Sunday, September 18, 2022

JAMA: Cost of Developing Complex Medical Devices $500M

Sertkaya et al in JAMA Network Open - "Estimated Cost of Developing a Complex Medical Device in the US."  Find it here:

While confidence bars are wide, given the diversity of projects, direct costs averaged $54M and when weighted for failures and cost of capital, $522M.

In round numbers the failure rate was 50%, preclinical to feasibility, another 50% feasibility to clinical trial, and 75% in pivotal studies.  

Key summary:

In this economic analysis, the mean development cost for a novel therapeutic complex medical device was $54 million (95% CI, $25 million-$200 million) excluding any postapproval studies that might be required. After accounting for the cost of failed studies and cost of capital, the mean capitalized cost of bringing a novel therapeutic complex medical device to the US market was $522 million (95% CI, $205 million-$3382 million). 

The key factors associated with this cost were the phase transition probabilities: 46.9% for nonclinical to feasibility study, 48.0% for feasibility to pivotal study, 75.7% pivotal study to FDA premarket approval submission, and 80.5% for FDA premarket approval submission to approval. The nonclinical development stage constituted the largest portion of overall cost at 85.0% with the FDA review stage with the highest phase transition probability accounting for only a small fraction at 0.5%.