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Re: E-DRUG: Costs of developing drugs

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E-DRUG: Costs of developing drugs

Jamie talk to me about this.

Joel Lexchin wrote:

> *******************************************
> E-DRUG: Costs of developing drugs
>
> A couple of points of clarification here.  First the figures that drug
> companies quote cover only a subset of all the new drugs that are
> introduced.  The current figure of about $500 million is based on research
> done in the early 1990s.  The drugs that were considered were ones that
> were developed entirely in-house by American owned companies.  Therefore,
> it excludes drugs developed by European, Japanese, etc. companies; drugs
> that were "licensed in" from other companies (about 40% of drugs introduced
> by American companies are licensed in from other companies); drugs that are
> developed in conjunction with universities, hospitals, government
> laboratories, etc.; and drugs that are not NCEs (new chemical entities)
> e.g. different formulations of existing drugs.  Furthermore, this figure
> does not take into account tax writeoffs for doing research.  Here in
> Canada these writeoffs mean that about 40% of pharmaceutical R&D is
> financed through public money because of foregone income tax revenue.
>
> David Henry is quite right when he says that the amount that we pay for new
> drugs should be linked to their benefit to society rather than on the basis
> of what it costs to develop them.  My concern here is that the
> pharmacoeconomic studies that we (Australia, Ontario, British Columbia) are
> using to assess benefit are largely being done by the drug companies.  In
> fact, some companies are helping to finance an institute for
> pharmacoeconomics in the province of Alberta.  Why?  Bob Evans, a well
> known health care economist had a good answer. In an editorial in the
> Annals of Internal Medicine, (Manufacturing consensus, marketing truth:
> guidelines for economic evaluation,  Annals of Internal Medicine, 123
> (1995) 59-60) he observed that industry interest in pharmacoeconomics
> reflects the move in decisions over drug purchasing from individual
> physicians to health care plan managers.  Marketing strategies directed at
> physicians are no longer adequate to move the product and hence the
> pharmacoeconomic study.  Pharmacoeconomics therefore, from the industry
> point of view, becomes another marketing tool.
>
> [Moderators Comment: Would this be a bad thing if drug industry reps used
> pharmacoeconoimic arguments to promote their products? I think not. I would
> be far more impressed with a case that their drug was more cost effective
> than existing drugs, particularly if the data was provided and the
> assumptions defined. Richard Laing Co-Moderator]

John Richard 
jrichard@essential.org

[Moderators Comment: I am sure that we are all waiting to hear what Jamie
Love has to say about this debate! Richard Laing Co-Moderator] 

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