New Study Shows That High R&D Costs Don't Explain High Drug Prices:
For years, defenders of pharma patents loved to claim that the reason that they needed patents and the reason they had to charge extortionate rates for drugs was because of the high cost of R&D for new drugs. The numbers keep going up. [...] The latest I've heard them claiming is an average of $1.5 billion per new drug.
The number has always been bunk. [...]
Anyway, given all that, there's a new study out that [...] compared drug prices with the price of R&D on those drugs. If the high cost of development was really what was driving the high drug prices, there should be some correlation there, right?
"Our findings provide evidence that drug companies do not set prices based on how much they spent on R&D or how good a drug is. Instead, they charge what the market will bear," said senior author Inmaculada Hernandez, PharmD, PhD, associate professor at Skaggs School of Pharmacy and Pharmaceutical Sciences.
Of course, that finding shouldn't really be a surprise to anyone. Of course pharma companies are going to charge "what the market will bear." But, therein lies the problem: we don't have an actual market for most of these drugs. [...]
But, at the very least, don't just accept the claim that drugs cost a lot because pharma has to spend a lot on R&D. All of the evidence suggests that's ridiculous.
Journal Reference:
Olivier J. Wouters; Lucas A. Berenbrok; Meiqi He; et al. Association of Research and Development Investments With Treatment Costs for New Drugs Approved From 2009 to 2018 JAMA Netw Open. 2022. DOI:10.1001/jamanetworkopen.2022.18623
(Score: 5, Insightful) by Snotnose on Monday October 10 2022, @12:11AM (8 children)
I don't get it. It's up to your doctor to keep up with new drugs, not you with your medical degree from Google U. Those advertising costs should drop to damn near 0 ASAP.
The trend I see now is "Ask your doctor if $OverpricedDrug is right for you". No mention of what the drug is for. If I was a doctor and someone asked me that I'd tell them to put their medical degree to good use and figure it out yourself.
When the dust settled America realized it was saved by a porn star.
(Score: 5, Informative) by Mykl on Monday October 10 2022, @02:27AM (2 children)
Agree. In most civilized countries, pharmacy medicines cannot be marketed to the public. It does absolutely nothing to improve patient outcomes, so a government that actually cares about the health of its citizens rightly outlaws it.
(Score: 2, Insightful) by Anonymous Coward on Monday October 10 2022, @03:01PM
It used to be that way in the US until the late 90s when Congress decided that it was ok to get rid of the ad ban as well as to get rid of the requirement that dietary supplements are shown to either be effective or even safe. It was totally coincidental that the main sponsor of the bill has family in the dietary and supplement business.
(Score: 2) by aafcac on Monday October 10 2022, @10:49PM
Honestly, there's little evidence to suggest that marketing to patients directly has any meaningful impact on how many doses are sold. Just because you hear about a new medication that can address one of your problems doesn't mean you get to have it, you still have to convince your doctor, and possibly insurance company, that you need it and that that medication is the right one. In practice, there's not much difference between countries that allow the ads and those that don't after a brief period when the medications are first cleared for distribution and use.
The efforts that focus on the doctors are much more dangerous, there should be strict rules preventing most of the direct to physician marketing as that can have a much larger impact than ads to potential patients.
(Score: 2) by aafcac on Monday October 10 2022, @10:45PM (3 children)
It doesn't make any meaningful difference whether or not they advertise specifically because the patients have to get a prescription for prescription medications. There might be a slight uptick in the first bit when a new drug reaches the market, but over time the difference between whether or not a company is allowed to advertise is minimal.
If we're going to be concerned about it, supplements are much worse in that regard, the standards are pretty much nonexistent these days and in some cases the substance just has to dissolve and not be toxic in order to be marketed. There isn't even a process in place if a manufacturer wants to get it approved.
(Score: 2) by sjames on Tuesday October 11 2022, @03:49AM (2 children)
It probably does help reduce patient pushback on expensive prescriptions though.
(Score: 3, Interesting) by aafcac on Tuesday October 11 2022, @12:55PM (1 child)
Yeah, but you've got a doctor for that. If your doctor can't explain why this particular course of treatment is appropriate to you so that you consent, then you need a better doctor. Either a doctor that better knows medicine or one that's better at explaining it. Ads don't have much of an effect on what the patients ultimately receive.
(Score: 2) by sjames on Tuesday October 11 2022, @03:26PM
Doctors often have no idea how expensive a prescription is unless patients push back. Once they do, the doctors may re-think the benefits of the latest and greatest vs. the slightly older and often just as good medication. If insurance pushes back, the patient will either encourage the doctor to try the older medication or push the insurance to pay for the new. Which one happens is influenced strongly by advertising.
(Score: 2) by mcgrew on Tuesday October 11 2022, @06:31PM
I wonder how much the drug companies had to pay in bribes to legalize advertising prescription drugs over the air? I doubt that this subject, drug prices, is a problem anywhere but here in the US. Most countries are single-payer, CVS is said to have donated half a billion dollars to keep "socialized medicine" out of the US. When I heard that, I stopped shopping there.
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(Score: 4, Insightful) by RedGreen on Monday October 10 2022, @12:29AM (2 children)
that parasite corporations are being the parasite bastards they are. Who would have thought it from the same companies that take an existing medication change the formula and ream their customers for the price on the "new" drug. Never in my wildest dreams would any thought of them being so disgusting have occurred to me, yeah right, take them out line them up against a wall and shoot then piss on the lot of them...
"I modded down, down, down, and the flames went higher." -- Sven Olsen
(Score: 5, Informative) by driverless on Monday October 10 2022, @12:55AM (1 child)
Years ago a friend of mine worked for a pharma company. They wanted to buy some expensive new toys for the office, and he joked that "we'll just put the price of meds up, it's not as if people are going to be able to stop their cancer medication". That's the attitude those companies have, we can just keep milking those cash cows, it's not like they can opt out.
(Score: 3, Insightful) by bzipitidoo on Tuesday October 11 2022, @05:39PM
We have seen that really determined people can opt out. Some have paid the ultimate price. Sure wish all that energy they poured into refusing vaccines had been put to good use, to meaningfully reform US health care.
(Score: 0) by Anonymous Coward on Monday October 10 2022, @01:09AM (4 children)
Are we really going to keep pretending we don't know? Legislation doesn't come cheap. And the spoils from the ongoing medicare pricing scam have to be spread out.
(Score: 2) by aafcac on Monday October 10 2022, @10:53PM (3 children)
It's really not what people think. Yes the profits are outrageous, but money made on one medication is often used to subsidize less profitable medications. For example, antibiotics are horrible for business, the more doses they sell the less effective they become and over time it's become harder and harder to develop new antibiotics. But, boner pills are often times a lot more profitable, so the profits from the boner pills help to offset the reduced profitability of medicines that have legitimate medical uses, but probably wouldn't be developed at all due to the low profit margins that result.
Yes, it is rather cynical, but as long as we allow pharmaceutical companies to be publicly traded for profit businesses, that's how it's going to be. There's only so much "goodwill" that a company can accrue before the shareholders demand profits.
(Score: 3, Informative) by sjames on Tuesday October 11 2022, @03:06PM (2 children)
The boner pills were a case of snatching victory from the jaws of defeat. They were meant for heart conditions but it turned out they were highly specific about where they increased blood flow.
But one look at the price tag on new antibiotics will convince you that they make back every penny spent on development without any subsidy. Perhaps not as much as they make on boner pills, but certainly FAR from charity.
(Score: 2) by aafcac on Tuesday October 11 2022, @03:29PM (1 child)
The keyword there is new. Unlike other types of medication, they can't expect to charge that much through most of the entire lifetime of the relevant patents. I never suggested that they aren't making profits, but you do have to consider that it's not a matter of developing antibiotics or nothing at all. In all likelihood if they didn't research that, they'd be researching something that would be more profitable.
Not to mention those cures for rare diseases where there may only be a few sufferers in the world. Yes, the doses on that can be crazy expensive, but even at that, there's no way that the R&D on that breaks even.
(Score: 2) by sjames on Tuesday October 11 2022, @03:57PM
But they DO charge that much and they DO make back their investment many times over. In fact, once the patent is expired they often pull various dirty tricks to keep a competing generic off the market so they can continue charging that much for a few more years. Lately there's been a trend of rapacious price increases even on very old medications. For example colchicine increased several hundred percent a few years ago and it's old enough that George Washington took it (in herbal form).
As for the rare diseases, those are often subsidized and the research is often performed by universities using government grants.