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Trends, Costs  in Healthcare

FDA is a Massive Agency

The U.S. Food and Drug Administration (FDA or USFDA) is an agency of the United States Department of Health and Human Services and is responsible for regulating and supervising the safety of foods, dietary supplements, drugs, vaccines, biological medical products, blood products, medical devices, radiation-emitting devices, veterinary products, and cosmetics..  Has 223 field offices and 13 labs around the country.   Regulates about $1T worth of consumer goods, about 25% of all consumer expenditures in the US.   Cost of the agency is $2.1B, and operates within the HHS.   It began in 1938.

New drugs have to go through a 4 phase trials.

Cost of new drugs

Studies published in 2003 report an average pre-tax cost of approximately $800 million to bring a new drug (i.e. a drug with a New Chemical Entity) to market.[1][2] 

A study published in 2006 estimates that costs vary from around 500 million to 2,000 million dollars depending on the therapy or the developing firm.[3]   These figures relate only to new, innovative drugs (drugs with a New Chemical Entity NCE, also called New Active Substance NAS).

Each year, worldwide, only about 26 such drugs enter the market (2005: 26, 2004: 24, 2003: 26, 2002: 28).  The development cost of the thousands of other drugs are much smaller. The $800 million quoted include the cost of all drug development which did not result in a new drug. It also includes some 400 million $ of opportunity costs.

Approved 3 drugs in Mar 09, 6 in Feb, 4 in Jan 09, 8 in Jan 08, 7 in Feb 08, 6 in May 08, 9 in Aug 08.  Rough guess is less than 100 a year.