US drug development costs are high, but the available estimates do not establish a simple, apples-to-apples surge in the cost of developing each drug over time. A 2024 study found that pharmaceutical research and development (R&D) spending grew as a share of sales between 2008 and 2019; separate studies estimate per-drug costs using different cohorts and accounting rules. Those figures answer different questions.
What does “drug development cost” include?
A direct-cost estimate counts spending on development programs included in a study. A broader estimate may also account for candidates that fail and the cost of capital tied up while a program is underway. Those additions can substantially change the result. Before comparing headline figures, check what costs are included, which drugs were studied, the dollar year, and whether the number is a mean or median.
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What have studies estimated per drug?
Two studies of different cohorts illustrate how much the result depends on methodology. Their estimates are not a time series and should not be read as evidence that costs rose from one figure to another.
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| Study and cohort | Reported estimate | What it includes |
|---|---|---|
| Sertkaya et al., JAMA Network Open, 2024; US-market development costs | $172.7 million mean (2018 dollars) | Before accounting for failed candidates and cost of capital |
| Sertkaya et al., JAMA Network Open, 2024; same analysis | $515.8 million mean (2018 dollars) | After accounting for failed development programs |
| Sertkaya et al., JAMA Network Open, 2024; same analysis | $879.3 million mean (2018 dollars) | After accounting for failures and capital costs |
| JAMA Network Open, 2025; 38 drugs approved by FDA in 2019 | $150 million median; $369 million mean | Unadjusted direct costs |
| JAMA Network Open, 2025; same cohort | $708 million median; $1.31 billion mean | Adjusted for inflation, cost of capital, and discontinued products |
The figures from the 2024 study are means, not typical per-drug results. In the 2025 cohort, the adjusted mean was much higher than the median, showing how a small number of expensive programs can pull the average upward. Excluding two drugs reduced the adjusted mean from $1.31 billion to $950 million, while the median fell by less than 10%. The authors wrote that “parallel development across indications, adjustment for discontinued products, and a small number of expensive development programs are particularly important drivers of R&D costs.”
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These studies differ in scope, cohort, and accounting methods. Their estimates should not be treated as directly comparable: one cannot infer a rise or fall by placing their dollar amounts side by side.
Did US drug development costs surge over time?
The 2024 analysis found that pharmaceutical R&D spending rose from 11.9% of total sales in 2008 to 17.7% in 2019. That is evidence of increased R&D intensity—the share of sales spent on R&D—not proof that the cost of developing each drug rose by the same amount. The 2025 study describes costs for a cohort approved in 2019; it does not compare that cohort with an earlier one to establish a historical per-drug trend.
The most defensible conclusion is therefore specific: industry R&D intensity increased over the 2008–2019 period studied, while published estimates of cost per drug vary substantially according to what researchers count. The available figures do not establish a clean, consistently measured per-drug cost surge over time.
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No. FDA lists a FY 2027 application fee of $4,600,753 for a covered human drug application requiring clinical data. This is a regulatory user fee for certain applications, not an estimate of laboratory work, clinical trials, failed candidates, financing, or total company R&D spending. FDA explains the fee program under the Prescription Drug User Fee Amendments.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to evaluate a drug-cost headline
- Cost definition: Does the figure cover direct development costs, failures, capital costs, or some combination?
- Dollar year: Is the amount inflation-adjusted, and to which year’s dollars?
- Cohort and geography: Which drugs were included, when were they approved, and what market does the estimate describe?
- Statistic: Is it a mean or median? In a skewed cohort, the mean can be pulled upward by a few unusually expensive programs.
- Trend basis: Does the study compare consistently defined per-drug costs over time, or does it measure a different trend, such as R&D spending relative to sales?
For more detail, see the 2024 JAMA Network Open analysis of drug-development costs and R&D intensity and the 2025 JAMA Network Open study estimating costs from clinical-trial characteristics.
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