Everett Chiropractic Center Blog

May 15, 2014

Myth or Con?

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The recent AARP article on the high cost of cancer prescription drug research costs calls it a “Myth”. You decide.

Here are some excerpts

“Eleven of the 12 new cancer drugs approved in 2012 were priced above $100,000 annually, and a 20 to 30 percent copayment can make them unaffordable even for well-insured patients.” [No kidding! And people complain about the high cost of healthy choices.]

The article says that when asked, and when any answer at all is provided by the industry, the answers center around two things: the “high cost of research” and the “precious added benefits of curing or controlling cancer.” The article then goes on to say, “We find neither explanation plausible.”

“Only one of the 12 new cancer drugs approved in 2012 helps patients survive more than two months longer.” [And that’s a measure of progress. How the conversation of success is manipulated is a whole other story.]

Anyway, “cost also does not hold up.”

“Indeed, the actual dollars that companies have put into research from 1995 to 2010 have generated six times more revenue – a sign that they are charging too much for a little benefit.”

Industry sponsored estimates claim the costs of research and development are, on average, $1.3 Billion to develop a new drug and get it approved. “Half that estimate, however, is not research cost at all, but rather a high figure for profits that companies would have made if they had invested their research money in stocks and bonds instead.” It’s not real cost. By the time the article gets done dismantling the industries numbers, the net median cost is about $125 Million. “Overall, investment in basic research by pharmaceutical companies to discover new drugs is quite small – about one-sixth of overall company research costs and about 1.3 percent of revenues after deducting for taxpayer subsidies.”

“In the case of cancer drugs, company research costs are even lower, because most of the basic research and thousands of clinical trials are paid for by the National Cancer Institute and foundations. In sum, we find no credible evidence that the real research costs to major companies themselves for cancer research are higher than for developing other drugs.”

Yet…. “In the past decade, they have almost doubled their prices for cancer drugs.”

“We call this the ‘market spiral pricing strategy’ – continually raising prices across the whole market, regardless of value or cost.” “… No other industry raises prices on last year’s cars or cellphones.”

“Claims justifying the high price of cancer drugs don’t add up.” No kidding.

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