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According to the Missile Defense Advocacy Alliance, an Arrow 3 costs $2,200,000, while a Standard Missile 3 (SM-3) Block IIA costs $36,387,000.

Both of these are 21 inch (fit in that tube diameter) anti-ballistic missiles. The Arrow 3 is claimed to have 2400 km range, while the SM-3 Block IIA has about 1200 km advertised range.

So it beggars belief that the Israeli missile is more than 10 times cheaper than its closest US equivalent (and has somewhat superior characteristics).

Is that true somehow though, especially the price difference?

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    Having been in the army, that wouldn't surprise me at all. I have seen identical parts that had 10x the cost. Military pricing is often determined by political considerations, not economic, practical or rationale ones.
    – Hilmar
    Nov 14, 2023 at 22:02
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    I mean, your sources more or less provide the publicly available information. Any answer is going to be opinion skirting classified information or revealing classified information.
    – David S
    Nov 14, 2023 at 22:02
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    @DavidS: still, it might be an apples to oranges comparison, e.g. one might include R&D costs and one might not. No sources are cited. Nov 14, 2023 at 22:33

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The United States contract to Raytheon for the SM-3 Block IIA antiballistic missile is $2.7b for 62 units, which includes development cost, procurement, and ongoing support. This works out to about $43.5m per missile, which is similar to the cited cost estimate.

The source for the Arrow 3 cited cost estimate on wikipedia (which matches the estimate from the source) is not an actual contract, it is the expected cost-per-unit from 2008, exclusive of development costs, before any contracts for development were awarded.

The number of Arrow 3 missiles produced is currently classified, but the United States has contributed $1.2b for Arrow 3 R&D, and notes in the budget suggest that the joint development agreement appears to indicate costs are split 50/50, although that agreement does not appear to be unclassified.

The DoD U.S. Israeli Cooperative Program Office jointly manages the Upper Tier program with IMoD to ensure that all systems are delivered on time, on budget, and meet the needs of the warfighter. The program is equitably funded between the U.S. and Israel. A portion of the Israeli cost share comes from non-financial contributions such as previously completed work prior to joint program initiation. Contracts are awarded by IMoD or MDA dependent on what is most advantageous to the Joint Governments.

It appears that the US is also spending ~80m per year for Arrow 3 procurement starting in FY2017 and continuing to today, and with the Israeli half, I would say that the overall R&D and procurement of the Arrow 3 to date is approximately $3-3.5b. The total number of missiles acquired for that cost are unknown, but highly unlikely to be more than 100 (given the size of the missile and basing required).

I would say a lower bound estimate for the Arrow 3 is $30m/per to compare to the SM-3 Block IIA's $43.5m/per, although it may be higher as the program is more secretive. The 2-3m per unit hypothetical cost from 2008 appears to be off by at least an order of magnitude (which is perhaps not surprising, as it appears to be a number based on nothing but speculation)

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