ICYMI: New study answers the age old question, “Does R&D really justify high drug costs?” (Spoiler alert: the answer is no.)

ICYMI – May 15, 2015

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The New England Journal of Medicine: “The $2.6 Billion Pill — Methodologic and Policy Considerations”

“Of course, it is extremely expensive and risky to develop a new medication…but as risky as drug development is, the pharmaceutical and biotech industries remain among the most profitable sectors of the U.S. economy and actually spend only a small fraction of their revenues on truly innovative research. Furthermore, some of the most important recent new medications were not developed by large drug manufacturers but were acquired through purchase of the biotech firms that discovered them. These, in turn, are often spinoffs based on the discoveries of NIH-funded university research laboratories. For example, Gilead Sciences did not invent its blockbuster treatment for hepatitis C, sofosbuvir (Sovaldi), which it priced at $1,000 per pill. Rather, it acquired the product from a small company founded by the drug’s inventor, a faculty member at Emory University, much of whose work on the usefulness of nucleoside viral inhibitors was federally funded. Gilead paid $11 billion in late 2011 for the rights to market Sovaldi, an amount it totally recouped in its first year of sales after approval of the drug in late 2013.”

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InsideHealthPolicy.com: “Pew Launches Specialty Rx Initiative; Congress Sidesteps Rx Spending“ (subscription required)

“Pew Charitable Trusts has launched an initiative on specialty drugs that includes work on policies to manage the often high prices of those medicines, said Allan Coukell, Pew’s director for health programs…

…Pew isn’t the first to start an initiative on specialty drugs. The National Coalition on Health Care launched the Campaign for Sustainable Rx Pricing last year, although not all NCHC members participate in that campaign. Coukell believes Pew has has a lot to offer the debate over how to sustain biomedical inventions because policy must be based on good data, and Pew has strong research capabilities.”