Benchmarking Phase 3 trial costs

Clinical trial costs are often considered log-normally distributed, which is why it can be tricky to model, benchmark, or predict the cost of a Phase 3 clinical trial.

Fast Data Science assembled a dataset of 524 US-funded Phase 3 clinical trials. The median cost was $2,515,000 and the mean cost was $4,328,000. The standard deviation was $6,204,000.

If we plot those costs on a histogram (below), you can see clearly that it’s very hard to work with this data as it is so skewed.

Above: histogram of Phase 3 clinical trial costs on a standard linear scale.

Because the standard deviation is nearly 1.5x the mean, the arithmetic mean of a phase 3 trial would be an unreliable benchmark. If you were a CFO budgeting for a new Phase 3 trial based on the 4.32M average, you would be over-budgeting for about 65-70% of your trials. The mean is being “dragged” upward by a few massive, multi-center pivotal trials.

The very high standard deviation of the Phase 3 dataset may be caused by:

• non-inferiority trials, which require require massive patient cohorts (sometimes 10,000+) to prove a drug is “no worse” than an existing one, leading to costs that dwarf standard efficacy studies.
• global footprints: A Phase 3 trial running in 20 countries has exponential administrative and regulatory costs compared to a US-only trial.
• chronic conditions: A Phase 3 trial for a chronic condition (like diabetes or cancer) requires years of follow-up.

Fortunately, by taking the log of the cost values, the distribution becomes much closer to normal.

Next Phase (Currently: Phase 3)

Above: histogram of Phase 3 clinical trial costs using a log 10 scale. You can use the button to toggle through the other phases.

Benchmarking and reference class forecasting for your Phase 3 trial

At Fast Data Science, we are working on the next level of clinical trial cost benchmarking: reference class forecasting. For the trial that you want to benchmark for, we can use transformers and vector embeddings to identify similar trials from our database, and apply a correction for inflation.

The tool will display the estimated cost, a lower and upper bound, and the past trials that the cost estimate was based on.

Activity based costing for your Phase 3 trial

As an alternative to cost benchmarking, you can model a trial cost, by identifying all activities associated with the trial (such as the assessments in the schedule of events), and sum these items to create a budget. This is complex and time consuming, but creates an itemised budget. The Clinical Trial Risk Tool allows you to build a site budget directly from the protocol PDF.

Above: the Clinical Trial Risk Tool lets you upload a protocol and will automatically check the protocol design against its checklist, as well as generating a site budget for you.

See also

• Clinical trial cost benchmarking
• Benchmarking costs of Phase 1 clinical trials
• Benchmarking costs of Phase 2 clinical trials
• Benchmarking costs of Phase 4 clinical trials

References

1. Theresia, Yiallourou, et al. “Cost Drivers and Predictive Modeling of Clinical Trial Costs: Analysis of 101 Global Health Trials.” VeriXiv 2.152 (2025): 152.
2. DiMasi JA, Hansen RW, Grabowski HG: The price of innovation: New estimates of drug development costs. J. Health Econ. 2003; 22: 151–185.
3. DiMasi JA, Grabowski HG, Hansen RW: Innovation in the pharmaceutical industry: New estimate of R&D costs. J. Health Econ. 2016; 47: 20–33
4. Young R, Bekele T, Gunn A, et al.: Developing new health technologies for neglected diseases: A pipeline portfolio review and cost model. Gates Open Research. 2020; 2.
5. Martin L, Hutchens M, Hawkins C, et al.: How much do clinical trials cost? Nat. Rev. Drug Discov. 2017; 16: 381–382