Average cost for developing new biopharmaceutical is US $ 1.2 billion, as Biotech firms spent US $ 1.2 billion claims a study by Center for the Study of Drug Development.
Biotech firms spent US $ 1.2 billion & 8 years, on an average, to introduce a new biotechnology based treatment in the market, costing around 24 % higher and taking over 7 months more compared to the cost & time involved in developing medicine by traditional drug makers, claims a study by Tufts CSDD (Center for the Study of Drug Development).
The US $ 1.2 billion figure include the costs due to failures in testing of drugs & time costs related with introducing a new treatment in the market. According to the study, capitalized 'out of pocket' pre-clinical costs were around US $ 615 million whereas similar clinical costs were around US $ 626 million.
Mr. Joseph A. DiMasi of Tufts CSDD said that the costs are quite high. Though biotechnology shows significant potential in curing diseases for which there were no medicines in the past, coming at significant costs, he said.
Biotech firms spent US $ 198 million, on an average, during the pre-clinical period of development, a phase when a compound is put to laboratory tests & animal tests. About US $ 361 million is spent during clinical period when the compound is tested on human beings. Cost in raising capital totaled to around US $ 682 million, over 50 % more than total developing costs.
Capitalization has increased biotech costs compared to tradition pharma costs due to longer research times & higher capital costs. Biopharmaceuticals fared better in overall success rate in terms of clinical approval i.e., 30.2 % versus 21.5 % for traditional pharmaceuticals.
"Contract Research Organizations (CROs) are charging fees that is way too high that is increasing drug research costs and is indirectly affecting prescription drug costs in USA.
CSDD examined costs of seventeen investigational biopharmaceuticals developed by 4 firms, which tested these compounds in humans in 1990-2003. Costs involved in researching around 500 compounds were included, majority of which never got approval.
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