Cancer Drugs Sold for 25 Times R&D Costs

A new study published in the JAMA Internal Medicine journal has found that the latest new cancer drugs are being sold for many times the R&D costs spent developing them; resulting in mega profits for the drug companies who own them and restricted access to these drugs for only the wealthiest patients and healthcare providers. Even the NHS can now only afford around half of all new cancer drugs, so often has to treat patients with older, less effective drugs instead.

The new study examined 10 new cancer drugs developed between 2006 and 2015; around 15% of all new cancer drugs developed in that period. It found that the total amount spent on developing the drugs was $9bn (£7bn), taking into account the cost of failures and the lengthy time to develop them. However, within just four years of the drugs being approved, they had already generated sales revenue of over $67bn (£50bn), seven times more than the research and development cost. At this rate, with an expected market exclusivity of over 14 years, they could generate sales revenues of $235bn (£178bn) before competitors are allowed to develop cheaper generic versions of the drugs. This would result in sales revenues in excess of 25 times the cost of developing each drug.

That high cost of research and development is often used to justify the price of new drugs, which can be in excess of £100,000 for new cancer treatments, but this latest research shows that there is no justification for these exorbitant prices.

What more evidence is needed to show how profiteering by drug companies is costing lives?

Cancer R&D Costs vs Sales Revenue

In a stark message to drug companies, Dr.Vinay Prasad, one of the authors of the new study said “You can’t hide behind your R&D number to justify costs anymore”.

The pharmaceutical industry has the highest profit margins of any major industry in the world and this latest study simply reinforces the wealth of evidence to support the view that they simply have too much market power and urgently need reigning in.

drug companies do what they are supposed to do – act in the best interests of their shareholders

When a new drug is approved, drug companies are given a 20-year period of exclusivity, enabling them to sell the drug for whatever price they like, even when public money from charities and governments has been used to help discover it! Without any regulation to stop them, drug companies do what they are supposed to do – act in the best interests of their shareholders – and charge the maximum price they can get away with. So, we shouldn’t be surprised that new drugs are often prohibitively expensive, but what beggars belief is that governments do nothing to stop these companies from abusing their monopoly privileges, while patient’s lives depend on access to the medicines in their hands.

Ultimately of course the blame lies with us; with Society. We have placed the responsibility for developing cures for our most deadly diseases into the hands of organisations motivated primarily by profit rather than public health and have failed to put in place regulations or incentives to protect public health interests. Taking drug Research and Development into the public sector, where we can use cheaper finance, openly share knowledge and avoid the trappings of market exclusivity, could be the only real solution.

The Dying for a Cure campaign is calling for a major overhaul of the way we develop cancer drugs, to ensure that investment in R&D in channeled to maximise benefits for patients not shareholders and that new medicines are affordable for widespread use.

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