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Comment & Response
August 4, 2020

Research and Development Costs of New Drugs

Author Affiliations
  • 1Department of Emergency Medicine, The George Washington University Medical Faculty Associates, Washington, DC
JAMA. 2020;324(5):516. doi:10.1001/jama.2020.8645

To the Editor The study by Dr Wouters and colleagues1 estimated the cost of pharmaceutical research and development using publicly available data. However, the discussion failed to address certain salient factors.

The authors failed to mention the increasing role of venture capital in research and development investment. In 2016, venture capital invested at least $3.2 billion in research and development.2 Buyouts, mergers, and acquisitions play a large and probably overlooked role in reported research and development expenses. Such transactions are based on predicted profitability,3 not research and development expenditures, and probably should be excluded from analysis.