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: 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.