PHM-Exch> The high price of medicines

[Claudio Schuftan]

From: Beverley Snell <beverleyfsnell at gmail.com>

The whole story on this from the New York Review of Books is attached.
It discusses the exorbitant price of new drugs and highlights some of the
recent examples such as EpiPen, the Daraprim (pyramethaprim) case, cancer
drugs etc.

The following comments from the-drug archives are relevant:
from Joel Lexchin in 2012
http://lists.healthnet.org/archive/html/e-drug/2012-03/msg00035.html

 Cost of R&D for new medicines
------------------------------------------------------------
First, it’s been pretty well established that for most drugs the cost of
the R&D has nothing to do with the price that companies charge. While there
is some variation in the R&D costs for different types of drugs this
variation is much smaller than the variation in the selling price. Selling
price is based on what the companies think that the market will pay. That’s
why a new NSAID will sell for a few dollars a pill and a new cancer drug
for thousands of dollars per pill.

There is no legal obligation for companies to disclose the R&D costs for
individual drugs. They will often announce how much they are spending on
R&D overall in their annual reports but there are a number of caveats to
these figures. First, they depend on what is considered R&D and second they
don’t take into account the tax breaks that are often offered to companies
to do R&D in certain locations. So you can get the companies version of
what they spend on R&D from publications such as the PhRMA or EFPIA annual
reports. If you want to see what’s being spent in the US you can look at
the annual publication from the National Science Foundation and in Canada
from the annual reports of the Patented Medicine Prices Review Board.
Interpreting what these figures mean is much harder.
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