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Monday, 12 May 2014 08:00

Big Pharma Inflates Research Costs for New Cancer Drugs by a Factor of 10, Researchers Charge

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MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

acancerpill(Photo: erix!)Big Pharma regularly employs a frayed justification for expensive drugs, particularly for new specialty medications: Monumental research costs must be recouped through sales. In addition, the pharmaceutical industry employs a more emotionally compelling argument that verges on a threat: "If you want to live longer, we can't make a profit on disease-controlling medications unless you pay for us to recoup our development expenses."

In short, a person with a serious illness is confronted with a variation on "your money or your life." This is true even for people who have insurance, given growing copayment requirements on specialty medication. 

The May 2014 AARP Bulletin, however, contains a commentary that credibly debunks "the most famous industry-sponsored estimate ... that it costs on average $1.3 billion to develop a new drug and get it approved." The authors of the opinion piece, Donald W. Light and Hagop Kantarjian (both professors of medicine), particularly focus on cancer drugs. Light and Kantarjian charge that the development of a new cancer drug doesn't actually cost Big Pharma more than a billion dollars; the figure, they say, is closer to $125 million. 

Not only do the authors accuse Big Pharma of bilking cancer patients with "staggering" prices for medication, they also assert:

We find no credible evidence that the real research costs to major companies themselves for cancer research are higher than for developing other drugs. So why are cancer drug prices higher? We think pharmaceutical companies are price-gouging. Even worse, companies raise the prices on some of their older drugs by 20 to 25 percent a year. In the past decade, they have almost doubled their prices for cancer drugs.

That last accusation is rather alarming to those who are struggling to survive cancer but have limited means to pay their share of medication costs. Big Pharma, the professors assert, is doubling the price of older cancer drugs every few years or so.

Light and Kantarjian also maintain that Big Pharma knowingly puts new cancer drugs on the market - at high prices - that have little impact on longevity: 

The argument that companies are offering improved drugs for these higher prices is not true. Oncologists find that most new cancer drugs provide few clinical advantages over existing ones.  Only one of the 12 new cancer drugs approved in 2012 helps patients survive more than two months longer.

One of the primary factors also contributing to high medication costs - including for cancer drugs - is Big Pharma's lobbyists' success in prohibiting Medicare from negotiating pricing for pharmaceuticals when Medicare Part D was passed under President George W. Bush.

The Medicare Part D multi-billion dollar windfall for Big Pharma combined with the myth of high research costs that justify exorbitant prescription prices are further eroding our budgets and our health. 

For those facing serious illness, Big Pharma's strategies for revenue enhancement come down to a matter of life and death. 

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