Tuesday, March 22, 2016

Medications save lives and reduce suffering. What are the best ways to make them available? Here is an interesting excerpt from a response to the election year proposals:

"President Obama’s latest budget includes proposals—echoed or one-upped on the presidential-campaign trail by Bernie Sanders and Hillary Clinton—that would require pharmaceutical companies to release data on the cost of research and development (R&D) and the extent of discounts offered to insurers for each drug brought to market. Yet the key numbers already are disclosed freely—and we know how to get better value from medicines and improve their affordability to patients.

The company I lead, Lilly, discloses its annual R&D spending in audited financial statements every year, like other public companies. Lilly’s number for 2015 was $4.8 billion—part of the $50 billion invested in R&D each year by the members of our industry association alone. That’s more than 20% of all R&D spending by all U.S. businesses. Seen against that staggering total, the proposal to mandate the nearly impossible task of assembling drug-by-drug R&D-spending figures misses the whole point.

Pharmaceutical companies’ R&D feeds innovation from the earliest identification of leads through to clinical trials, real-world data collection and the refinement of existing treatments. It includes the cost of myriad failures—part of every scientific enterprise—along with further research on approved medicines, right up to their patent expirations. Money made on the sale of today’s new medicines feeds all of the indispensable streams in this complex ecosystem.

Averages are easy enough to come by—a new academic study in the Journal of Health Economics says it takes about $2.6 billion in R&D investment per new medicine launched. Calculating a precise number for an individual product is quite another matter. Consider Lilly’s investment of billions of dollars in R&D related to Alzheimer’s disease over the last quarter century. Since there are several candidates in our pipeline that emerged from past work, to which future product and in what proportion should these costs be allocated? And to what end?

The key insight is beyond dispute. Developing medicines is risky, expensive and time-consuming, and everyone would be better off if it were less so. Rather than meaningless disclosure mandates, policy efforts instead should encourage whatever can be done, without compromising patient safety, to shave precious weeks off development and regulatory-approval timelines."

For the rest of this article and comments to it, see: