drug development

Pharmaceutical Companies Cost to Develop Patented Drugs

The government for years, has been all about trying to get the top pharmaceutical companies to price their brand-name medicines low enough that more people might be able to afford them. They thought that giving the big companies only a short period of exclusivity on their patents could help; but it didn’t. They tried to negotiate for discounts for the prices of the medicines that senior citizens got through Medicare, but they failed again. The pharmaceutical lobby is a well-heeled one and they always do what they can to defeat anything the government may try to help the average person afford the prices of important drugs. After all, what the government is trying to do could seriously cut down the profits top pharmaceutical companies make – by something like half.

drug companyThe companies try to justify their huge profits with one claim all the time – that they need to be able to fund all the high-tech drug research that they do. Most people tend usually to buy this defense more or less. Except that there is always a little voice in their heads that always says that there is something wrong with this whole picture. As it turns out, they’re right.

So by how much do the top pharmaceutical companies exaggerate their expenses in bringing a new drug to market? A video on the Phrma industry website states that it costs $1 billion to take a chemical compound and turn it into a proper drug. Skeptical studies though find that it takes less than $60 million. That’s quite a stretch – from 60 to 1000 million.

pharma companySo how exactly did that argument about research costs that we have been hearing from the top pharmaceutical companies for about 50 years now even come about in the first place? There are all kinds of “studies” that the top pharmaceutical companies fund on their own coin for some help throwing numbers in your faces. For instance, they funded a study by the Tufts Center. Tufts were grateful enough for the funding and came out with that really wild scientific estimate that it cost $1 billion to bring a drug to market. They say that they looked to see what it cost Pharma companies to bring each one of dozens of drugs to market.

The truth is, that the top pharmaceutical companies don’t spend much on drug development. It’s the government that does; it funds research at government and university labs. Whatever they do spend on research, the pharma companies get tax breaks for – they get such a huge tax break, their costs are cut down by 40%. How about the costs of getting government approval for a drug? The top pharmaceutical companies claim that it takes them 7 1/2 years of clinical trials to get a drug to market; the truth is closer to four years. Anyway, all of this is for the really complex top shelf drugs. For the other simpler ones, the costs are going to be quite low.

And here you are wondering why your medical insurance bills are so high. When everyone involved tries to brush you off telling you that it’s all so technical that you will never understand it, they get to inflate the price of every cotton ball they use.

Posted by doctor in Drug Development