Should drug innovation models remain as expensive as what these are claimed to be now by the global pharma industry, in general?
Finding a credible, appropriately quantifiable, and generally acceptable answer to this question is critical. It won’t, then, just be a myth-buster for billions of dollar price tag, that is now being attached to drug innovation and development initiatives, by the global pharma industry, as a justification for arbitrarily fixing high new drug prices. If the upcoming and new startups with frugal models for even high-tech drug innovation succeed with flying colors, the patients and the payers would also possibly breathe a huge sigh of relief, from the increasing burden of disease and the cost of medicines.
I believe, it would eventually happen, may not be overnight, but over a period of time. I shall discuss in this article about some bright sparks, already visible in that direction.
The facade of high cost of drug innovation:
At the very outset, to avoid any possibility of misunderstanding, let me confess up front, just as many others, I also strongly believe that drug innovation is extremely important. It needs to be encouraged, protected and rewarded reasonably.
That said, let me also give the right perspective of how the cost of ‘drug innovation’ is being often misused as a facade for keeping the drug prices high, if not exorbitant.
According to a contentious study of ‘Tufts University Center for the Study of Drug Development’, the total cost of innovation of a new drug and bringing it to market, has increased more than double from US$ 1.22 billion in 2003 to US$ 2.6 billion in 2014.
Despite these numbers being vehemently challenged in credible journals, many global pharma majors still keep justifying the high new drug prices on the same old pretext. As a diversionary tactic, they relentlessly argue that innovation has to be adequately rewarded to keep its wheels moving in perpetuity, though no one challenges this basic fact, not even remotely.
The moot questions:
The moot questions, therefore, are: how expensive is the drug innovation and how does the global drug industry establish its relationship with high new drug prices? The answers to these queries must be clear, specific, quantifiable and credible, and not ethereal, if not airy-fairy.
In this context, my article titled, “How Expensive Is Drug Innovation?” found an echo in a globally reputed journal. An analysis published in the BMJ in May 2016 titled, “Propaganda or the cost of innovation? Challenging the high price of new drugs”, expressed deep concern on the rising prices of new medicines. It reiterated that this trend is set to overwhelm health systems around the world.
The above BMJ article also put forth similar questions: “What does it really cost to bring a new medicine to the market, and do these costs justify the high price?”
The authors pointed out that the pharmaceutical market is not actually a “free market” based on supply and demand with minimal government intervention through taxes, subsidies, or regulation. On the contrary, the pharma market is highly manipulated, and not focused on achieving the best prices, or even fair prices for essential and life saving medicines.
No linear link between high drug price and innovation cost:
As I discussed this subject in my previous article titled, “Arbitrary Pricing of Essential Drugs Invites State Intervention”, it has been well established by now that there is no linear, or any relationship between high drug prices and cost of drug innovation. Since long, this argument is being misused just as a façade to keep the cost of medicines high, and making high profits even at the cost of lower sales volume.
The façade has started crumbling:
In India too, the pharma MNCs often use the same façade to keep the prices of also their branded generics much higher than the comparable formulations manufactured by larger domestic pharma manufacturers. However, the façade has started crumbling in many countries, across the world. This gradually increasing general realization is welcoming. .............
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