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Tuesday, December 09, 2003

Posted by Jake
Economist.com | The drugs industry

The industry's bloated overheads appear to be driving its decisions on the sort of drugs it seeks to develop. Like a supermodel who will not get out of bed for less than $10,000 a day, Big Pharma has decided that it is simply not worth investing in anything but a blockbuster. This means that lesser, albeit interesting, compounds fall by the wayside. An oft-quoted figure from the Tufts Centre for the Study of Drug Development puts the average cost of bringing a new drug to market at $897m.


This problem with drugs costing so much to research has huge public policy consequences in the realm of prescription drug prices. The debate over whether we should allow reimportation of prescription drugs from Canada is as much about the economics of how drug companies make there money as it is about health care policy.

I don't have a lot of sympathy for people who simply believe that drugs should appear by spontaneous generation at zero overhead cost. On the other hand, this article would suggest that Big Pharma has been real lazy about chasing down newer and better drugs and definitely needs to find a cheaper way to do research.

What is the solution here?

Part of it, I think, is related to a talk that I heard here. The speaker was arguing for bioinformatics and systems biology techniques that emphasize groups of molecules that put cells into a particular physiological state. He believe that this will allow drug target molecules to be indentified much more rapidly and cheaply.

Hopefully, if the drug companies could retool the way they do research as this article suggests, we might be able to sidestep price controls.


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