The quest for the next blockbuster drug is a high-stakes game in the pharma industry. Two main paths lead to this coveted prize: internal R&D, the detailed but potentially rewarding journey of developing drugs from scratch, and acquisitions, the quicker but pricier route of buying into existing biotechs with promising pipelines. Which is the smarter bet? The answer, like most things in life, is that it depends.

The pharma industry is vital in the healthcare ecosystem, continuously striving to develop innovative drugs that can improve and save lives. Behind the scenes, a complex web of funding sources contributes to these groundbreaking medications’ research and development (R&D). One often debated aspect is the role of taxpayers in subsidizing drug development. In this blog post, we’ll delve into the intricacies of this issue to better understand the relationship between taxpayers and the pharma research landscape.

(STAT NEWS)

  • At the start and halfway points of each year, many pharmaceutical companies raise drug prices to bolster revenue and reportedly fund new research.
  • A new STAT analysis of mid-year price hikes has found that, despite these new requirements, drug prices are on the rise. Indeed, on July 1, drugmakers raised the wholesale price on over 123 drugs in what’s the largest number of mid-year price hikes since 2013.
  • The median price increase for these drugs was 3.4%, just above the one-year inflation rate of 3.2%. So, over half of these medications could potentially face rebates, including 10 Pfizer drugs whose prices increased by 10%, such as long-acting penicillin Bicillin and blood thinner Fragmin.

When rationalizing their lofty price tags, one of the most common reasons pharma companies cite is that a high price is needed to make good on the money invested in research and development. According to a study, the amount of money spent on research and development (R&D) for new pharmaceutical drugs doesn’t correlate with high prices for the medications.

Pharma companies are flush with cash and looking to make deals, but there are still a lot of small biotech companies that don’t have enough money to launch their products entirely. It seems that pharma is only interested in drugs that have the potential to sell hundreds of millions as opposed to small products that may only sell to a limited audience.