For those of us who love reading about big pharma expenditures, a new Forbes analysis:

There’s one factor that, as much as anything else, determines how many medicines are invented, what diseases they treat, and, to an extent, what price patients must pay for them: the cost of inventing and developing a new drug, a cost driven by the uncomfortable fact than 95% of the experimental medicines that are studied in humans fail to be both effective and safe.

A new analysis conducted at Forbes puts grim numbers on these costs. A company hoping to get a single drug to market can expect to have spent $350 million before the medicine is available for sale. In part because so many drugs fail, large pharmaceutical companies that are working on dozens of drug projects at once spend $5 billion per new medicine.

http://onforb.es/14JGaPq

I cannot for the life of me figure out what makes the cost so exorbitant. Is it the salaries of those highly educated researchers? Is it some malpractice insurance?

At $5 billion, we will never see a cure in my lifetime!
Peggy

Thanks for posting the link to the article. The comments made to the article are worth reading also.

I think care is needed in discussing this. For instance, companies with no new drugs are excluded. Their costs need to be taken into account - leading to an increase in, mainly, the 1 drug companies' costs.

I doubt if we are comparing like with like. I suspect that large companies are more likely to go for the blockbuster drugs that cost more to research.

Either way, the numbers are scary. Taking up something that Peggy said, what worries me more than not seeing a cure in my lifetime, is seeing a cure I can't afford.

Something has to give. I suggest turning the thing on its head using clinical trials based on the individual, with a need to prove no harm, rather than efficacy. See:

http://neurotalk.psychcentral.com/thread191454.html

John

Yes, the costs are ridiculously high, but it's not really $5 billion for a new drug. The average for a new drug was $350 million (still crazy high). The $5 billion figure comes from all of the failures added in. So, the average R&D expenditure per new drug approval is $5 billion. Unfortunately, only about 5% of experimental drugs end up successfully completing all phases of research to get approved for actual sale and use.

I recall Marcia Angell exposing one of the accounting practices of the pharmaceutical industry in pricing costs of new drugs--the loss of potential income from alternative investment, thus "tying up" revenue for research and development of a drug was factored into the equation. That number was found by Dr. Angell to be quite considerable.

These 2 articles read like PR material from the Pharmaceutical industry. Their bottom lines belie the message in these articles--ie the industry will soon have to cease their "real" work if costs do not come down.
Really--has anyone looked at the profits from drugs?

Interesting and illuminating articles titled "Institutional Corruption & Pharmaceutical Policy"

http://www.ethics.harvard.edu/lab/fe...me-symposium--

Big Pharma expenditures are generally in this ballpark:

25% profit

25% marketing

25% making pills and running the company

15% Research

The rest covers:

- the $30 billion in fines for criminal actions, felony and fraud since 1992

- out-of-court settlements with people harmed by their drugs

- according to M.A. Gagnon and J. Lexchin (PLOS 5, No.1) “in the United States, the pharmaceutical industry spends up to $42 billion in promotion towards physicians every year, which is, on average, $61,000 per physician per year to influence their prescribing habits and generate profits.”

- paying patient advocacy groups and increasing numbers of paid internet posters. But maybe that is covered in the marketing budget.

The cost of the actual research is not where the action is.