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Activity‐based costing in pharmaceutical development
Author(s) -
Jørgensen Stig,
Edwards Martin
Publication year - 1998
Publication title -
drug development research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 60
eISSN - 1098-2299
pISSN - 0272-4391
DOI - 10.1002/(sici)1098-2299(199803)43:3<164::aid-ddr6>3.0.co;2-h
Subject(s) - activity based costing , product cost management , cost accounting , risk analysis (engineering) , cost driver , business , pharmaceutical industry , drug development , target costing , process management , operations management , computer science , drug , marketing , pharmacology , medicine , accounting , engineering , cost engineering
Pharmaceutical development costs represent a large and escalating part of sales and profits. In many companies, managers have found that the traditional cost accounting methods are not very useful for improving the efficiency and effectiveness of development activities. To complement traditional systems, we propose activity‐based costing (ABC) as a powerful tool for helping both to control costs and to provide ideas for reducing lead times. This article reviews the principles of activity‐based costing and illustrates the application of these methods to data management processes in clinical development. Drug Dev. Res. 43:164–173, 1998. © 1998 Wiley‐Liss, Inc.