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Not conclusively on a per-drug basis. Published estimates show that US pharmaceutical research and development (R&D) spending rose as a share of sales from 11.9% in 2008 to 17.7% in 2019, but that is not the same as proving that the cost of developing each drug surged. Per-drug estimates vary sharply depending on whether they count failed candidates and the cost of financing development.
What does “drug development cost” include?
There is no single accounting definition behind every headline figure. A direct-cost estimate can count spending associated with developing drugs that reach approval. A broader estimate can also allocate costs from failed development programs and account for the time value of money—the cost of capital tied up during development.
Those choices can change the result substantially. Before comparing estimates, check the study’s dollar year, drug cohort, geography, included costs, treatment of failed candidates, and whether it reports a mean or median.
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What do the US estimates say?
| Estimate | What it measures | Important qualification |
|---|---|---|
| $172.7 million | Mean development cost for the US market | 2018 dollars; estimate excludes failed candidates and cost of capital. Sertkaya et al., 2024. |
| $515.8 million | Mean development cost after accounting for failed programs | 2018 dollars; cost of capital is not included. Sertkaya et al., 2024. |
| $879.3 million | Mean development cost after accounting for failures and capital costs | 2018 dollars. Sertkaya et al., 2024. |
| $708 million median; $1.31 billion mean | Adjusted R&D cost per drug in a cohort of 38 FDA-approved drugs from 2019 | Inflation, cost-of-capital, and discontinued-product adjustments included. The study’s unadjusted direct costs were $150 million median and $369 million mean. JAMA Network Open, 2025. |
The 2024 estimates are from Sertkaya et al., “Costs of Drug Development and Research and Development Intensity in the US, 2000-2018”. The 2025 cohort analysis appears in “Use of Clinical Trial Characteristics to Estimate Costs of New Drug Development”.
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These figures are not a time series. The studies use different cohorts and methods, so the 2025 estimate cannot be treated as a direct update to the 2024 figures or as proof that costs rose from one year to another.
What evidence supports a rise over time?
The 2024 study found that pharmaceutical R&D spending as a share of total sales increased from 11.9% in 2008 to 17.7% in 2019. That supports a claim that R&D intensity rose during that period. It does not establish that a consistently defined cost per drug increased by the same proportion: spending relative to sales and cost per drug are different measures.
The 2025 study describes the estimated costs of drugs approved in 2019; it does not provide a historical before-and-after comparison. Taken together, the studies show high estimated costs under broader accounting and rising R&D intensity over a defined period, not a simple, directly measured surge in the cost of each US drug.
Why can the mean be so much higher than the median?
In the 2025 cohort, the adjusted mean was $1.31 billion while the median was $708 million. The mean is pulled upward by unusually costly programs, whereas the median marks the midpoint of the cohort and is less affected by extremes. The study found that excluding two drugs lowered the adjusted mean to $950 million, while the median fell by less than 10%.
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That gap matters when interpreting what is “typical.” The median can better represent the middle drug in a skewed cohort; the mean reflects total costs more heavily influenced by the most expensive programs. The authors wrote: “These findings suggest 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.”
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Is the FDA application fee part of drug development cost?
It is a separate regulatory user fee, not a proxy for total R&D spending. FDA lists the FY 2027 application fee for a covered human drug application requiring clinical data as $4,600,753. That fee applies to the specified application category; it does not represent laboratory research, clinical trials, failed programs, financing costs, or company-wide R&D. FDA explains its fee authority under the Prescription Drug User Fee Amendments.
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How to judge a drug-cost headline
- Identify the measure: Is it direct development expense, or a broader estimate including failed programs and capital costs?
- Check the dollar year: Inflation-adjusted values should not be compared casually with figures in another year’s dollars.
- Check the cohort: Note which drugs, approval years, and geography the study covers.
- Look for failures and financing: Their inclusion can multiply the reported estimate.
- Distinguish mean from median: A high mean may reflect a few unusually costly programs rather than the typical drug.
- Separate industry intensity from per-drug cost: Spending as a share of sales answers a different question than the cost to develop one drug.
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