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| Table 2 Distribution of R & D Costs by Category | | | | | Personnel | | | | Materials | | | | Facilities | | | | Contracts | | | | Support/Admin | | |
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In development, the intramural staff are also a valuable asset, especially for formulation and assay development, preparing novel delivery systems, and data handling when speed and control are essential. For these activities, skilled personnel and the facilities to support them are necessary components of the budget. However, a well-designed development program requires access to large numbers of suitable patients, and contract research organizations (CROs) contribute significantly to the development budget. Contract laboratories are also a viable and cost-effective option for nonclinical studies. This is especially true for development programs that require unconventional dosage forms, testing in nonstandard species, and dealing with situations in which intramural facilities or expertise are unavailable. |
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For both research and development, administrative overhead should be kept low. Current industry estimates [10] show that support services account for 20% of the R & D personnel and approximately 15% of the budget. Regulatory requirements for documentation encourage proliferation of administrative activities, but modern technologies are also available to automate and streamline these functions, which increases speed of information flow and decreases costs. |
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B. Considerations in Budget Control |
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A sufficient budget for research is much harder to predict than for development, because the milestones and accountability of discovery projects are harder to control. Serendipity often factors into the success of the research effort, as well as unanticipated breakthroughs in technologies that provide the tools for drug discovery. The time, cost, and chances for success are therefore much more variable in research than they are in development. As a result, budgeting drug discovery must be flexible: the company should provide as much funding as it can afford, avoid big swings in funding from year to year, and establish a balance between tolerance of high costs in projects that are moving slowly and the need to focus costs on high-priority, high-yield projects. |
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