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Speed Review: The $800 Million Pill

Speed Review: The $800 Million Pill

Speed Review: The $800 Million Pill

The Truth Behind the Cost of New Drugs

by Merrill Goozner

According to pharmaceutical industry officials and a frequently cited study from Tufts University, it costs more than $800 million to discover a new drug. The drug companies explain that they have to put a high price on yesterday’s discoveries if they are going to conduct the research that is required to develop the next generation of wonder drugs.Others disagree. In The $800 Million Pill, former chief economics correspondent for the Chicago Tribune Merrill Goozner challenges the assertion that the pharmaceutical industry can produce life-saving drugs only if the American people continue to pay high prices for drugs.

Review

A New Look at the Cost of New Drugs
According to pharmaceutical industry officials and a frequently cited study from Tufts University, it costs more than $800 million to discover a new drug. The drug companies explain that they have to put a high price on yesterday's discoveries if they are going to conduct the research that is required to develop the next generation of wonder drugs.

Others disagree. A former chief economics correspondent for the Chicago Tribune, Merrill Goozner, challenges the assertion that the pharmaceutical industry can produce life-saving drugs only if the American people continue to pay high prices for drugs. He does this by asking: "Where do new drugs come from?" and "What do they really cost to invent?"

A Different Perspective
To answer these questions, Goozner investigates the process of drug development for a representative sample of relatively recent discoveries - from their beginnings in academic and government labs to their final approval by the Food and Drug Administration. By taking a close look at the entire process of drug development, Goozner offers a perspective on drug prices that differs with that presented by others, including drug industry officials.

Throughout The $800 Million Pill, Goozner contends that American taxpayers are paying for high-priced drugs twice: once when they support government-funded research with their tax dollars, and again when they pay high prices for prescription drugs. Through case studies that include a number of familiar drugs and pharmaceutical companies, Goozner shows readers that most of the important drugs of the past few decades came about from research at taxpayer-funded universities and the National Institutes of Health. Goozner writes that pharmaceutical companies often step in to reap the profits once the innovation work of others is over.

Goozner also emphasizes in The $800 Million Pill that drug innovation is often driven by individual scientists who have dedicated their lives to finding cures for deadly diseases, and not the pharmaceutical companies.

To highlight the important work that is being done by university scientists, Goozner describes several, including biochemist Eugene Goldwasser, who spent two decades finding a single blood protein that would become the most profitable biotech drug in the world.

How realistic is Tufts University's $800 million price tag for a new life-saving drug? Goozner reports that the Global Alliance for TB Drug Development, funded by the Rockefeller Foundation and the Bill and Melinda Gates Foundation, commissioned a team of former drug company executives to build their own model of what it costs to develop new drugs. He cites their October 2001 report, "The Economics of TB Drug Development," which directly challenges the Tufts study. Although the Global Alliance's research methodology was very similar to the Tufts study, Goozner reports that its bottom line was very different.

"The total costs to discover and develop a new anti-TB drug is roughly estimated to range from $115 million to $240 million. However, it is generally accepted that discovery and development of a new drug to treat TB will require an international, collaborative effort that allows costs to be shared by multiple organizations, lowering ultimately the investment burden borne by a single agency or company," the report said.

Goozner believes that if the industry-funded academic economists at Tufts had factored out the half of industry research that he categorizes as corporate waste - such as the clinical trials whose only purpose, he says, is to get doctors to prescribe their medicine instead of someone else's - their number would have been similar to that of the Global Alliance.

‘Not Worth the Cost'
Goozner concludes, "If the pharmaceutical industry continues to insist on double-digit revenue and profit growth year after year in the name of going after the 150th blood pressure control drug or the 20th pain medication, then the public can assert with some confidence through the legislative process that that kind of innovation is not worth the cost."

Why We Like This Book
The $800 Million Pill
presents an alternative perspective of an industry that plays a vital role in many people's lives, and provides additional food for thought on the drug prices that many consumers must pay. By breaking down the numbers and using new studies that challenge the costs involved in their development, Goozner offers information that is both timely and relevant for those who rely on medications for survival as well as those who are concerned about their prices.