The argument? Drug pricing. Hal Pawluk at Tude put together this explanation on BlogCritics of why prescription pharmaceutical prices are so high. If it makes anyone feel better,in the version posted on his own site, he suggests getting back to more of a free-market in drugs.
If you believe that drug prices are so high because of R & D, Big Pharma has done their job. And they're going to be in your pocket for a long, long time.
MYTH: Drug prices need to be as high as they are to pay for research and development.
REALITY: Drug prices are as high as they are to support unconscionable profits, with much of the research paid for by taxpayers.The big claim by Big Pharma is that it costs $802 million to bring a new drug to market.
It's not true.
The drug industry figure comes from a Tufts University study released in late 2001. There are some major problems with the study (it affects your bank balance so it's worth paying attention):
1. The $802 million included $400 million that had nothing to do with bringing drugs to market. It was an estimate of how much the drug companies could have made by investing in some other way. This is an imaginary number that the drug companies do not pay.
After deduction: $402 million.2. The remaining $402 million included about $230 million for clinical trials, but many drugs are simply revamps of existing drugs so clinical trials are done on only about 29% of drugs. That cuts the figure to $67 million, and we can deduct another $163 million.
After deduction: $239 million.3. The US taxpayer pays for 34% of the remainder through a tax deduction drug companies take on R & D. I think encouraging R & D this way is good policy, but it does reduce the cost of bringing the drug to market by $81 million that's paid for by you and other taxpayers, not the drug companies.
After deduction: $158 million - $644 million less than Big Pharma claims.Multiplying the real cost by a factor of 5 is a lot of "shading," but even the last figure is still higher than the average cost to bring out a new drug: the study was limited to a number of drugs that were developed exclusively within the drug companies.
What's wrong with that?
This: the reality is that the majority of drugs are developed with government support, paid for by American taxpayers:
A National Institutes of Health (NIH) internal document, dated February 2000 and obtained by Public Citizen earlier this year, showed that all the top five selling drugs in 1995 received significant taxpayer backing in the discovery and development phases. Investigations by the Massachusetts Institute of Technology and The Boston Globe also have examined samples of medically important and top-selling drugs and found that a vast majority of drugs in each group received government support. [True Figure of R&D Costs Likely Is 75 Percent Lower]
The explanation for this situation may be grounded in the fact that the Tufts Center for the Study of Drug Development gets 65% of their research funding from drug companies.
So when you hear spokesmen like Dr. Mark B. McClellan, commissioner of the Food & Drug Administration [yeah, I know - he's supposed to be working for us], claim that "the US is is paying the lion's share of the cost of developing drugs" you can believe him.
But remember that we're paying twice: once in government-funded research, and again in drug prices that are much, much higher than in other developed nations.
That's where those "unconscionable profits" come from.