There is no evidence of an association between research and development costs and prices of prescription drugs

From JAMA: “[inlinetweet prefix=”” tweeter=”” suffix=””]Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices[/inlinetweet]; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear”. And I guess most pharma executives believe the market can bear a lot more.

[inlinetweet prefix=”” tweeter=”” suffix=””]High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers[/inlinetweet], combined with coverage requirements imposed on government-funded drug benefits.  However PhRMA, the propaganda arm of pharma companies would try and have the public believe that pharma needs higher prices for R&D.  Total bullshit.

Take the case of Humira. Humira is the best-selling prescription drug in the world. The price of Humira, [inlinetweet prefix=”” tweeter=”” suffix=””]an anti-inflammatory drug dispensed in an injectable pen, has risen from about $19,000 a year in 2012, to more than $38,000 today, per patient, after rebates, according to SSR Health, a research firm. That’s an increase of 100 percent.[/inlinetweet]  AbbVie, which was spun off from Abbott Laboratories in 2013, declined to comment.

[inlinetweet prefix=”” tweeter=”” suffix=””]The United States spends almost twice as much on health care, as a percentage of its economy,[/inlinetweet] as other advanced industrialized countries — totaling $3.3 trillion, or 17.9 percent of gross domestic product in 2016.  American personal health spending grew by about $930 billion between 1996 and 2013, from $1.2 trillion to $2.1 trillion (amounts adjusted for inflation).

The price of pharmaceutical products in the U.S. continues to skyrocket. Consider:

  • A new muscular dystrophy drug came on the market late last year for an eye-popping price of $300,000 annually.


  • In 2016, the FDA appproved Tecentriq, a new bladder cancer treatment that costs $12,500 a month, or $150,000 a year.
  • The cost of Bavencio, a new cancer drug that was approved in March, is about $156,000 a year per patient.
  • The cost of insulin tripled between 2002 and 2013, despite no notable changes in the formulation or manufacturing process.

Obviously the old joke holds true “why do drug companies raise prices? Because they can”.  It is, however, this author’s opinion that we are quickly reaching a tipping point. Democrats are likely to be take over control of Congress in the upcoming elections and probably will win the Presidency in 2020.  When that happens drug companies are going to be squarely in their sights, but hey, no problem, they’ll just lay off more people.