The Pediatric Research Equity Act (Public Law 108-155) (PREA), requires the conduct of pediatric studies for certain drug and biological products. Specifically, PREA requires new drug applications (NDAs) and biologics licensing applications (BLAs) (or supplements to applications) for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration to contain a pediatric assessment unless the applicant has obtained a waiver or deferral (see section 505B(a) of the Act) (FDA, 2005). Thus, drug sponsors often need to conduct pharmacokinetic and safety studies for the pediatric population post-FDA approval. According to experts and drug sponsors interviewed, these studies could last up to 3 years and cost approximately $10.0 million on average. For sensitivity analysis, we again assume that the cost of post-approval pediatric studies has a triangular distribution with a lower bound of $8.0 million and an upper bound of $12.0 million.