Cost

• In 2002, according to the Tufts Center for the Study of Drug Development, the research and development of an NCE cost $802 million. In 2003, however, the business consultancy firm Bain & Company modified this figure to reflect the cost of failed prospected drugs, bringing the cost of NCE development to $1.7 billion. Based on the "blockbuster" drug model (used with drugs whose annual sales exceed $1 billion), Bain & Company estimates a five percent ROI, and McKinsey & Company, a global business consulting firm, calculated a 7.5 percent ROI since 2001.
  
  

Problems

• Pharmaceutical industry analyst Henry Lowe, who holds a doctorate in organic chemistry, stated in 2009 that the rising costs of drug development, as well as a series of costly phase three (clinical trial) failures, have contributed to the steady decline in ROI.
  
  

Solutions

• Methods to lower drug development expenses and improve ROI include taking measures to achieve a higher success rate of compounds during clinical trials and bringing new drugs to market faster by shortening the time they spend in research and development.