The price of innovation: new estimates of drug development costs.

  title={The price of innovation: new estimates of drug development costs.},
  author={Joseph A Dimasi and Ronald W. Hansen and Henry G. Grabowski},
  journal={Journal of health economics},
  volume={22 2},
The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a… CONTINUE READING
Highly Influential
This paper has highly influenced 52 other papers. REVIEW HIGHLY INFLUENTIAL CITATIONS
Highly Cited
This paper has 2,112 citations. REVIEW CITATIONS
Related Discussions
This paper has been referenced on Twitter 6 times. VIEW TWEETS

From This Paper

Figures, tables, and topics from this paper.


Publications citing this paper.
Showing 1-10 of 823 extracted citations

2,112 Citations

Citations per Year
Semantic Scholar estimates that this publication has 2,112 citations based on the available data.

See our FAQ for additional information.


Publications referenced by this paper.
Showing 1-10 of 23 references

New drug innovation and pharmaceutical industry structure: trends in the output of pharmaceutical firms

J. A. DiMasi
Drug Information Journal • 2000
View 6 Excerpts
Highly Influenced

Federal taxation of the drug industry

G. Guenther
Memorandum to Joint Economic Committee, US Congress, Congressional Research Service, • 1999
View 5 Excerpts
Highly Influenced

A life-cycle financial model of pharmaceutical R&D

S. C. Myers, C. D. Howe
Working Paper, Program on the Pharmaceutical Industry. Massachusetts Institute of Technology, • 1997
View 10 Excerpts
Highly Influenced

Measuring pharmaceutical industry risk and the cost-of-capital

S. C. Myers, L. Shyam-Sunder
American Enterprise Institute, • 1996
View 12 Excerpts
Highly Influenced

Risks in new drug development: approval success rates for investigational drugs.

Clinical pharmacology and therapeutics • 2001
View 4 Excerpts
Highly Influenced

Despite Billions for Discoveries, Pipeline of Drugs is Far from Full

A. Pollack
New York Times, • 2002
View 1 Excerpt

A Revolution in R&D: The Impact of Genomics

P. 216–220. Tollman, P. Guy, J. Altshuler, A. Flanagan, M. Steiner

New drug development in the United States from 1963 to 1999.

Clinical pharmacology and therapeutics • 2001
View 2 Excerpts