Is the Cost of Drug Development "Accurate"?

March 20, 2015
News Update

March 20, 2015.

Are pharmaceutical companies paying more for R&D by acquiring companies than by carrying out the R&D themselves?

This is a question Gary Pisano, professor of business administration at Harvard Business School, addressed in the Wall Street Journal this week.

Pisano points to expert theories arguing that pharma companies should cut back on internal research and buy drugs from small biotech companies instead. But this is wrong, he says. Pisano compared the costs over a 20-year period of drug development at large pharmaceutical companies and biotech firms and “found no meaningful difference on average between what large pharmaceutical companies and biotech companies spent to successfully develop a drug.”

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