In a widely cited article, DiMasi, Hansen, and Grabowski (2003) estimate the average pre-tax cost of bringing a new molecular entity to market. Their base case estimate, excluding post‐marketing studies, was $802 million (in $US 2000). Strikingly, almost half of this cost (or $399 million) is...

Previously published research by two of the authors found that returns on R&D for drugs introduced into the market in the 1970s and 1980s were highly skewed and that the top decile of new drugs accounted for close to half the overall market value. In the 1990s, there have been significant...