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The Cost of Innovation / By: Karis Kelly

Lifesaving drugs and research continue to emerge as science advances. Within the past five years, an average of 51 drugs have been approved and produced each year by the Center for Drug Evaluation and Research (CDER) (Mullard, 2022). Each of those drugs went under extensive research and trials to be approved by the CDER. What is the cost of this innovation?

The cost of scientific innovation dramatically varies based on the type of drugs or agents being researched and produced. According to a study by Wouters et al., in 63 out of 355 FDA-approved therapeutic drugs and biological agents from 2009-2018, the estimated median capitalized research and development cost per product was $1.1 billion. However, despite the median being $1.1 billion, the range of prices was from $314 million to $2.8 billion (Wouters et al., 2020). The varying prices are mainly due to the type of drug being researched and developed. For instance, different phases of clinical trials cost different amounts on average, depending on the field of medicine. More intricate or complex areas require more money for research and development. For example, cardiovascular-based research averaged a cost of $64.1 million. On the other hand, respiratory-based research costs $115.3 million on average (Ledesma).

Lauren Wall, the Director of Clinical Research Operations at the University of Chicago, discussed that each phase of research alongside the specialty, site recruitment and monitoring, regulatory and ethics fees, among other factors goes into how much a clinical trial costs. Special contract/clinical research organizations (CRO) are hired for project management to view financial components and the big picture of clinical trials. Additionally, Christine Dannhausen-Brun, Senior Research Specialist at the University of Illinois College of Medicine Rockford, stated “1) Federal and private grant funding, 2) Donations to organizations or universities, and 3) Private industry are some key examples [of funding for medical research]” Research within all fields requires steady funding that can be acquired from multiple sources. Overall, funding and medical research costs are extensive and vary from field to field. Depending on the trial stage, testing needed, staffing, and other factors can deeply influence the cost of innovation. Additionally, funding for trials can vary between these primary sources. 

Works Cited

Ledesma, Patricio. “How Much Does a Clinical Trial Cost?” Sofpromed, 23 Nov. 2022, 

Mullard, Asher. “2021 FDA Approvals.” Nature Reviews Drug Discovery, vol. 21, no. 2, 

Wouters, Olivier J., et al. “Estimated Research and Development Investment Needed to 

Bring a New Medicine to Market, 2009-2018.” JAMA, vol. 323, no. 9, 2020, p. 844.,


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