Browsing by Author "Hansen, Ronald W"
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Item Open Access Extraordinary Claims Require Extraordinary Evidence(Journal of Health Economics, 2005) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GItem Open Access Innovation in the pharmaceutical industry: New estimates of R&D costs.(J Health Econ, 2016-05) DiMasi, Joseph A; Grabowski, Henry G; Hansen, Ronald WThe research and development costs of 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug and biologics development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per approved new compound is $1395 million (2013 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 10.5% yields a total pre-approval cost estimate of $2558 million (2013 dollars). When compared to the results of the previous study in this series, total capitalized costs were shown to have increased at an annual rate of 8.5% above general price inflation. Adding an estimate of post-approval R&D costs increases the cost estimate to $2870 million (2013 dollars).Item Open Access Setting the Record Straight on Setting the Record Straight: Response to Light and Warburton's Rejoiner(Journal of Health Economics, 2005) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GItem Open Access The cost of drug development.(N Engl J Med, 2015-05-14) DiMasi, Joseph A; Grabowski, Henry G; Hansen, Ronald WItem Open Access The price of innovation: new estimates of drug development costs.(J Health Econ, 2003-03) DiMasi, Joseph A; Hansen, Ronald W; Grabowski, Henry GThe research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.