Table 1. Drug Development Cost Model Parameters and Assumptions by Therapeutic Area and Phasea.
| Parameter and phase | Anti-infective | Cardio-vascular | Central nervous system | Derma-tology | Endocrine | Gastro-intestinal | Genito-urinary system | Hema-tology | Oncology | Respira-tory system | Ophthal-mology | Pain and anesthesia | Immuno-modulation | All |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Phase durations, mo | ||||||||||||||
| Nonclinical | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 |
| Phase 1 | 21.5 | 14.1 | 19.5 | 27.8 | 12.9 | 27.8 | 12.4 | 23.8 | 31.9 | 17.6 | 17.9 | 27.8 | 13.1 | 27.8 |
| Phase 2 | 28.0 | 38.0 | 40.1 | 34.0 | 29.3 | 34.0 | 25.8 | 35.0 | 40.3 | 37.1 | 27.0 | 34.0 | 33.1 | 34.0 |
| Phase 3 | 32.8 | 42.0 | 45.3 | 38.0 | 35.6 | 38.0 | 33.0 | 58.3 | 57.7 | 42.2 | 33.7 | 38.0 | 36.3 | 38.0 |
| FDA review | 14.8 | 19.1 | 21.0 | 12.2 | 18.8 | 17.9 | 18.3 | 15.3 | 9.6 | 18.9 | 11.9 | 31.7 | 16.8 | 16.2 |
| Phase 4 | 38.7 | 38.5 | 35.0 | 36.6 | 34.0 | 36.6 | 29.9 | 36.6 | 45.7 | 36.6 | 30.7 | 36.6 | 39.6 | 36.6 |
| Start to start, mo | ||||||||||||||
| Nonclinical to phase 1 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 |
| Phase 1 to phase 2 | 12.9 | 8.5 | 11.7 | 16.6 | 7.7 | 16.6 | 7.4 | 14.2 | 19.1 | 10.5 | 10.7 | 16.6 | 7.9 | 16.6 |
| Phase 2 to phase 3 | 22.4 | 30.4 | 32.1 | 27.2 | 23.4 | 27.2 | 20.6 | 28.0 | 32.2 | 29.7 | 21.6 | 27.2 | 26.5 | 27.2 |
| Phase 3 to FDA review | 22.3 | 28.6 | 30.8 | 25.9 | 24.2 | 25.9 | 22.4 | 39.7 | 39.3 | 28.7 | 22.9 | 25.9 | 24.7 | 25.9 |
| FDA review to approval | 14.8 | 19.1 | 21.0 | 12.2 | 18.8 | 17.9 | 18.3 | 15.3 | 9.6 | 18.9 | 11.9 | 31.7 | 16.8 | 16.2 |
| Per-patient cost (2018), $ | ||||||||||||||
| Nonclinical | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 1 | 19 399 | 59 456 | 87 390 | 35 450 | 85 463 | 61 848 | 53 770 | 349 363 | 103 344 | 44 330 | 50 999 | 90 370 | 63 471 | 81 338 |
| Phase 2 | 59 289 | 41 323 | 48 767 | 66 661 | 51 556 | 63 590 | 45 781 | 100 554 | 78 753 | 43 563 | 48 438 | 77 726 | 47 897 | 58 618 |
| Phase 3 | 30 001 | 33 084 | 39 612 | 48 587 | 48 753 | 47 656 | 38 930 | 118 473 | 93 145 | 46 764 | 79 933 | 60 751 | 54 909 | 53 180 |
| FDA review | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 4 | 13 814 | 33 915 | 34 956 | 33 102 | 56 824 | 52 746 | 16 699 | 41 958 | 23 515 | 18 987 | 24 022 | 41 573 | 30 246 | 35 190 |
| No. of patients enrolled per trial | ||||||||||||||
| Nonclinical | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 1 | 69 | 42 | 44 | 106 | 38 | 38 | 50 | 31 | 58 | 49 | 121 | 36 | 55 | 51 |
| Phase 2 | 243 | 189 | 243 | 133 | 225 | 292 | 323 | 134 | 137 | 203 | 299 | 270 | 323 | 235 |
| Phase 3 | 575 | 1151 | 529 | 568 | 414 | 496 | 546 | 233 | 293 | 516 | 876 | 1209 | 309 | 630 |
| FDA review | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 4 | 1430 | 508 | 356 | 850 | 482 | 1344 | 410 | 411 | 261 | 1159 | 413 | 280 | 383 | 708 |
| Mean No. of trials | ||||||||||||||
| Nonclinical | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 1 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 1 | 1 | 1 | 2 | 2 | 2 |
| Phase 2 | 2 | 1 | 1 | 2 | 2 | 1 | 1 | 2 | 1 | 2 | 2 | 2 | 2 | 2 |
| Phase 3 | 2 | 2 | 3 | 3 | 4 | 2 | 1 | 2 | 2 | 4 | 2 | 3 | 3 | 3 |
| FDA review | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| Phase 4 | 2 | 2 | 2 | 1 | 2 | 2 | 1 | 2 | 1 | 2 | 2 | 1 | 2 | 2 |
| Transition success probabilities, % | ||||||||||||||
| Nonclinical to phase 1 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 | 68.0 |
| Phase 1 to phase 2 | 65.9 | 65.0 | 61.5 | 60.2 | 68.0 | 71.6 | 62.9 | 73.3 | 61.5 | 68.5 | 86.0 | 60.2 | 69.9 | 60.2 |
| Phase 2 to phase 3 | 49.6 | 37.1 | 33.1 | 35.9 | 46.3 | 35.3 | 44.9 | 56.6 | 26.8 | 27.4 | 52.7 | 35.9 | 40.1 | 35.9 |
| Phase 3 to FDA review | 74.1 | 57.6 | 55.9 | 65.5 | 63.9 | 55.3 | 71.4 | 75.0 | 42.7 | 75.6 | 58.3 | 65.5 | 65.4 | 65.5 |
| FDA review to approval | 94.4 | 75.5 | 87.0 | 88.3 | 81.3 | 86.2 | 85.7 | 84.0 | 85.5 | 89.5 | 77.5 | 88.3 | 95.3 | 88.3 |
| Out-of-pocket estimates (millions), $ | ||||||||||||||
| Nonclinical | 9.4 | 10.1 | 8.7 | 9.3 | 14.2 | 11.4 | 7.7 | 17.9 | 7.0 | 9.0 | 32.0 | 22.2 | 11.6 | 11.8 |
| Phase 1 | 2.8 | 4.2 | 6.8 | 6.5 | 6.8 | 4.3 | 4.2 | 17.3 | 8.1 | 3.2 | 7.6 | 6.1 | 6.8 | 7.1 |
| Phase 2 | 22.3 | 11.2 | 16.1 | 14.9 | 19.4 | 26.2 | 19.8 | 22.1 | 14.5 | 13.7 | 22.8 | 34.6 | 24.3 | 21.0 |
| Phase 3 | 41.6 | 91.2 | 59.4 | 70.6 | 85.8 | 58.1 | 31.3 | 61.9 | 37.7 | 90.5 | 173.0 | 214.4 | 52.4 | 89.3 |
| FDA review | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 | 2.6 |
Abbreviations: FDA, Food and Drug Administration; NA, not applicable.
a
The total percentage cost of capital is 11%.