Pharmaceutical conundrum

How much is too much to save a life?

By Philip Kahn and Jessica Mintz
From the February 2006 Print Edition

Today a drug exists to combat almost any condition — high blood pressure, diabetes, asthma, heart problems, most bacterial infections ... the list goes on. A hundred years ago, many suffered from and died of conditions like these, but today a doctor need only prescribe a few tiny pills to prevent or cure them. But why, you ask, does there still not exist a cure for the common cold or AIDS? Why isn’t there a cure for cancer yet either? If we are really beginning to understand the human body and its esoteric functions, how is it that these apparently simple things still pose a threat to us?

Scientific research has advanced both our knowledge and our ability to control many aspects of the world around us in a very short period of time. Surely it is obvious that scientists’ hard work has vastly improved the standard of living for all of us. But when you get caught up in the politics of it all, Medicare this and rising drug costs that, people on both sides of the spectrum seem to forget the many incredible products that preserve, extend or enhance our lives have been made available to them by assiduous researchers in the pharmaceutical industry. These wonders, however, are not and cannot be free to the “common man” or anyone else. The bottom line is this: Just because certain drugs exist does not mean that everyone is entitled to them at no cost.

Let’s imagine for a moment that tomorrow, the government institutes a program that cuts every end-product prescription drug price by 50 percent. Unfortunately such a short-sighted edict will not reduce the high cost of creating and marketing new drugs, and clearing them with the FDA. Development of new wonder drugs, including those that may well cure cancer, AIDS, Alzheimer’s, Parkinson’s or any of the remaining scourges of humanity, will clearly come to an abrupt halt if no resources could be spared for the uncertainties of research and development.

Many of us don’t think twice about taking our smoothly coated pills or even when that clean needle is slipped into our arms. But what happens in the long journey of a drug from a complex synthetic chemical in a lab to a bottle of Lipitor on a drugstore shelf is important to understand if we wish to keep the fragile pipeline open. It is unfortunate but true that only a small fraction (less than 10 percent) of promising drugs in the pharmaceutical industry actually make it to market. Therefore, when a drug sells, the money spent not only pays for its manufacture but also for the research involved in its creation, tests, qualifications, marketing and, of course, its defense from the inevitable lawsuits. The drug’s sale must also cover the cost of developing and testing typically more than twenty other compounds which are ultimately rejected in its favor, and funding R&D for future drugs.

The member companies in the Pharmaceutical Research and Manufacturers of America spent about $30 billion on R&D in 2001, critical seed money that has yielded the avalanche of advances we enjoy today. If return on that investment is curtailed then the companies will have no choice but to scale back the number of prolific drugs that they continue to develop. That many throughout the world would suffer needlessly, is certain.

There is also the fact that the costs of the pharmaceutical industry are more exaggerated than many think; statistics have shown that the cost of prescriptions has been roughly on-par with the general increase in prices due to economic inflation, and, furthermore, the costs of the drugs only constitute a relatively small portion (about 10 percent) of the total healthcare bill. Because they are up-front and paid for all at once, their cost is more evident than that of other services and facilities that are embedded and buried behind technical jargon. Furthermore, the pharmaceutical industry has been focusing more on prevention lately; that is, even summed over many years, these preventative drugs often cost significantly less than the single procedure required to correct the problem.

So what needs to be done to ensure the future success of this industry and the continued availability of its products to the public? The best way to reduce the cost of medicine is to reduce the cost of creating and delivering it. Government can help here by eliminating excessive regulatory requirements, reducing taxes and instituting tort reform.

Doctors, researchers, and pharmacologists are people, like you and me, who want to see diseases cured and problems solved. Great innovation comes at great cost, and to understand that is critical for the future of our society and its social welfare. We can be frustrated with high prices, but we must always keep in mind the rewards being reaped and the effort being exerted. Blaming creators for the labors of their creations is no solution to any problem — give your support to those who provide us the health we enjoy today.

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