Posts Tagged: "Investigational New Drug Application"

The High Cost of Making Pharmaceuticals

It is nearly universally accepted (and for a reason) that the process from discovery to market is long and costly. Drugs to not invent themselves and there are significant costs associated with nearly 13 to 14 years awaiting approvals. But even that really doesn’t capture what transpires in reality. Pharmaceutical companies do not just passively wait for approval, they are required to take significant and costly affirmative steps. So the critics can do all the mathematical trickeration they want, they can bemoan tax incentives not being taking into account and further complain about pharmaceutical companies partnering with Universities to discover the next generation of life saving and life prolonging drugs. But if you are going to factor into the analysis tax incentives then you absolutely need to factor in the time-value of money into the equation, as well as the astronomical failure rate, which creates extraordinary risk.