Biased Estimates of New Drug Costs Miss by Billions

PHAR announced today the final results of a study, published in Current Medical Research and Opinion, which found that pre-launch predictions of the budget impact of newly developed drugs tended to be considerable overestimates of their actual sales. The study examined the accuracy of 25 publicly released predictions for the cost of drugs launched in a variety of indications since 2012. Overall, the predicted budget impact was 5.5 times the actual budget impact of the drug. Ten estimates were off by more than $1 billion: 8 overestimated drug sales by more than a billion; and 2 underestimated it by at least that amount. Overestimating budget impact may lead to early access restrictions, higher copays, and other changes that ultimately impact patients. More information about the study is available here and the detailed results can be viewed here.