The pharmaceutical industry is breaking its promise to the American public. People in the United States pay far more for prescription drugs than people anywhere else in the world. Drug companies vowed to use the proceeds from pricey prescription drugs to develop wonderful new medicines to cure devastating diseases. But Big Pharma is not delivering.
Over the last 30 years drug prices have skyrocketed, far outstripping inflation. In some cases the increase has been astronomical.
In 1975 the blood thinner Coumadin (warfarin) cost $9.40 for 100 pills. Thirty years later the same prescription had zoomed to $133.49. The anti-anxiety agent Valium (diazepam) went from $8.99 per 100 tablets in 1975 to $217.74 in 2007.
Both Coumadin and Valium have been on the market for decades. Newer drugs such as the cholesterol-lowering drug Lipitor could cost $128 for a month’s supply. Enbrel for rheumatoid arthritis or psoriasis can cost as much as $1400 for one month of treatment.
Pharmaceutical companies justify such high prices on the grounds that they help pay for the drugs of tomorrow. Research and development is extremely expensive. A company may have to test up to 10,000 compounds to find just one new drug that it can take to market.
But that’s not the whole story. The pharmaceutical industry has historically been one of the most profitable sectors of the economy.
Shareholders expect double-digit profits. That’s why the markup on prescription drugs is so high.
A tablet that costs a few pennies to make is frequently sold for more than a dollar. If your computer were priced on the same principle, it would cost tens of thousands of dollars.
With such profits, it would be reasonable to expect lots of breakthroughs from the pharmaceutical industry. Instead, companies have little to show for the billions they have invested in research and development.
Last year only a handful of new compounds (18) were approved by the FDA, and many were just variations of existing drugs. In 1996, the agency approved more than 50 new medications.
In response to shrinking pipelines, many major drug companies are laying off employees. Pfizer has cut 2,100 people from its research labs and Bristol-Myers Squibb is planning to send out 4,300 pink slips.
What happened to the promise of breakthroughs against Alzheimer’s disease, mental illness or cancer? There have been some interesting new compounds developed for rare cancers like chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST).
Unfortunately, these drugs are unaffordable for most people. Gleevec, the breakthrough for CML and GIST, can cost more than $3,000 a month. Other new cancer treatments such as Revlimid for multiple myeloma can cost more than $6,000 a month.
Even such expensive advances are few and far between. We still lack cures for big killers like lung, pancreatic or prostate cancer.
If the pharmaceutical industry cannot deliver on its promise of breakthrough drugs, Americans will be reluctant to keep paying such high prices for prescription medicines. Perhaps the industry should consider spending less money on marketing, lobbying and television commercials and find better ways to develop innovative drugs.
