A lot of the fundamental research is already done in universities and in small companies. However, the big money, the major costs and thus the drievr for cost recovery by high prices is not in research it is in development. Development costs are rising fast as the public and regulators become ever more risk averse.

Even if you outsource all research to universities you don’t solve the funadamental problem that drug development is extremely expensive and that most potentially promising drugs sourced from these exceelent universities don’t actually succeed as marketable products.

The people who can be most relied on not to waste money, in my experience, are the people in research and development who actually do the research and development, especially in cash-strapped Univs. This is because they know that money saved on one project goes to support another one.

How you harness this “thriftiness” to do drug development is another question, but I think the basic principle is sound.

I agree that we need a better business model, but a partnership between pharma and governemnt is unlikley to deliver anything better, and with history to guide us anyone who thinks that governemnt research or expenditure is either effective or efficient is deluding themselves.

One could write a whole book (or two) about the differences in the ways academia and Pharma do research. But they are different, which is one reason why it is important that both exist doing overlapping, and different, and complementary things.

I doubt if the Treasury would be very keen on seeing this amount of taxpayers money disappearing so directly. AstraZeneca is currently sending ca. $5 billion a year on R&D and is only half the size of GSK.

The [USA] currently spends $275 billion a year on prescription medicines. But over the next five years, analysts forecast a golden era for generic drugs, as patents begin to expire on brand-name medications with more than $60 billion in combined annual sales. That will open the door to copycats that may be 30 percent to 80 percent cheaper…

The rise of generics has helped slow spending increases for prescription medications over all, even though an aging population is consuming more drugs and even as new medicines enter the market — including cancer drugs costing tens of thousands of dollars…

Generics already account for 60 percent of prescriptions in this country. And that portion is expected to rise, as cheaper substitutes arrive to treat many chronic conditions.

[NYT requires (free) registration or BugMeNot.]

“Glaxo is evil, Nike is cool, when in fact Glaxo, for all it’s faults saves lives every day, something I doubt Nike ever have done once.”

Yes, I agree to some extent. Most of my friends who work for Big Pharma R&D are very committed to the idea of “doing something with value for humanity” and feel this way, and a number of them have contrasted it with doing research in Unis where they felt they were pressured to do “whatever was most likely to get funded”.

So many of the people in Pharma have undoubtedly good motives. But the more one gets into the managerial levels the more the “it’s a jungle and we can’t afford to be less focused on The Bottom Line (i.e. money) than the competition” red-in-tooth-and-claw logic of corporate profitability being the only valid endpoint seems to take over. Or perhaps individual responsibility is diffused. Joel Bakan’s book on The Corporation is a sort of key text for this sort of view.

Some BBC radio show – I think World Service’s [One Planet] – investigated cotton production. Someone claimed that an organic, fair-trade cotton T-shirt would cost £50 to cover its costs.

And I suppose Nike do good by encouraging sport and physical activity, improving fitness.

‘poured down the drain every single year’

Am I alone in thinking that when governements spend money it is likely to be wasted, but when companies do it it is legitimate R&D? Surely the question is whether the money that goes from government to health service to drug company via my prescribing pen could be better directed. Perhaps without the trite medical journal ads and free lunches, subsidised conference places etc, not to mention the worse, non-generic, polypharmaceutical prescribing that comes hand in hand with the above.

P.S. rotavirus anyone?

Get real, if you wany government to pay for drug development, then you are going to be happy to see hundreds of billions of your tax dollars poured down the drain every single year

they’re thinking about vaccinating young girls (but not boys for financial reasons) I think. Which is good – because bigpharma or no, vaccinating against HPV is going to prevent a lot of cervical cancer.

“Pharma operates much as other businesses / corporations – but of course this bring us back full circle to BG’s original point”

Can’t disagree. But it’s also a bit more perverse than this isn’t it? People wanna have their cake and eat it. Glaxo is evil, Nike is cool, when in fact Glaxo, for all it’s faults saves lives every day, something I doubt Nike ever have done once.

www.tellsomeone.de/

Since the German State currently doesn’t pay for HPV, and it costs around $400 for a four year vaccine, there seems to be a bit of a backlash growing in some quarters. It’s a pretty nasty way of marketing your product – implying social pressure to say “you don’t care much about your daughter if you won’t spend $400 on her”. What’s the deal in the UK on HPV?

So lobby for what exactly? well government should subsidise drug discovery so that it’s not controlled solely by market forces. Where do we get this money from? Well we don’t even need to leave the NHS for that. if the NHS can justify a 480,000 payoff to the ex chief executive for Peterborough PCT then how about it quits its restructuring and gives it to pharma thus saving potentially millions…I digress, basically, I believe there is plenty of money to go around and by subsidising drug costs, the govt. can get it for a reasonable cost.

The author of this blog being an academic and a doc and a super dooper award winning journalist (yep, read the bio!) would be a good place to start with lobbying action, no?

Good use of ‘in fact’ – thank you for sharing this insight.

Agree that in business terms Pharma operates much as other businesses / corporations – but of course this bring us back full circle to BG’s original point: when it comes to health, and medicines, most people (at least outside the USA) are instinctive socialists. or at least utilitarians. There is thus an uneasy tension between the model people have in their heads of what ought to happen, and what really does.

www.cbo.gov/ftpdocs/76xx/doc7615/10-02-DrugR-D.pdf

The reason I’m not bothered is because I don’t see big pharma as a special case. The huge marketing budgets that we see are a fact of our imperfect capitalist economy where marketing/advertising is not information, but something close to propaganda. In a perfect capitalist economy with perfect information, something like that envisioned by Adam Smith, such marketing would be pointless.

I don’t see big pharma as any worse in this respect than, for example, Nike. Nike spend virtually nothing on their R&D, they buy the outsourced product for a few dollars and sell at 20x the cost. By far the biggest cost that Nike have is the cost of marketing the idea that their product is somehow worth 20x the actual cost and it’s “cool” to buy something made under labour conditions which we personally would never except. Yet you’ll find many brand wearing consumers ranting on about evil big harma.

The sad fact is that everybody, including big pharma, sees that this works and as other commentators have pointed out, marketing promises better ROI than R&D. This is especially true when your competition starts pushing money into marketing and you then have to play the game of “marketing as mutual cancellation”.

Naomi Klien’s “No Logo” was an interesting, but flawed, take on on the whole idea of “useless” marketing – can’t remember if she has a chapter on any pharma companies though, will check later.

If jodyaberdein’mate walked into Caterpillar and said ‘I plan to kick in someone’s head – which boots do you recomend?’ then Caterpillar would be complicit in the crime.

Similarly, if jodyaberdein’s mate was a famous and world renoun headkickeriner then one could make a good case that Caterpillar were also complicit in the crime.

Life isn’t as simple as you like to think it is.