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A lot of people do, actually, and your estimate of the cost associated with bringing a drug to market is off by an order of magnitude. The true cost of bringin
by iplaw 9y ago
A lot of people do, actually, and your estimate of the cost associated with bringing a drug to market is off by an order of magnitude.
The true cost of bringing a drug to market - inclusive of the extensive research and development required, the failed candidates, the FDA testing and approval processes, etc. - is around $2,800,000,000.
And so, as the saying goes, the first pill costs $2.8B, the second pill costs $0.01. "People" only consider the $0.01 cost to produce the pills that they desire to take, and seem to easily ignore that initial $2.8B investment. This is why patent protection is so critical to the success of many industries, especially medical devices and pharmaceuticals.
This also explains why drug companies refuse to develop life-saving drugs if the potential market for the drug is too small. In many cases, they would have to charge $1,000,000+ per treatment to break even. There are several medications on the market which, for the full course of treatment, cost around $300,000. This seems to be the upper limit in drug development, and insurance is willing to pay the price because one successful treatment will likely save them 10x that amount in the elimination of future care.
This is a recent (3/2/2017) article [1] on one such $300,000/year enzyme-based treatment for a rare disease which affects an estimated 5,000 to 10,000 people worldwide! Development of drugs for rare diseases has been a major problem for quite a while, with legislation on the matter dating back to 1983. However, it's apparent that it's still a problem.
And here is another article on yet another $300,000 treatment (see, there's that number again) to treat cystic fibrosis.
[1]: http://www.cnbc.com/2017/03/02/pompe-drug-lauded-by-trump-costs-300000-a-year.html http://www.cnbc.com/2017/03/02/pompe-drug-lauded-by-trump-co...
[2]: https://www.statnews.com/pharmalot/2016/09/19/sarepta-duchenne-drug-prices/ https://www.statnews.com/pharmalot/2016/09/19/sarepta-duchen...
- fellellor 9y agoI wonder how much of that is just the result of bureaucratic inefficiency. I'm sure if one looks deep enough and wide enough, that cost may be cut down by several orders of magnitude. Maybe not. However, no matter what the case, there may be no incentive to do so, for the people who are actually in a position to do such a thing.
- iplaw 9y agoI would have to say that not much is the result of pure bureaucratic inefficiency. The extensive clinical trials are there for a reason, and that is to prevent the release of thalidomide-like pharmaceuticals. Researching, developing, and vetting failed candidates is also a major cost that must be recouped via the drugs successfully brought to market. The actual costs associated with bureaucratic inefficiencies are nil in comparison. [1]: https://en.wikipedia.org/wiki/Cost_of_drug_development#Research_and_development https://en.wikipedia.org/wiki/Cost_of_drug_development#Resea...
- everybodyknows 9y agoAre FDA vetting standards really uniform across all drugs, from children's vaccines, to last-resort therapies for the terminally ill? The latter surely have little to lose in taking a risky drug -- if they can afford it.
- fellellor 9y agoI'm still not convinced.
- petra 9y ago>> The true cost of bringing a drug to market is 2.8B While it does makes sense that pharma r&d is expensive ,It's really hard to believe those numbers, specially that they always seem to change: first it was ~$700M/drug, than ~1.5B and now 2.8B ?
- mgoetzke 9y agoEspecially since most expenses are incurred in the marketing department.
- iplaw 9y agoIt varies greatly, and the figures generated by third party studies are almost always lower than the self-reported figures. This article [1] from 2012 reports per-drug pharmaceutical R&D spend ranging from $3.7B to $11.8B. It's not the most transparent cost analysis. [1]: https://www.forbes.com/sites/matthewherper/2012/02/10/the-truly-staggering-cost-of-inventing-new-drugs/#73acf67e4a94 https://www.forbes.com/sites/matthewherper/2012/02/10/the-tr...
- bzbarsky 9y agoDepending on what timeframe you're talking about for that change, the costs have in fact gone up, both because low-hanging fruit has been picked and because the regulatory regime has been changing over time to required more and more work to bring a drug to market.