Article

Extraordinary claims require extraordinary evidence

University of Victoria, Victoria, British Columbia, Canada
Journal of Health Economics (Impact Factor: 2.58). 10/2005; 24(5):1030-3; discussion 1034-53. DOI: 10.1016/j.jhealeco.2005.07.001
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Available from: Donald W Light
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    • "Research and development for medicines is a time and cost-consuming and costly process. Although there is no general agreement about how to compute the cost for research and development in the pharmaceutical market and on the actual size of the cost, there is a general agreement that the mean R & D cost is accompanied with introducing a new prescription medicine is in the scope of hundreds of millions of dollars (6, 34). The high cost is assignable in part to the explicit criteria for medicine confirmation set by government agencies (35, 36). "
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    • "The authors then use information on average success rates and successful durations from the CSDD data to calculate the cost of bringing a new drug to market. Recently, Light and Warburton (2005) point out numerous problems with DiMasi et al (2003). In particular, because " cost data used was proprietary and confidential, readers cannot know how each company collected its data, or what was counted as research costs, and no independent verification of the accuracy of the information is possible " (p. "
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    ABSTRACT: This paper replicates DiMasi et al. (J. Health Econ. 2003; 22: 151-185; Drug Inf. J. 2004; 38: 211-223) estimates of expenditure on new drug development using publicly available data. The paper estimates that average expenditure on drugs in human clinical trials is around $27m per year, with $17m per year on drugs in Phase I, $34m on drugs in Phase II and $27m per year on drugs in Phase III of the human clinical trials. The paper's estimated expenditure on new drug development is somewhat greater than suggested by the survey results presented in DiMasi et al. (J. Health Econ. 2003; 22: 151-185; Drug Inf. J. 2004; 38: 211-223). The paper combines a 12-year panel of research and development expenditure for 183 publicly traded firms in the pharmaceutical industry with panel of drugs in human clinical trials for each firm over the same period. The paper estimates drug expenditure by estimating the relationship between research and development expenditure and the number of drugs in development for 1682 company/years (183 firms multiplied by the number of years for which we have financial and drug development information). The paper also estimates expenditure on drugs in various therapeutic categories.
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    • "Third, we are using contemporaneous reports of research and development expenditure where the reports are scrutinized by both the market and the SEC. In their comment on DiMasi et al. (2003), Light and Warburton (2005) argue that "
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    ABSTRACT: This paper replicates DiMasi et al (2003, 2004) estimates of expenditure on new drug development using publicly available data. The paper estimates that average expenditure on drugs in human clinical trials is around $27m per year, with $17m per year on drugs in Phase I, $34m on drugs in Phase II and $27m per year on drugs in Phase III of the human clinical trials. The paper's estimated expenditure on new drug development is somewhat greater than suggested by the survey results presented in DiMasi et al (2003, 2004). The paper combines a twelve year panel of research and development expenditure for 183 publicly traded firms in the pharmaceutical industry with panel of drugs in human clinical trials for each firm over the same period. The paper estimates drug expenditure by estimating the relationship between research and development expenditure and the number of drugs in development for 1,682 company/years (183 firms multiplied by the number of years for which we have financial and drug development information). The paper also estimates expenditure on drugs in various therapeutic categories. The paper confirms earlier work by the authors that $802m may under estimate the average amount needed to bring a new molecular entity to market. It also confirms that there is significant variation in spending by therapeutic category.
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