The average cost to develop new drugs and other health news of the week

The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion.  Adjusting those estimates for current failure rates results in an estimate of $4 billion in research dollars spent for every drug that is approved.  However when divided (each drug company’s R&D budget by the average number of drugs approved) the dollars were far more dramatic.

The high cost of developing drugs shouldn’t be a badge of honor for drug firms; there’s no reason it has to be this expensive. And using the the cost of research to justify the prices of prescription drugs was always a dumb move on the pharmaceutical industry’s part. Just because something was expensive doesn’t make it good. And another: many medicines are over-priced, but high-cost drugs are only a small part of our general health cost problem. Medicines are just among the easiest products to scapegoat because their prices are easier to track.

The Food and Drug Administration issued draft rules that will open the U.S. marketplace to “biosimilars” — essentially generic versions of medications made with living, often bioengineered, organisms.

The FDA’s actions Thursday promised U.S. consumers the prospect of big savings and some uncertainty too, as generic drug manufacturers and biotechnology firms — many of them outside of the United States — begin to make and market these complex medications.

Lawmakers who drafted the measure were told that opening this specialty-drug market to new manufacturers could drive down prices for such widely-used medications as insulin, anti-retroviral drugs, interferon, infertility medications and certain cancer therapies by 25% to 45%, slashing the nation’s healthcare spending by $25 billion over 10 years.

But whether these less-expensive biosimilars will work as well as the brand-name drugs they mimic is not a simple matter. These medications result when living organisms are genetically engineered to produce specialized proteins that in turn have a cascade of complex effects inside the body.

A majority of web sites selling cholesterol pills lacked information about contraindications, key warnings and side effects. Moreover, risk information was presented in a “chaotic” fashion and one-third failed to describe side effects in layman’s language.

Specifically, general contraindications were missing in 92 percent and info about contraindicated medicines was absent in 47.3 percent. Warnings about symptoms associated with myopathy, liver disease, hypersensitivity and pancreatitis were absent in 37 percent; 48 percent; 91 percent, and 96 percent, respectively. Only 7 percent listed side effects compatible with current prescribing info.

Thanks to greater use of generic drugs, the financial burden of prescription costs has become less of an issue for families in the United States, according to a new study by the RAND Corporation.

The study shows that the number of Americans living in a family that spent more than 10 percent of its income out of pocket on prescription drugs decreased from 2003 to 2008. The decrease in costs to families is in contrast to the preceding five-year period, from 1999 to 2003, when drug costs rose year after year and were a financial burden for an increasing number of families.

Thoughts….

The ePharma conference this week has some very good insights but let’s face it insights without action are meaningless.   You could almost go back to the conference summary from last year and see some of the same insights but the pace of marketing innovation at big pharma is painfully slow.

There are some drug companies that are beginning to experiment with more digital marketing, including social media, but why they aren’t approaching digital marketing with more research and strategy is beyond me.  The game on drug development from BI is a perfect example, I mean what is the objective of this game ?

If you watch TV and the evening news broadcasts you’re seeing less DTC ads because most likely budgets have been cuts and more executives are finally coming to the realization that TV ads are not as effective as driving new Rx’s.  What is really frustrating for a lot of us is that we know the Internet is more effective in driving new Rx’s  but the Internet requires the same amount of research as any DTC marketing to be effective.