By CriShaun Hardy | October 29th, 2026
New Approach Methodologies (NAMs) have become an important part of discussions about the future of biomedical research, toxicology, and regulatory safety testing. Technologies like organ-on-chip systems and computational models offer the possibility of generating more human-relevant scientific information while reducing reliance on animal testing. Alongside their scientific and ethical advantages, NAMs are frequently promoted as a financially attractive alternative to conventional research methods.
Are NAMs cheaper?
The answer is nuanced. Although certain NAMs can reduce the cost and duration of individual tests, these methods may require significant upfront investments in equipment, training, development, and validation. Furthermore, some of the most significant potential economic benefits of NAMs may not come from reducing immediate testing costs, but from improving scientific decision-making and avoiding costly failures later in the research and development process.
As regulatory agencies increasingly recognize the potential of NAMs, evaluating their financial implications has become an important part of understanding whether and how these technologies can be integrated into existing research and regulatory systems.
The Cost of Conventional Animal-based Testing
On its face, animal-based research can entail substantial costs, particularly when studies require extended observation periods, purpose-bred animals, or specialized laboratory infrastructure. In addition, a lab conducting animal-based research must also consider welfare related costs like housing and veterinary care.
In December 2025, the FDA issued draft guidance identifying circumstances in which six-month nonhuman primate toxicity studies for monoclonal antibodies could be reduced or eliminated. According to the agency, a typical nonclinical program for a monoclonal antibody could involve more than 100 nonhuman primates, at the estimated cost of approximately $50,000 per animal. These figures demonstrate the financial significance of avoiding certain animal studies, especially when considering that successfully completing animal toxicity testing does not guarantee FDA approval, as safety and efficacy concerns may still arise during human clinical trials.
However, replacing animal testing would not necessarily eliminate all associated costs. Developers may still need to conduct alternative assessments and generate additional evidence to demonstrate safety. The question then becomes whether NAMs can produce scientifically sufficient and comperable information at a lower cost overall.
Can NAMs Reduce Research and Development Costs?
The strongest economic arguments for NAMs are their potential to improve research efficiency and to prevent costly development failures. Traditional animal models do not always accurately predict human biological responses. Consequently, promising preclinical findings do not guarantee successful clinical outcomes. A NAM capable of identifying human-specific safety concerns earlier in development can provide substantial economic value.
One such example is a 2022 study evaluating human Liver-Chip technology. In the study, researchers assessed 870 Liver-Chips using a blinded set of 27 drugs, reporting “87% sensitivity and 100% specificity” for predicting drug-induced liver injury under the study’s testing conditions. Using those findings, the study estimates that widespread use of the technology could generate more than $3 billion annually through productivity gains in the pharmaceutical industry’s R&D process. Importantly, these figures represent a projected benefit from a specific technology rather than documented industry-wide savings. Nevertheless, they illustrate how improved scientific predictions could lead to economic benefits beyond individual testing costs.
The Financial Challenges of Adopting NAMs
Despite potential advantages, a broad transition to NAMs involves some financial risks and challenges. Advanced testing platforms may require new equipment, technical expertise, and updated personnel training. These investments could be particularly burdensome for smaller laboratories and biotechnology companies.
Regulatory uncertainty can also introduce financial risk. As regulatory agencies establish clearer pathways for reducing reliance on animal studies, a developer may invest in a NAM only to discover that animal testing remains necessary to satisfy existing regulatory expectations. In these circumstances, NAMs may initially increase expenditures rather than reduce them, especially where validation pathways for acceptable NAMs are still developing.
A 2024 review examining barriers to NAM adoption identified implementation expenses, uncertainty surrounding regulatory acceptance, and concerns about returns on investment as significant obstacles. As such, the economic value of NAMs depends not only on their scientific capabilities but also on whether their results can replace, rather than merely supplement, existing testing requirements.
Regulatory Acceptance and the Economics of Transition
Regulatory policy plays a significant role in determining whether the potential financial benefits of NAMs can be realized. In April 2025, the FDA announced a roadmap to reduce reliance on animal testing in nonclinical safety studies. In March 2026, the agency issued draft guidance outlining general considerations for validating NAMs used in drug development. The guidance emphasizes context of use, biological relevance, technical characterization, and fitness for regulatory purposes. These developments demonstrate an attempt at greater clarity for companies considering investment in human-relevant technologies.
However, draft guidance does not guarantee that a particular NAM will be accepted for regulatory application. Developers must demonstrate that their methodologies provide reliable information appropriate for the decisions being made. Ultimately, clearer regulatory expectations could reduce investment risks and encourage adoption, while continued uncertainty may limit the financial incentives to transition away from animal testing methods.
Public Investment in NAMs
Beyond individual research programs, NAMs are also receiving increased public investment, reflecting growing interest in their development and broader implementation. In March 2026, the National Institutes of Health announced more than $150 million in funding through its Complement-ARIE program to support the development, validation, and standardization of human-relevant research methods.
Similarly, in October 2026, the National Center to Accelerate Cures (NCAC) launched with $3 million in congressionally directed funding to advance NAMs toward regulatory acceptance. Through shared infrastructure, regulatory expertise, and collaboration between developers, industry, and regulatory agencies, NCAC aims to address some of the practical barriers associated with bringing new methodologies into regulatory use.
While these investments do not independently demonstrate the economic viability of NAMs, they may help reduce development barriers and costs that individual organizations would otherwise have to bear. Their long-term economic value will depend on whether these investments translate into more efficient research and broader adoption.
How Should Economic Success Be Measured?
Overall, evaluating the financial merits of NAMs requires looking beyond the price of individual experiments. A relatively inexpensive test may provide limited value if its results cannot reliably inform scientific or regulatory decision-making. Conversely, a more expensive methodology may prove financially worthwhile if it prevents additional testing, reduces development delays, or identifies problems earlier than a given traditional model.
Recognizing the current evidentiary gap, meaningful cost comparisons between NAMs and traditional animal-based approaches must account for differences in the technologies used, the information generated, and their intended applications. A computational screening method may have a substantially different cost structure from a complex organ-on-chip platform, just as early-stage research presents different financial considerations from large-scale regulatory safety assessment. The economic viability of NAMs must be evaluated within their intended contexts of use and compared against the costs and scientific value of existing approaches.
An Emerging Economic Opportunity
The financial case for NAMs is becoming more substantial as scientific capabilities improve and regulatory agencies establish clearer pathways for their use. Evidence suggests that certain NAMs could reduce testing expenditures, improve research productivity, and potentially prevent costly development failures. Nevertheless, substantial implementation costs and regulatory uncertainty remain early obstacles to realizing these benefits.
The economic argument for NAMs should therefore not rest on the assumption that newer methodologies are inherently cheaper than traditional animal-based approaches. Instead, their financial merits should be evaluated through the relationship between cost, scientific performance, and the quality of the decisions they support.
Ultimately, the strongest economic case for NAMs may not be that they allow researchers to spend less on each experiment in the short-term, but that they can offer more ethical methods towards the goal of producing informative human-relevant results while potentially reducing broader research costs.
The views expressed do not necessarily reflect the official policy or position of Johns Hopkins University or Johns Hopkins Bloomberg School of Public Health.
