Pharma says high prices fund drug development —
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Posted On: 03/08/2017 4:53:48 PM
Pharma says high prices fund drug development — but this study finds otherwise.
For some companies, a top-selling product can generate as much in revenue as the company’s entire global research budget
U.S. drug prices, notoriously higher than those in in other countries, generate “substantially” more revenue for companies than their research-and-development costs, according to a new report published in the journal Health Affairs.
In 2015, higher U.S. prices generated $116 billion in revenue, compared with the $76 billion spent on R&D worldwide.
“This finding counters the claim that the higher prices paid by U.S. patients and taxpayers are necessary to fund research and development,” the Memorial Sloan Kettering Cancer Center researchers wrote. “Rather, there are billions of dollars left over even after worldwide research budgets are covered.”
Pharmaceutical manufacturers often defend the high, and growing, cost of their medications by pointing to the high levels of risk involved in drug development. A study by the Tufts Center for the Study of Drug Development, which is funded in part by industry, found that research-and-development costs on average $2.9 billion per new drug — a figure frequently invoked by drugmakers.
The report, published Tuesday, could be an important counterweight to those industry figures. President Donald Trump has criticized drug prices several times, saying on Tuesday that he was working on a new system to increase industry competition, but it’s unclear what his approach would be.
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For some companies, a top-selling product can generate as much in revenue as the company’s entire global research budget
U.S. drug prices, notoriously higher than those in in other countries, generate “substantially” more revenue for companies than their research-and-development costs, according to a new report published in the journal Health Affairs.
In 2015, higher U.S. prices generated $116 billion in revenue, compared with the $76 billion spent on R&D worldwide.
“This finding counters the claim that the higher prices paid by U.S. patients and taxpayers are necessary to fund research and development,” the Memorial Sloan Kettering Cancer Center researchers wrote. “Rather, there are billions of dollars left over even after worldwide research budgets are covered.”
Pharmaceutical manufacturers often defend the high, and growing, cost of their medications by pointing to the high levels of risk involved in drug development. A study by the Tufts Center for the Study of Drug Development, which is funded in part by industry, found that research-and-development costs on average $2.9 billion per new drug — a figure frequently invoked by drugmakers.
The report, published Tuesday, could be an important counterweight to those industry figures. President Donald Trump has criticized drug prices several times, saying on Tuesday that he was working on a new system to increase industry competition, but it’s unclear what his approach would be.
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