Clinical trials are the biggest single cost in drug company R&D, accounting for 36 percent of total research expenditure in 2012, according to Thomson Reuters CMR International. Drugmakers traditionally argue that it is only by ploughing an average of a $1 billion-plus into each new medicine that treatments can be improved.

“The costs should be coming down tremendously,” said Paul Workman, head of drug discovery at Britain’s Institute of Cancer Research. “What’s disappointing is that we haven’t seen it happen yet. We are in a fascinating but frustrating period of transition.”

Don Light, a Harvard professor who is a long-time critic of the drugs industry, is more blunt. He says companies are deliberately clinging to the notion of huge research costs despite the advantages of smaller trials in cancer.

“Claimed high costs are like bragging rights - the higher companies say they are, the more they create the impression of heroism and financial suffering,” Light says.

Still, not everyone in the industry is toeing the line. GSK Chief Executive Andrew Witty startled a number of his peers earlier this year by telling a British National Health Service conference that the $1 billion price tag was “one of the great myths of the industry.” Since the figure includes the cost of failures, any drug company that can improve its success rate should be able to charge less for new medicines.

“For the first time in my career, pricing is becoming a really interesting piece of the dynamic,” Witty said in an interview. “If you believe you have a sustainable model that can churn out more product than anybody else, why wouldn’t you do this?”

That could be particularly important as drug companies begin to combine treatments in hopes of achieving longer-lasting benefits. GSK, for instance, has a second melanoma drug called Mekinist that it plans to combine with Tafinlar. Both are cheaper than existing drugs, though combined, of course, they will still cost many thousands of dollars a year.

Doctors are getting restive. In April, more than 100 leukemia specialists from around the world took the unusual step of complaining publicly in the American Society of Hematology’s journal Blood that cancer drug prices were “too high, unsustainable, may compromise access of needy patients to highly effective therapy, and are harmful to the sustainability of our national healthcare systems.”

With 11 of the 12 cancer drugs launched in the United States last year costing more than $100,000 a year per patient, according to the paper, the debate is not going away.

UNITED STATES VS. EUROPE

But faster trials in the United States won’t always translate into cheaper drug development for companies that do business globally, in part because European authorities may not be willing to accept products based on the FDA’s more flexible clinical trial standards.

Dr. Eric Rubin, head of oncology clinical development at Merck & Co Inc., said the FDA’s willingness to allow accelerated approval based upon single-arm studies - without the traditional control group - is “a big step forward, but it’s not universally agreed upon,” especially in Europe.

Part of the issue is not with drug safety regulators but with government funding agencies, such as the National Institute for Health and Clinical Excellence, or NICE, Britain’s health cost watchdog. It decides whether the state-run health system will pay for a new treatment or drug. It often knocks back expensive drugs as not cost-effective.

“In Europe, it’s a different world because you can get a drug approved by the European regulatory agencies - but if the governments won’t approve funding for it, people can’t access it,” Demetri said.

As a result, companies may be forced to into longer, larger trials just to satisfy cost regulators.