For drug development companies and the industry itself, the cost of developing new drugs has been a major issue in recent years. An oft-cited 2003 study reported an average cost (before taxes) of $800 million to successfully bring a new drug to market, and another study, published in 2006, puts figures at $500 million to $2 billion for the same. The actual numbers have been the subject of much debate, with many pointing out that developing less innovative drugs costs much less, but the fact is that developing a new drug is not an economic activity for drug development companies.

Why is this the case? In short, devising a new drug is expensive because it is a complicated and time-consuming activity. Drug development component procedures, such as R&D and clinical trials, must be complicated and expensive. Chemical compounds can have all kinds of effects on the human body, so numerous and thorough safety tests must be carried out before the medicine is approved for human ingestion. And even with those medications that are initially effective and non-toxic, many side effects can be subtle and aggravated, becoming apparent only after certain periods of time. Therefore, this process must be laborious and slow, because all the bases must be covered.

Agencies such as the Food and Drug Administration regulate the drug development process very strictly and protect the welfare of consumers by ensuring that pharmaceutical development companies are as demanding as they need to be. These same companies must make up for lost time by developing and refining processes to get most, if not all, procedures right in as few tries as possible.