Cancer Drugs Prices

To most of us it’s hardly surprising!! A new analysis found that the claim by drug companies justifying the high price of drugs by the expenses of research and development cannot be proven. In an article published in JAMA Internal Medicine, the researchers found that the cost of developing a new drug is around $650 million. The drug companies put that cost at $ 2.7 billion or several times the actual cost established by the researchers. On top of the $650 million the researchers add another $100 million to cover the cost of what the companies would have gained by investing the money instead of using it in R and D.  Of the 10 companies the researchers looked at, the drugs earned 7 times what they cost to be brought to market and of course the profits will continue in the years to come. One argument the pharmaceutical companies make is that for each drug that succeeds, there are those that fail. The new study says they took this into account.  The drug companies also claim that their costs are much more complex than those claimed by the analysis. To that the 2 researchers respond that drug companies are opaque about their costs and need to be more transparent. JAMA Internal Medicine invited Merrill Goozner, editor emeritus of the magazine Modern Healthcare, for a comment. He writes that pharmaceutical companies have higher profit margins than any other US industries. He argues that the patent protections far outweigh the risk of developing new drugs. He agrees with the study’s authors that “Policy makers can safely take steps to rein in prices without fear of jeopardizing innovation.” That puts it succinctly, and whether or not our policy makers choose to do something about drug prices, we need to remember that thought.