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Bringing a new drug to market can cost billions. Here’s the tally for each phase of a clinical trial—and how those costs dictate what you pay at the pharmacy.
Part of Clinical Trials Guide
Mar 30, 2026
Clinical trials are the scientific engine behind nearly every new innovative therapy for chronic conditions including autoimmune, genetic, and neurological disorders. Rigorous studies are especially important for developing treatments for rare conditions that have historically received less research attention. Without them, life-saving discoveries made in laboratories would never reach those who are diagnosed with these diseases.
Even so, conducting a clinical trial is an enormous undertaking, often requiring more than a decade to organize and running up serious sums to launch and see through, according to recent research that details how drug development can take 10 to 15 years from discovery to approval for clinical use, costing anywhere between $1 billion to $2 billion.
Many Americans only see the price of Rx drugs at the pharmacy counter. It’s tougher to gain insight into what leads up to their arrival—the research, years of preclinical testing, and finally the clinical trials themselves, which frequently yield failed experiments before approval can be gained—that make your purchase of the medication possible.
“A drug may seem cheap to make, but this does not account for the hundreds of millions spent in conducting clinical trials and all associated research,” says Katia Schlienger, M.D., Ph.D., an immuno-oncologist and the chief medical officer at Celex Oncology Innovations Inc, a biotechnology company in New York City.
To fully appreciate the often eye-watering price tag of your medications at the pharmacy, it’s helpful to understand the long, sometimes winding road required to get them there.
Why Clinical Trials Are So Pricey
“Starting a clinical trial requires far more than simply having a promising idea,” says Biagio Ricciuti, M.D., Ph.D., a thoracic medical oncologist and a scientist at the Dana-Farber Cancer Institute in Boston, MA. “It begins with the underlying science, preclinical testing including safety assays and experiments, then protocol design, and regulatory submission.”
All of which costs money, and the wide-ranging financial considerations are complex, adds Dana Feuchtbaum, the chief operating officer at Iterative Health, a health care technology and services company in New York City, whose mission is to accelerate scientific innovations to reach people faster and more equitably. Simply getting to the starting line of a clinical trial means a substantial investment has already been made—and that’s the tip of the iceberg. “A clinical trial requires investment from multiple stakeholders and demands careful coordination across study sponsors, research sites, patients, and clinicians,” Feuchtbaum says.
Such detailed coordination translates into steep costs. “Time is money in clinical research,” Feuchtbaum says. “Every day that a drug remains in development instead of on the market costs millions of dollars, making efficient trials essential to recoup investment and fund ongoing research that advances patient care.”
There are four phases of a clinical trial. Each one gets progressively more expensive than the last, especially as studies expand in size, complexity, and regulatory oversight, says Dr. Ricciuti.
- Phase I. This stage is usually small, monitoring a new drug in humans. Safety, tolerability, and dosing are all evaluated in this phase.
- Phase II. This stage begins to evaluate the efficacy of a possible new treatment in larger groups of people.
- Phase III. This stage rigorously tests a new treatment in larger groups of people against the standard of care.
- Phase IV. This stage evaluates efficacy and safety in real-world populations.
During these four stages, “clinical research is highly regulated and closely monitored by global regulatory bodies such as the U.S. Food and Drug Administration [FDA],” explains Jennifer Meriwether, the director of clinical operations at Lupus Therapeutics, the clinical affiliate of the Lupus Research Alliance, in Westminster, CO. And meeting those standards requires extensive infrastructure, including trained research staff with salaries ranging from $55,000 to $190,000, depending on the position, per a report by the Certified Clinical Research Professionals Society.
The cost of lab tests (including the analysis of blood samples) and imaging scans is trickier to calculate, says Meriwether, who adds that earlier trial phases focus more heavily on such biometric data. Costs also depend on the disease area being studied. For example, conditions that require repeat MRI or CAT scans—which can run from a few hundred to a few thousand dollars per scan—can easily skyrocket costs.
Data storage isn’t cheap, either. “The amount and complexity of data required to establish safety and efficacy can [also] vary—indication, type of data being collected, number of assessments, time points required,” and so on, Meriwether points out. Often, data systems store the results of blood or imaging tests, as well as any assessment notes from on-site researchers and clinicians, which can cost between $1,000 and $5,000 per month—the price of the software alone. When you factor in data management tasks, analyzing the data, and other costs, the total figure can easily reach $100,000 annually, depending on the size of the study.
Many clinical trial sponsors also rely on contract research organizations (CROs), a.k.a. independent companies or research centers, to run specific areas of the clinical trials including managing trial operations, data collection, and site coordination across multiple locations. This approach has been shown to improve efficiencies and timeliness of clinical development, as CROs bring specialized expertise and project management skills to the table. Still, CROs can also pile on “significant operational costs,” Feuchtbaum notes. Beyond the costs of running the clinical trial, sponsors can expect a CRO markup of approximately 10% to 25%.
“When you factor in infrastructure, staffing [salaries], patient recruitment, insurance, and regulatory oversight, the cost of initiating and executing a clinical trial can quickly climb into the tens or even hundreds of millions of dollars, particularly for large, late-stage studies,” Feuchtbaum confirms. “This level of investment underscores why strong collaboration between biopharma sponsors and high-performing research sites is critical to efficiently bringing new therapies to patients.”
Government Funding Is Disappearing
Then there’s the role of public funding to consider. Traditionally, clinical innovation has been deeply rooted in academic research, Dr. Schlienger says. “Universities and academic centers serve as the primary engines for discovery, identifying the novel receptors, growth factors and genetic mutations that drive diseases like cancer,” she adds. And “because these institutions rely heavily on government funding, the earliest stages of clinical research, where these discoveries are first tested in humans, are inherently dependent on public support.”
Overall, government funding comprises an estimated 30% of total clinical trial funding, with approximately 70% of trials funded by biopharmaceutical and biotech companies. Public funds are especially critical for research being done on rare disorders that may not offer big profit incentives for private enterprise to chase a possible treatment or even a cure.
But in early 2025, the Trump administration slashed government funding for medical research projects from the National Institutes of Health (NIH) tied to clinical trials that “didn’t align with” its priorities. A research letter in JAMA Internal Medicine revealed that these cuts affected roughly one in 30 clinical trials and more than 74,000 then-active participants. The administration’s FY2026 budget proposal hit NIH’s research and development department the hardest with a recommended 41% decrease in funding. For context, that means that $19 billion may be slashed from this year’s budget. “That kind of instability delays hiring, contracting, regulatory start-up, lab support, and patient enrollment, all of which ultimately slow the path from discovery to approved therapy,” Dr. Ricciuti notes.
Such cuts would likely have disproportionate effects on research in certain illnesses. “Without this public investment, the pipeline for breakthrough therapies in high-need areas, including pediatric cancer and rare diseases, would effectively stall,” Dr. Schlienger says.
Breaking Down the Costs of Each Phase
So why, exactly, is therapeutic research so expensive? Dollars start adding up in its very earliest stage: According to Meriwether, before a drug even reaches phase I of a clinical trial, it typically spends five to nine years in laboratory research, where scientists study how the compound behaves in a petri dish or in animal models, for example. “Once the safety of the compound or new potential drug has been established, the drug will enter the [first] clinical research stage.”
The costs for each phase vary with the trial’s sample size, study duration, and overall complexity. “With each phase, the volume of data collected and subsequent analyses also require more time and resources,” Meriwether says.
A 2016 cost analysis from the U.S. Department of Health and Human Services (HHS), the most recent available, broke down the average spending for each of clinical phase:
Phase I
This preliminary phase comprises a series of studies that test the drug compound in humans. “These studies are generally small and are primarily designed to evaluate safety,” Dr. Ricciuti says. “Investigators determine how the drug behaves in the body, identify potential side effects, and establish the appropriate dose and schedule that can be safely administered to patients.” Phase I usually lasts for less than one year, Meriwether notes. Average costs: $1 million to $5 million.
Phase II
Phase II trials enroll a larger group of patients with the targeted disease to assess whether the treatment is effective while continuing to monitor safety, Dr. Ricciuti explains. The goal is to determine whether the drug should advance to larger trials. The studies in this phase can last several months or up to as much as two years, Meriwether says. Average costs: $7 million to $20 million.
Phase III
If study results are promising, the treatment advances to Phase III trials, a.k.a., large, often global studies that enroll hundreds or thousands of patient participants. “These trials are designed to rigorously compare the new treatment against the current standard of care to determine whether it provides a true clinical benefit,” Dr. Ricciuti says, evaluating outcomes such as survival, disease progression, and quality of life. Costs often skyrocket during this stage due to the scale, complexity, and long-term monitoring required.
Phase III usually takes anywhere from one to four years, Meriwether explains, and time itself is a major cost driver. The longer a clinical trial runs, the greater the financial risk for the companies and investors funding the research. “The time to conduct one or several clinical trials is directly proportional to the risk that a company, venture capitalist, or financing bodies take by investing in the company or compound,” says Dr. Schlienger. “Hence, the tendency to try to shorten the timelines to bring innovation faster to the patients and to decrease the risk that investors take.”
Usually, regulatory bodies (namely, the FDA) rely on this phase to determine whether the drug should be approved. Average costs: $11 million to $100 million.
Phase IV
After a therapy is approved and enters clinical practice, Phase IV trials continue to monitor its safety and effectiveness in real-world populations, Dr. Ricciuti notes. “These studies help identify rare or long-term side effects that may not have been evident in earlier trials, assess how the drug performs in broader and more diverse patient populations, and explore additional uses such as new combinations or different disease settings,” he adds. Average costs: $5 million to $15 million.
What Happens When a Trial Fails
“Remember, the most expensive trial is a trial that fails,” Dr. Schlienger says. Even after years of rigorous research and millions of dollars invested, most experimental drugs never make it to your local pharmacy.
“Only about one in 5,000 compounds make it to ultimately become an approved drug,” says Meriwether. “This means that pharmaceutical companies spend a significant amount of time and money evaluating compounds, many of which will never be successful.”
Failure can come at any stage of clinical development. “If a clinical trial fails, the sponsor may lose not only the direct cost of that individual study but also years of cumulative investment that went into earlier stages of development,” adds Dr. Ricciuti.
And that, in turn, has a downstream effect on the next round of treatments coming through the research pipeline. “When only a small fraction of drug candidates ultimately succeed, the cost of failed programs, long development timelines, and large pivotal trials gets built into the economics of the products that do reach the market,” Dr. Ricciuti says.
Beyond the financial impact, unsuccessful trials also represent lost opportunities for patients. “When a promising therapy fails to demonstrate benefit, it means that patients are still waiting for better treatment options,” Dr. Ricciuti points out.
That said, there is still immense value in all clinical trials—even those that don’t bring new therapeutics to market. “Even unsuccessful trials remain valuable scientifically,” Dr. Ricciuti says. “They help the research community learn what does not work, refine future study designs, and guide the development of better therapies in the future.”
All of which is to say, when your pharmacist hands you a brown bag and receipt with four figures on it (which hopefully your insurance has helped cover), there’s a reason it costs a king’s ransom to keep you feeling well. Research depends on it.
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Cheyenne Buckingham, Health Writer
Cheyenne Buckingham is a freelance health writer, editor, and content strategist in Brooklyn, NY. She specializes in chronic conditions, mental health, nutrition, fitness, food policy, and more. In addition to HealthCentral, her work can be found on Shape.com, Well+Good, Condé Nast Traveler, Men’s Health, GoodRx, Runner’s World, and more. When she’s not writing, she’s strength-training, training for marathons, and traveling the world.