1. What Does it Really Cost to Develop a New Treatment?
A Brief Review of Drug Development Metrics
Kenneth I Kaitin, Ph.D.
Director, Tufts Center for the Study of Drug Development
Prof. of Medicine, Prof. of Pharmacology & Exp. Therapeutics
ASENT Annual Meeting
Dinner Session
Bethesda, MD, March 4, 2010

3. The Drug Development Pathway
Basic
Research
Prototype Design or Discovery
Preclinical
Development
IND Filing
Clinical Development
Phase I
Phase II
Phase III
NDA/BLA Submission
FDA Review/ Approval & Launch
Phase IV, PMS, Life Cycle Management

4. Clinical and Approval Times Vary Across Therapeutic Classes, 2003-07
8.7
8.8
8.4
7.7
6.9
5.8
* excludes AIDS antivirals
Source: Kaitin, Clin Pharmacol Ther, 2010;87:

6. Overall Clinical Approval Success Rate for NCEs has Dropped to 16%
Source: DiMasi et al, Clin Pharmacol Ther, 2010;87:

7. Capitalized Cost per Approved Biotech Product is Similar to that for Pharma
Source: DiMasi & Grabowski, Managerial Decision Econ, 2007;28:

8. Time Adjusted Capitalized Clinical Costs by Therapeutic Area
Source: DiMasi et al, Drug Info J, 2004;38:

9. Global Pharma Sales in 2008 by Therapeutic Category
10.3% of Global Market
Source: Lehman Brothers, Sept 2008; in Parexel Statistical Sourcebook

10. Drivers of Rising R&D Costs
Chronic and complex indications
Clinical trial size
Protocol design complexity
Patient recruitment/retention
High cost discovery/research tools
Regulatory demands
Market oriented studies
Late-stage attrition

11. New Drug Approvals Are Not Keeping Pace with Rising R&D Spending
R&D Expenditures
New Drug Approvals
* Trend line is 3-year moving average; R&D expenditure adjusted for inflation
Source: Kaitin, Clin Pharmacol Ther, 2010;87:

12. Tufts Center for the Study of Drug Development
Tufts University, Boston, Massachusetts, USA
Kenneth I Kaitin, Ph.D.
Director
Professor of Medicine
Professor of Pharmacology & Exp. Therapeutics
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