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In the March 2003 edition of the Journal of Health Economics, a trio of economists from the United States wrote about a number. Soon after, that number began popping up all over the place — in newspapers and political speeches, on television and the Internet. But the figure, despite reaching near-canonical status, drew criticism. Some said it was inflated. Less diplomatic detractors said it was a 9-digit fairy tale.
That number was 802 000 000. It was, according to the 2003 study, the number of US dollars that pharmaceutical companies spent, on average, to bring a new drug to market (J Health Econ 2003;22:151-85). Now there are new numbers. Some health economists peg the current cost of drug development at US$1.3 billion, others at US$1.7 billion.
These figures have also been questioned, and Donald Light is among the skeptics. “These high estimates are all from industry-supported studies done by industry-supported economists who, as far as I can tell, compete to see who can come up with the higher number,” says the professor of comparative health care at the University of Medicine and Dentistry of New Jersey and coauthor of an article challenging the validity of the 2003 study (J Health Econ 2005;24:1030-3).
Promoting a link between long odds and big costs, some claim, makes high drug prices more palatable. According to Light, it is just another part of a bigger problem: the growing influence of the marketing department in the lab. This has become a concern for many health researchers, who note that 6 of 7 new drugs offer little, if any, clinical advantage over existing drugs. “It's business,” says Light. “It's not unlike marketing the newest version of a cellphone.”
Moreover, it appears that all of the data for the drugs were provided by the pharmaceutical companies themselves. Those data are secret, and no one else gets to really see or verify them. This creates a large potential for conflict of interest. Although the Tufts study said that the drugs it considered were randomly selected from the companies’ portfolios, there’s no independent proof of that.
When the last study was published, a number of other organizations did their own analyses as well. One was by Public Citizen, the advocacy group founded by Ralph Nader, which basically took the amount that pharmaceutical companies reported in research and development over a period of time, and then divided it by the number of drugs that obtained F.D.A. approval. The group came up with $161 million.
In 2010, a systematic review of studies that looked at the cost of drug development was published in Health Policy. The review found 13 articles, with estimates ranging from $161 million to $1.8 billion (in 2009 dollars). Obviously, methodology matters.
The best thing might be for pharmaceutical companies to open their books and allow researchers to verify these findings independently. That’s unlikely to occur. As long as others control the data and the methods used to analyze them, we will continue to disagree as to how much it costs to develop new drugs.
a reply to: MagnaCarta2015
Martin Shkreli net worth: Martin Shkreli is an Albanian American entrepreneur and hedge fund manager who has a net worth of $50 million. Martin Shkreli was born in April 1983. He is the co-founder of MSMB Capital Management as well as the founder of Turing Pharmaceuticals AG. Shkreli is also the co-founder of Retrophin LLC which is a biotechnology firm. He has been criticized for obtaining manufacturing licenses for out of patent lifesaving medicines including pyrimethamine (Daraprim) and increasing the prices of those drugs in the United States. Shkreli was the executive chairman of Turing Pharmaceuticals and raised the price of Daraprim from $13.50 a pill to $750 after he purchased the rights to the drug from Impax Laboratories for $55 million. He is a League of Legends player and expressed interest in purchasing an esports team for $1.2 million in 2014 but was denied. Shkreli has also been criticized by Citizens for Responsibility and Ethics in Washington as they claim he has manipulated the US Food and Drug Administration's regulatory process to move stock prices for his own gain and sued him for $65 million in August 2015.
originally posted by: roadgravel
a reply to: jellyrev
The inhaler change made a 200% price increase, based on what someone here was paying.
Ever since he got called out for jacking up the price of AIDS medication that has been his MO.
When a pharmaceutical company is charging hundreds of dollars for a pill that university students can make for $6 I'd say there's an issue.