The Cost Of Creating A New Drug Now $5 Billion

[Threegoofs]

Interesting article from Forbes:

The Cost Of Creating A New Drug Now $5 Billion, Pushing Big Pharma To Change - Forbes

Having been involved in some really, really expensive drug failures in the past (some deservedly so, some probably decent candidates that got bounced by a wary FDA), I can see where the costs of these medications is so high. The amount of work that is done on each new drug is amazing - massive trials before it goes to the FDA for approval, multiple drug failures through every step of the process, careful attention paid to things no one ever cared about 30 years ago - yet old drugs on the market have never been examined for similar things.... and to top it off tremendous pricing pressure from health care plans, national pricing plans and very safe and effective generic drugs makes me wonder if we will have much true innovation in the future surrounding new medicine. Five billion a compound isnt sustainable, unless every drug you come up with is a blockbuster.

That being said, the ACA is really going to focus drug development in the future to only innovative drugs. The me-too compounds are a thing of the past - why invest big money on a drug with little differentiation when you will be forced to do comparative research with the PPACA? Pharma will also have less sales and marketing spending, since health care plans will be controlling the drugs used, rather than individual physicians. Overall, this is a good thing.

 

[Fisher]

It may be good for the medical world, but no so much for consumers. I hear the old hens cackling about Medicare D all the time. I was taking Pill X which is a combination of Medicines Y & Z in a single pill. My doctor decided that the Z wasn't necessary and was causing me problems so he prescribed me Pill X1, which is just the Y without the Z, but I cannot afford it because Pill X is covered and only costs me $12 a month and Pill X1 is not and will cost me $250 a month.

 

[GottaGo]

99 Year patents on Brand Name drugs, preventing them coming to the generic markets are a serious problem in keeping the cost of pharmacueticals affordable.

Patenting naturally occurring substances (not the process of collecting the substance, but the substances themselves) is another method of locking down access.

 

[CalGun]

And this simply means drugs with out the potential for $10 billion in sales will be dismissed.

 

[Captain Adverse]

I don't buy this whole propaganda piece. In the first place it is about an estimate done taking numbers provided by companies, not an accurate assessment done by an independent accounting firm. In the second place it does not take into account "failures" which somehow still get marketed as having some stupid use. Anybody recall the drug advertised to help "restless leg syndrome?" A drug used to stop moving your leg when you sleep...geez!

Then there are these points admitted by the article itself:

Some caveats, though: drug companies have tax incentives to count costs in research and development, which could inflate the figure; they also are likely to spend extra money in order to get those medicines approved in other countries. Even more important is the fact that some R&D costs come from monitoring the safety of medicines after they become hits to monitor reports of side effects. “Our safety infrastructure is close to 1,000 people,” says Paul Stoffels, the co-chairman of pharmaceuticals at Johnson & Johnson, which had the most new drugs approved and spent $5.2 billion per drug. “That is a whole biotech company and it is also part of our R&D budgets.”

This article is just a piece designed to justify the massive costs to the consumer of patented drugs. Now we also know why the only disease ever "cured" around the world was Smallpox. Can't profit if you can't keep treating a disease.

 

[Threegoofs]

99 Year patents on Brand Name drugs, preventing them coming to the generic markets are a serious problem in keeping the cost of pharmacueticals affordable.

Patenting naturally occurring substances (not the process of collecting the substance, but the substances themselves) is another method of locking down access.

Well, you'll be happy to know your serious problem doesnt exist. There are no 99 year patents. Patent life runs about 17 years, depending on lots of factors.

And you cant patent naturally occuring substances. You could, I suppose, patent their use, but that wouldnt be too helpful, as noted in the case of fish oils - patented as Lovaza by GSK. That is useful since you know what you are getting, vs health food stores.

 

[MaggieD]

That being said, the ACA is really going to focus drug development in the future to only innovative drugs. The me-too compounds are a thing of the past - why invest big money on a drug with little differentiation when you will be forced to do comparative research with the PPACA? Pharma will also have less sales and marketing spending, since health care plans will be controlling the drugs used, rather than individual physicians. Overall, this is a good thing.

I agree with this. It's my understanding that a drug company, when they're about to lose their protection from generics, will "come up with a new drug similar" to which Tylenol has been added. New protection!! Then their sales people encourage doctors to prescribe this new drug instead of the old one where a generic could be used.

Follow the money folks.

 

[Threegoofs]

I don't buy this whole propaganda piece. In the first place it is about an estimate done taking numbers provided by companies, not an accurate assessment done by an independent accounting firm. In the second place it does not take into account "failures" which somehoe still get marketed. Anybody recall the drug advertised to help "restless leg syndrome?" A drug used to stop moving your leg when you sleep...geez!

Then there are these points admitted by the article itself:



This article is just a piece designed to justify the massive costs to the consumer of patented drugs. Now we also know why the only disease ever "cured" around the world was Smallpox. Can't profit if you can't keep treating a disease.

Interesting. Do you think "restless leg syndrome" doesnt exist? Because I recall 30 years ago using OTC quinine for patients, although it didnt seem to work. But the disorder certainly was there well before the drug was developed.

I dont see why safety and regulatory people shoudlnt count as R and D. After all, the analysis after the drug is on the market certainly counts as development, doesnt it? And reacting to potiential safety issues by running studies, confirming or disproving potential drug interactions is definitely on the research end.

The other point about R and D research is that it isnt a great thing for companies to overrreport it. The IRS has limitations, obviously, and investors hate large R and D spend (especialy with no return) since it means someone else is going to make money down the road instead of marketing spend, which should translate into short term dollars. I think the numbers for R and D spend are probably pretty decent - even if you think they are doubly inflated, thats still $2.5B per new drug.

 

[Threegoofs]

I agree with this. It's my understanding that a drug company, when they're about to lose their protection from generics, will "come up with a new drug similar" to which Tylenol has been added. New protection!! Then their sales people encourage doctors to prescribe this new drug instead of the old one where a generic could be used.

Follow the money folks.

Right. And the ACA, and health care plans, are really discouraging this type of tactic. You wont be seeing this too much anymore.

 

[Threegoofs]

And this simply means drugs with out the potential for $10 billion in sales will be dismissed.

The problem is, its really tough to figure that out before the Phase 3 trials are done, and by then you already spent most of the money....

 

[GottaGo]

Well, you'll be happy to know your serious problem doesnt exist. There are no 99 year patents. Patent life runs about 17 years, depending on lots of factors.

And you cant patent naturally occuring substances. You could, I suppose, patent their use, but that wouldnt be too helpful, as noted in the case of fish oils - patented as Lovaza by GSK. That is useful since you know what you are getting, vs health food stores.

A 20 year patent is very serious for those who cannot afford name brand drugs, and extensions can be made.

I was being facetious on the 99 years, as it may as well be that long since 20 years can mean the life span of some.

 

[Threegoofs]

A 20 year patent is very serious for those who cannot afford name brand drugs, and extensions can be made.

I was being facetious on the 99 years, as it may as well be that long since 20 years can mean the life span of some.

Well, its usualy shorter than 17 years, since the patent clock starts running before the drug hits the market.


But the point here is that the drugs end up being expensive BECAUSE they cost so much to make and there is such a short window between time to market and patent expiration.

 

[Manc Skipper]

Big Pharma spends more on promotion than it does on research and development.

 

[Captain Adverse]

Interesting. Do you think "restless leg syndrome" doesnt exist? Because I recall 30 years ago using OTC quinine for patients, although it didnt seem to work. But the disorder certainly was there well before the drug was developed.

I dont see why safety and regulatory people shoudlnt count as R and D. After all, the analysis after the drug is on the market certainly counts as development, doesnt it? And reacting to potiential safety issues by running studies, confirming or disproving potential drug interactions is definitely on the research end.

The other point about R and D research is that it isnt a great thing for companies to overrreport it. The IRS has limitations, obviously, and investors hate large R and D spend (especialy with no return) since it means someone else is going to make money down the road instead of marketing spend, which should translate into short term dollars. I think the numbers for R and D spend are probably pretty decent - even if you think they are doubly inflated, thats still $2.5B per new drug.

Before I respond I am curious about your level of personal expertise. You are apparently a medical practitioner because you used the term "prescribed" when discussing quinine and it's possible application to restless leg syndrome. Are you a medical doctor? I'm curious because the term "prescribed" can also be used by Physician Assistants, Nurse Practitioners, and military Medics.

Beyond that, I would also like to know if you are involved in the research & development process of drugs. Whether or not you have personal knowledge and expertise in this area of discussion.

I am always willing to bow to superior knowledge, although under the caveat that there are "bad" doctors as well as "good" ones.

 

[Threegoofs]

Before I respond I am curious about your level of personal expertise. You are apparently a medical practitioner because you used the term "prescribed" when discussing quinine and it's possible application to restless leg syndrome. Are you a medical doctor? I'm curious because the term "prescribed" can also be used by Physician Assistants, Nurse Practitioners, and military Medics.

Beyond that, I would also like to know if you are involved in the research & development process of drugs. Whether or not you have personal knowledge and expertise in this area of discussion.

I am always willing to bow to superior knowledge, although under the caveat that there are "bad" doctors as well as "good" ones.

Yep. Clinical pharmacist by training, now involved in drug development.

 

[Captain Adverse]

Yep. Clinical pharmacist by training, now involved in drug development.

Okay. I won't dismiss anything you say out of hand, and I'll always credit your greater insider knowledge. However, since you are an "interested party" I hope you will forgive me if I sometimes respond with scepticism regarding the possible bias of your positions on the subject.

 

[Threegoofs]

Okay. I won't dismiss anything you say out of hand, and I'll always credit your greater insider knowledge. However, since you are an "interested party" I hope you will forgive me if I sometimes respond with scepticism regarding the possible bias of your positions on the subject.

As you should. I am acutely aware of my own biases.

 

[Neomalthusian]

Medicare D needs to be abolished immediately.

 

[Stewart]

Medicare D needs to be abolished immediately.

Medicare needs to be abolished.

But good luck with that.

 

[Threegoofs]

Medicare needs to be abolished.

But good luck with that.

Maybe just abolish health care entirely.

We could save so much money, and think of the freedom of avoiding being around sick people!

 

[Stewart]

I am a friend of UHC, sir. I am no friend of medicare in its current guise. It simply must go.

 

[Deuce]

Big Pharma spends more on promotion than it does on research and development.

They also have a habit of lumping marketing costs into the R&D to inflate those numbers.