Call For More Reliable Costs Data On Clinical Trials By James Love

In February 1993, the now defunct US Office of Technology Assessmentissued a report on pharmaceutical R&D, commissioned to provide lawmakers with an independent analysis of the cost of developing a new drug (OTA-H-522). While the OTA report is full of numbers on countless topics, most people are aware of just one. The OTA said $359 million was the "upper bound on the full cost of bringing New Chemical Entities to market." This figure has been used by the multinational pharmaceutical companies to justify the ever-increasing prices for new drugs.

However, many readers of the report were struck by the paucity of independent data collection, and the reliance upon pharmaceutical company consultants for the core findings. Stripped to the core, the 1993 OTA report was simply a restatement of a 1991 paper from the Journal of Health Economics, by four economists with well-known ties to the industry.

In that paper, Joseph DiMasi and Louis Lasagna from Tufts University, Henry Grabowski from Duke and Ronald Hansen from the University of Rochester put the cost of developing a new drug at $231 million, in 1987 dollars. Because of the industry's close ties to the report's authors, and because the Pharmaceutical Manufacturers Association (now the Pharmaceutical Research and Manufacturers of America) published a version of the 1991 study under a PMA cover, the study was widely seen as an industry estimate. This paper, often referred to as the "Tufts" study, was controversial, in part because the figure was far higher than earlier estimates, and also because it relied on data from an unaudited and confidential industry questionnaire.