The subject of last issue’s quiz was the results of a study from The Tufts Center for the Study of Drug Development regarding the new estimates of the costs of developing a new drug. As is rightly stated the estimate was $2.6 billion. This study is an update of the original study by DiMasi and colleagues, whose finding that the costs (in 2000 USD) of drug development were close to $1 billion, has achieved near canonical status. However, considerable doubt has been thrown on these claims, and the criticisms of the original study should be applied to this new research. Light and Warburton’s critique   drew on a number of points: the lack of comparability and reliability about the original survey data as well as the lack of transparency (as the data were not made publicly available); there was a clear interest for pharmaceutical companies to overstate their costs in survey responses; neither the firms nor the drugs considered were random samples; the only drugs considered in the study were “self-originated new chemical entities” (NCEs) whose costs of development are many times higher than acquired or licensed-in NCEs, new formulations, combinations, or administrations of existing drugs, and yet only comprise around 22% of new drug approvals; government subsidies were not deducted; and, there was no adjustment for tax deductions and credits, to name but a few.
Articles in major journals based on industry sponsored research are three to four times more likely to report results favourable to the sponsors than articles with independent funding.  Considerable variation therefore exists in estimates of the costs of drug development. Light and Warburton have estimated the median figure to be roughly a tenth of the original DiMasi estimate. While this may seem (perhaps implausibly) low it certainly suggests we need to take industry sponsored research that affects health policy with a healthy dose of skepticism.
— Sam Watson, University of Warwick
- DiMasi JA, Hansen RW, Grabowski HG. The price of innovation: new estimates of drug development costs. J Health Econ. 2003; 22(2): 151-85.
- Light DW & Warburton RN. Extraordinary claims require extraordinary evidence. J Health Econ. 2005; 24(5): 1030-3.
- Light DW & Warburton RN. Setting the record straight in the reply by DiMasi, Hansen and Grabowski. J Health Econ. 2005; 24(5): 1045-8.
- Bekelman JE, Li Y, Gross CP. Scope and impact of financial conflicts of interest in biomedical research. A systematic review. JAMA. 2003; 289(4): 454-65.
- Lexchin J, Bero LA, Djulbegovic B, Clark O. Pharmaceutical industry sponsorship and research outcome and quality: systematic review. BMJ. 2003; 326: 1167.
- Light DW & Warburton R. Demythologizing the high costs of pharmaceutical research. BioSocieties. 2011; 6: 34-50.