KEY TAKEAWAY: While the media is focusing on the prices of prescription drugs what is not being discussed is that insurers almost never pay wholesale price for any drug. In addition, it’s estimated that clinical trial costs, per patient, are over $100,000.
The media is good at fanning the flames of discontent around high drug prices and in cases of products like the EpiPen and insulin, they are right. However, if we really want to address the rising costs of new drugs we have to take another look at the cumbersome process in the way drugs are developed.
In an era of new informational communication processes the FDA should be going back to the drawing board on drug development with two key objectives. First, they should look to ensure that new drug efficacy is measurable and clearly demonstrated without requiring a higher number of clinical trials, which increases costs. Second, they need to work with the drug industry to reduce the costs of drug development. How, for example, can we reduce the per patient cost of clinical trial patients?
Now keep in mind that corporate greed is a huge part of the problem. The price increases of the EpiPen are directly tied to executive compensation and profits. The high cost of insulin, which has been skyrocketing, costs more, per year, than mortgage payments. Gilead did not spend one dime on R&D for their HIV drug, they bought it and payed money to commercialize it. In these cases the backlash against high drug prices are justified.
The backlash against pharma and high drug prices is not going to go away anytime soon. Pharma’s trying to fight the tide with facts around the cost of drug development, but in an era when only 4 in ten believe the media it’s falling on deaf ears. Transparency is needed but what the industry really needs is more CEO’s who are focused on patients and less on their paychecks and Wall Street.