A recent study has calculated the average cost for drug development (including marketing approval) at $2.558 billion. According to Tufts Center for the Study of Drug Development, this figure was reached through estimating average out-of-pocket costs to be $1.395 billion and time costs to be $1.163 billion. Once the drug is approved, R&D costs for new indications, formulations, dosages and side-effect monitoring reach $312 million, making the product life cycle cost per drug climb to $2.870 billion on average. The study was based on information from 10 pharmaceutical companies and 106 random drugs that were tested on humans around the world from 1995 to 2007. Factors increasing out-of-pocket costs include complex and large clinical trials, and comparison drug testing. All cost numbers are in 2013 dollars.

Source: Tufts Center for the Study of Drug Development