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How much do phase III trials cost?

Drug development has been estimated to cost anywhere from US$43 million on one controversial end of the spectrum to $2.9 billion on the other when failures, post-approval studies and opportunity cost are factored in. Taking a different approach to understanding these numbers, researchers have now focused more narrowly on the price tag for pivotal trials alone. The median expense for a single phase III trial is $19 million, they report in JAMA Internal Medicine, after assessing the details of 138 pivotal trials for 59 new drugs that the FDA approved from 2015 to 2016.

Trial costs — estimated on the basis of a cost calculator from the IQVIA contract research organization — vary dramatically, they found. A four-patient phase III trial to test Wellstat's uridine triacetate for the rare hereditary metabolic disorder orotic aciduria likely cost only around $2 million. But Novartis's 8,442-patient non-inferiority trial of sacubitril–valsartan versus enalapril, looking at hospitalization and cardiovascular mortality outcomes, likely cost around $347 million.

“Our study provides a different perspective to the widely held assumption that elaborate and expensive clinical trials are the main reason for the high costs of developing a new drug. These data suggest that high-cost trials occur but usually when drug effects are small or a known drug already provides clinical benefit. On the other hand, pivotal trials for novel drugs with substantial clinical benefits can be conducted at a lower cost,” the authors conclude.

This analysis did not capture some of the trial costs that are borne more directly by sponsors, such as the cost to manufacture drugs or the salaries for sponsor employees who oversee trials. The study wasn't designed to assess the costs of failed trials, of earlier-stage trials or of discovery projects, and was not adjusted to include the opportunity cost of these investments.

Nevertheless, the estimate is in line with previous work from analysts at KMR Group who have assessed the clinical trial costs of more than 700 clinical trials that were run by 7 major pharmaceutical companies between 2010 and 2015. The median phase III trial in their data set cost $21.4 million, they reported last year in Nature Reviews Drug Discovery. The median phase II trial cost $8.6 million, and the median phase I trial cost $3.4 million, they also reported.

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Mullard, A. How much do phase III trials cost?. Nat Rev Drug Discov 17, 777 (2018). https://doi.org/10.1038/nrd.2018.198

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