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Propaganda or cost of innovation? The high price of new drugs

Propaganda or cost of innovation? The high price of new drugs

Narcyz Ghinea, Postdoctoral Research Associate, Centre for Values, Ethics and the Law in Medicine, Ian Kerridge, Associate Professor in Bioethics & Director, Centre for Values and Ethics and the Law in Medicine and Wendy Lipworth, Senior Research Fellow, Bioethics, all at University of Sydney, examine the claim by the independent, non-profit research group, The Tufts Center for the Study of Drug Development, that new drugs cost US$2.6 billion to develop:

If "Rohit Malpani, director of policy and analysis at Doctors without Borders notes drugs can be developed for as little as US$50 million, and at most, for US$186 million when failures are taken into account." how is the Tuft's estimate so very much higher? This debate important because these costs are used to justify high drug prices, which directly impacts on our health and life expectancy... As the authors say "These prices increasingly have the potential to disable health-care systems, create enormous opportunity costs (as funds that could be spent on other goods and services are diverted to purchase more and more expensive drugs), and place medicines out of reach of all but the most wealthy individuals or governments."


3 Replies

I just had to reply to add in this comment to the article by Howard Wildman

"I do not wish to be an apologist for the pharmaceutical industry – I worked in pharma research for over 20 years – but it should be borne in mind that the cost of medications was only 14% of the total recurrent health-care spending in Australia in 2009-10 (Australian Institute of Health & Welfare Report, 2012). Almost 60% of the spending was for hospital services (public and private) and medical services (GPs and specialists). Similar costs occur in the USA where their annual drugs bill represented only 10% of overall health-care spending in 2004. Rather than disabling health-care systems, many of these so-called high priced drugs can help keep people out of hospitals and cut medical service visits where the health costs mainly occur."


Remember that in the US, it's the government's job to do propaganda. Companies do Public Relations. We all study the same book, though.

"The industry might argue that drug spending is only 10 percent of all health care spending, but that 10 percent equals around (US)$300 billion per year."

Meanwhile, generic drug costs are rising even faster.

I'll bet our US execs won't invite Sir Andrew to tea:



An alternative point of view on this topic - Be Careful What You Wish For; a CancerNetwork Blog by Craig R. Hildreth, MD on August 13, 2015:

He concludes:"The high cost of new cancer treatments is both ridiculous and unsustainable, and kudos to the oncologists who have taken the lead on solving this problem. Just be careful when fighting “greed” by calls for regulation and price controls. I don’t ever want to read about drug shortages or, even worse, pharmaceutical companies calling it quits."

Other posts on the high cost of drugs:


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