New Study Shows That High R&D Costs Don’t Explain High Drug Prices
upstart writes:
New Study Shows That High R&D Costs Don't Explain High Drug Prices:
For years, defenders of pharma patents loved to claim that the reason that they needed patents and the reason they had to charge extortionate rates for drugs was because of the high cost of R&D for new drugs. The numbers keep going up. [...] The latest I've heard them claiming is an average of $1.5 billion per new drug.
The number has always been bunk. [...]
Anyway, given all that, there's a new study out that [...] compared drug prices with the price of R&D on those drugs. If the high cost of development was really what was driving the high drug prices, there should be some correlation there, right?
"Our findings provide evidence that drug companies do not set prices based on how much they spent on R&D or how good a drug is. Instead, they charge what the market will bear," said senior author Inmaculada Hernandez, PharmD, PhD, associate professor at Skaggs School of Pharmacy and Pharmaceutical Sciences.
Of course, that finding shouldn't really be a surprise to anyone. Of course pharma companies are going to charge "what the market will bear." But, therein lies the problem: we don't have an actual market for most of these drugs. [...]
But, at the very least, don't just accept the claim that drugs cost a lot because pharma has to spend a lot on R&D. All of the evidence suggests that's ridiculous.
Journal Reference:
Olivier J. Wouters; Lucas A. Berenbrok; Meiqi He; et al. Association of Research and Development Investments With Treatment Costs for New Drugs Approved From 2009 to 2018 JAMA Netw Open. 2022. DOI:10.1001/jamanetworkopen.2022.18623
Read more of this story at SoylentNews.