The cost of developing a new pesticide to market rises to $300 million

According to Agbiolnvestor's latest statistics, the cost of marketing a new pesticide active ingredient in the United States and the European Union has increased from $286 million (€215 million) in 2014 to $301 million (€261 million) today, an increase of 5.7%.

According to the Agbiolnvestor survey, the average cost of screening and developing new active ingredients rose from $72 million in 1995 to $94 million in 2000, an increase of 30.6%. With the introduction of high-throughput screening, combinatorial chemistry, and genomics technologies, R&D efficiency has been greatly improved, potentially resulting in cost savings, with development costs declining slightly from 2005-2008 to $85 million. But between 2005-2008 and 2010-2014, the cost of developing new pesticide active ingredients increased by 25.9 percent to $107 million. The results of the 2014-2019 survey show a further increase of 18.9% in R&D costs to $127 million. Compared to the product development stage, the investment in physicochemical, toxicology and environmental chemistry increased significantly, by 31.6 percent and 58.4 percent, respectively, while the cost of biology (activity screening and small-scale testing) increased by 1.4 percent.

The results showed that the average investment of new active ingredients in the industrial development stage increased from $67 million in 1995 to $79 million in 2000, an increase of 17.9%; Increased 84.8% to $146 million between 2005 and 2008; And maintained this level between 2010 and 2014. The latest survey shows that between 2014 and 2019, the cost of promoting new ingredients fell by 8.5%, to $133 million. Among them, the cost of efficacy tests at this stage increased by 23.9%, while the cost of physical and chemical tests, toxicology and environmental chemistry tests decreased by 13.9%, 23.4% and 35.4%, respectively.

The results of the 2014-2019 survey indicate that inputs in toxicology and environmental chemistry have shifted from the industrialization development stage to the screening development stage. This may indicate that these companies are investing more in the major crop protection market with regard to the environmental regression and metabolite compliance of active ingredients, which also means that the toxicological and environmental chemical properties of active ingredients are more important factors in determining the development of active ingredients from screening to industrialization.

From 2010-2014 to 2014-2019, the average cost of product chemistry (chemical synthesis and formulation) invested in the development phase of new active ingredient screening increased by 31.6 percent to $64 million. This is the single largest cost of developing a new agrochemical. The second largest cost was field trials (scale-up production and registration) at the development stage of industrialization, which increased 23.9 percent to $58 million. In the United States, both segments now exceed the cost of bioactivity assay at the screening and development stage of new active ingredients, which was the largest cost in the previous survey and increased 1.4 percent to $52 million in the current survey.

The 2014-2019 survey showed that the average registration cost of a new active ingredient increased by 25.9% to $42 million, representing 13.9% of the total cost of listing a new active ingredient, meaning that registration costs as a percentage of the total cost reached their highest level since the survey was launched in 1995. Registration costs have increased both in absolute terms and as a percentage of total costs, from an average of $13 million in 1995 to 8.6 per cent of total costs. Overall, registration costs have more than tripled.

Not only has the cost of developing new products steadily increased, the survey results also show that the average time between the first synthesis of a new pesticide active substance and its subsequent commercial rollout has increased to more than 12 years. This lengthening of the time-to-market may reflect more complex regulatory data requirements. Another potential influence could be that regulators are avoiding conditional approvals.