
first entered clinical testing from 1990 to 2003. Average development times
and phase transition probabilities were estimated based on data from more
than 500 therapeutic recombinant proteins and mAbs. The full R&D cost
estimate was based on a clinical approval success rate (defined as
obtaining U.S. regulatory approval for marketing) of 30.2% for
biopharmaceuticals.
The Tufts CSDD analysis also found that:
-- Average out-of-pocket cost (cash outlays) per approved
biopharmaceutical for the preclinical period totaled $198 million. When
capitalized, this estimate is $615 million per biopharmaceutical.
-- Average out-of-pocket clinical period cost per approved
biopharmaceutical was $361 million. When capitalized, this estimate is $626
million.
-- Capitalization increases biopharmaceutical costs relative to
traditional pharmaceutical costs because of a longer development timeline
and a higher cost of capital.
-- Biopharmaceuticals had an overall clinical approval success rate of
30.2% vs. 21.5% for traditional pharma firm pipelines.
About the Tufts Center for the Study of Drug Development
The Tufts Center for the Study of Drug Development (
http://csdd.tufts.edu/)
at Tufts University provides strategic information to help drug developers,
regulators, and policy makers improve the quality and efficiency of
pharmaceutical development, review, and
utilization. Tufts CSDD, based in Boston, conducts a wide range of in-depth
analyses on pharmaceutical issues and hosts symposia, workshops, and public
forums on related topics, and publishes the Tufts CSDD Impact Report, a
bi-monthly newsletter providing analysis and insight into critical drug
development issues.
Contact Information: Contacts:
Tufts Center for the Study of Drug Development
Peg Hewitt
617-636-2185
Email Contact
Business Communication Strategies
Peter Lowy
781-326-9980
Email Contact