7 ms·

The tufts study is the definitive source I usually hear as well. But most of the $2.6B is cost of failed candidates. The actual cash costs of developing a succe

The tufts study is the definitive source I usually hear as well. But most of the $2.6B is cost of failed candidates. The actual cash costs of developing a successful drug are probably more like $100-200M minimum from start of lead optimization to FDA approval, based on the tufts data and also anecdotally if you track venture funding raised from companies that get drugs approved In some indications however one phase 3 study can be $300M+

Alex3917 9y ago
The upper bound isn't really relevant though, because of course any company can spend infinitely much on anything, and will if they're trying to maximize the amount of time they can sell the drug while it's under patent. The only thing that matters is how much the least expensive drug approvals cost.
- aaavl2821 9y ago
  I'm probably taking you too literally but companies can't spend infinite amounts because they don't have infinite money The upper bound is actually very relevant. Those $300M studies are cardiovascular outcomes studies, which are required for many diabetes / cardiovascular drugs, and those expensive studies have basically stifled innovation in those areas because the cost of developing those drugs is too high compared to the expected profits Not sure I understand the statement that the only thing that matters is how much the least expensive drug approvals cost?
DangerousPie 9y ago
Why shouldn't we consider the cost of failed candidates? That's like saying lottery tickets are a great investment, if we only look at the winning ticket.
- aaavl2821 9y ago
  I completely agree you have to include cost of failed candidates and did not mean to suggest I did not I mentioned the cash costs for developing an approved drug as an additional data point to that illustrate GPs $35M is too low even excluding cost of failure
c3534l 9y ago
The actual cost of developing a successful drug includes failed candidates. If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research.
- Alex3917 9y ago
  > If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research. I mean that's not really accurate, even if you know a drug will be effective you're still legally required to do the research. There are plenty of drugs we know will be effective in advance, but they still need to be tested. Similarly, there are lots of drugs that we know will have maybe only a 5% likely chance of being effective, but it's worth spending money to test them anyway because of the potential profits. So including the costs of failed drug trials doesn't really make any sense.
  - c3534l 9y ago
    If you knew it was effective what's the point of the research? The research is what's used to demonstrate efficacy. The FDA requires research because it cannot be known if a drug is safe and effective without research. They don't require you submit all the research that found a drug didn't work. They only require it of the one that did. It doesn't change the fact that you have any number of chemicals that could do any number of things, and you do research to demonstrate which ones have the desirable properties. Not that no one has to constructively invent a process to manufacture a drug, but what a drug patent typically grants is exclusive manufacture for proof of medical utility.
    - Alex3917 9y ago
      > The FDA requires research because it cannot be known if a drug is safe and effective without research. Why not? AstroZeneca knew the safety and efficacy of Nexium without doing any research, but they were still required by law to run a couple studies.
      - 9y ago

Alex3917 9y ago

The upper bound isn't really relevant though, because of course any company can spend infinitely much on anything, and will if they're trying to maximize the amount of time they can sell the drug while it's under patent. The only thing that matters is how much the least expensive drug approvals cost.

aaavl2821 9y ago
I'm probably taking you too literally but companies can't spend infinite amounts because they don't have infinite money The upper bound is actually very relevant. Those $300M studies are cardiovascular outcomes studies, which are required for many diabetes / cardiovascular drugs, and those expensive studies have basically stifled innovation in those areas because the cost of developing those drugs is too high compared to the expected profits Not sure I understand the statement that the only thing that matters is how much the least expensive drug approvals cost?

DangerousPie 9y ago

Why shouldn't we consider the cost of failed candidates? That's like saying lottery tickets are a great investment, if we only look at the winning ticket.

aaavl2821 9y ago
I completely agree you have to include cost of failed candidates and did not mean to suggest I did not I mentioned the cash costs for developing an approved drug as an additional data point to that illustrate GPs $35M is too low even excluding cost of failure

c3534l 9y ago

The actual cost of developing a successful drug includes failed candidates. If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research.

Alex3917 9y ago
> If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research. I mean that's not really accurate, even if you know a drug will be effective you're still legally required to do the research. There are plenty of drugs we know will be effective in advance, but they still need to be tested. Similarly, there are lots of drugs that we know will have maybe only a 5% likely chance of being effective, but it's worth spending money to test them anyway because of the potential profits. So including the costs of failed drug trials doesn't really make any sense.
- c3534l 9y ago
  If you knew it was effective what's the point of the research? The research is what's used to demonstrate efficacy. The FDA requires research because it cannot be known if a drug is safe and effective without research. They don't require you submit all the research that found a drug didn't work. They only require it of the one that did. It doesn't change the fact that you have any number of chemicals that could do any number of things, and you do research to demonstrate which ones have the desirable properties. Not that no one has to constructively invent a process to manufacture a drug, but what a drug patent typically grants is exclusive manufacture for proof of medical utility.
  - Alex3917 9y ago
    > The FDA requires research because it cannot be known if a drug is safe and effective without research. Why not? AstroZeneca knew the safety and efficacy of Nexium without doing any research, but they were still required by law to run a couple studies.
    - 9y ago