High cost of new drugs

BMJ 2016; 354 doi: https://doi.org/10.1136/bmj.i4136 (Published 27 July 2016) Cite this as: BMJ 2016;354:i4136

Re: High cost of new drugs - Recognize the pivotal role of the private sector

Mazzucato addresses the important issue of high drug prices. She argues that costs made by the pharmaceutical industry for research and development (R&D) are not transparent, that over two thirds of new medicines do no represent any therapeutic advance for patients and that primarily the public sector is responsible for actual drug innovation.
It is worthwhile to investigate the recent literature on these topics. In the largest study to date Stevens et al. (1) found that public sector research institutions were responsible for the discovery of new drugs of only 143 (9.3%) of 1541 new drug applications approved by the Food and Drug Administration (FDA) between 1970 and 2007. In Europe, only 17% of 94 drugs approved between 2010 and 2012 originated from academia (2). The role of the public sector is therefore important but limited, primarily because of restrained budgets. The most recent estimation on the costs of R&D per approved drug is $2.6 billion (3). Transparency of R&D expenditures is given in the annual reports from the companies. Dividing these expenditures by the number of drugs that were brought to the market, results in even higher costs per approved medicine (4). In 2015, 45 new medicines were approved by the FDA, a new record (5). Nearly half of these were first-in-class compounds. I challenge professor Mazzucato to name the two thirds (n=30) of drugs that do not represent any advance for patients despite their positive benefit-risk profiles as evidenced by regulatory approval.
The discussion on drug prices is important. These prices will always be perceived as high in view of the enormous R&D investments. The difficult debate on how to move forward includes many aspects but can only be fruitful when the enormous contribution of the private sector to drug innovation is being recognized.

1. Stevens AJ et al. The Role of Public-Sector Research in the Discovery of Drugs and Vaccines. N Engl J Med 2011; 364: 535-41.
2. Lincker H et al. Regulatory watch: Where do new medicines originate from in the EU? Nature Reviews Drug Discovery 2014; 13: 92-3.
3. Dimasi JA et al. Innovation in the pharmaceutical industry: New estimates of R&D costs. J Health Econ 2016; 47: 20-33.
4. Herper M. The Cost Of Creating A New Drug Now $5 Billion, Pushing Big Pharma To Change, Forbes, August 11, 2013.
5. Eye on FDA. FDA 2015 Report on New Drug Approvals – A Banner Year, January 26, 2016

Competing interests: I worked for more then 20 years as pharmaceutical physician in the pharmaceutical industry.

31 July 2016
Henk Jan Out
Visiting Professor
Faculty of Health Sciences and Wellbeing, University of Sunderland, UK
Sciences Complex, City Campus, Chester Road, Sunderland, SR1 3SD
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