Adam Barak’s response to Sarah Bosely’s article printed in The Guardian, 12th April 2018
On 9 April 2018, an article by Sarah Boseley on the pricing of pharmaceuticals was printed in Britain's Guardian newspaper. Adam Barak's response can be seen here, which the Guardian printed on 12 April.
Competition and collaboration to cut the price of medicines
The large graphic accompanying your article (The cost of drugs, 9 April) has a major omission, one of the most important factors affecting medicine pricing and affordability. (There are others involving “international reference pricing” and “parallel trade” but that’s a separate debate.)
It charts the 13 years of rigorous clinical development required by regulators to ensure new drugs achieving regulatory approval are safe and effective. As the article states, all this R&D costs an absolute fortune.
The crucial missing piece is what happens next. Patent exclusivity is limited by regulations enabling other companies to make copies of the original licensed product (within a lot less than the 20 years referred to). Once these “generic” drugs are launched, the originators’ revenues can quickly diminish to next to nothing, meaning that the companies investing in the R&D have a relatively limited window to make their money. With such a relatively short duration to (more than) recoup the costs of investment, drug prices have to be higher than necessary. The issue is even more pronounced for medicines used to treat relatively rare conditions, where the cost per patient has to be necessarily high. If it wasn’t then, simply, fewer new medicines would be made.
I’ve often advocated that if patent exclusivity was extended for two to three years, lower prices would be possible and in everyone’s interest, except those generic companies who’d have to wait a little longer before they could begin sales with their copies, but surely all the risk is being taken by and all the clinical unmet need is being satisfied by the originator. Giving them a few years longer to make sales (at a lower price) seems a sensible compromise, but under the complexity of international regulatory rules, changing such policy is extremely unlikely to happen.
Adam Barak
PPi Healthcare Consulting
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