Drug discovery and NCEs:

Each year, CDER approves series of new drugs and biological products. Some of these products are often innovative new products that never before have been used in clinical practice. FDA’s classification of a drug as an “NME” for review purposes is distinct from FDA’s determination of whether a drug product is a “new chemical entity” or “NCE” within the meaning of the Federal Food, Drug, and Cosmetic Act. According to Medscape the ratio of researched drugs to eventually approved therapies at between 5,000-to-1 and 10,000-to-1. Nonetheless, if a drug manages to gain FDA approval, the cumulative direct and indirect expenses are huge.  As per estimated study performed by a well-known university,  the true cost to bring a drug to market was US$2.56 billion. This figure is inclusive of just shy of $1.4 billion in average out-of-pocket costs to the drug developer, as well as $1.16 billion in time costs, which are essentially the expected returns that investors forgo while a drug is in development.

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