URL of this page: http://www.nlm.nih.gov/medlineplus/podcast/transcript070615.html

To Your Health: NLM update Transcript

The $2.6 billion pill: Scrutiny of drug development cost estimates: 07/06/2015

NLM logo

Greetings from the National Library of Medicine and MedlinePlus.gov

Regards to all our listeners!

I'm Rob Logan, Ph.D., senior staff, U.S. National Library of Medicine (NLM).

Here is what's new this week in To Your Health, a consumer health oriented podcast from NLM, that helps you use MedlinePlus to follow up on weekly topics.

The revised, estimated $2.6 billion cost to develop a new drug merits scrutiny for overall accuracy as well as the inference that drug companies spend most developmental costs on research, finds an insightful editorial recently published in the New England Journal of Medicine.

The editorial notes the Tufts Center for the Study of Drug Development recently increased their estimated costs for a pharmaceutical company to develop a drug from $802 million in 2003 to $2.6 billion.

The editorial's author finds the Tufts estimate deserves scrutiny for at least three reasons. First, the author explains the estimate is based on data from 10 unnamed drug makers who provided cost development information on 106 compounds that the companies self-generated. Jerry Avorn M.D., Harvard Medical School [the editorial's author] notes (and we quote) 'the raw numbers on which the analysis is based are not available for transparent review — and are likely never to be divulged' (end of quote).

Second, Dr. Avorn explains nearly half of the cost of drug development may be based on the cost of capital investments in the product rather than actual research expenditures. Third, Dr. Avorn finds (and we quote): 'the $2.6 billion figure does not consider drug-development costs borne by the public for the large number of medications that are based on external research that elucidated the disease mechanisms they address' (end of quote).

Dr. Avorn notes public subsides for drug development include research and development tax credits, payments received from the federal government for testing, as well as basic research about promising biological interactions for drug development from organizations such as NIH.

Conversely, Dr. Avorn finds one aspect of drug development may be less expensive today than in 2003. Dr. Avorn explains the Tufts analysis suggests the time required for federal regulatory approval has been reduced, which hypothetically reduces one driver of drug development costs.

Regardless of the precision of the drug development estimates, Dr. Avorn writes a cost increase remains significant because (and we quote) "it has been used to justify the cost of several expensive mediations and to support longer periods of marketing exclusively for new drug products' (end of quote).

However, Dr. Avorn explains the latter justification yields a different perspective when a pharmaceutical company spends funds to purchase a competitor rather than invest in the underlying research to bring a product to market. Dr. Avorn notes the latter scenario occurs routinely and potentially rebuts the position sometimes taken by drug firms that high expenditures are used for drug development research.

Dr. Avorn concludes (and we quote): "We need an accurate determination of all the costs that go into the creation of a new drug, to inform ongoing discussions about how best to foster such development and the most reasonable way of paying for truly innovative medications' (end of quote).

Meanwhile, a guide to the drug development process (from the U.S. Food and Drug Administration, the FDA) is available in the 'related issues' section of MedlinePlus.gov's drug safety health topic page. A succinct explanation (from the American Medical Association) of how the FDA approves drugs (or certifies their safety) is available in the 'start here' section of MedlinePlus.gov's drug safety health topic page.

MedlinePlus.gov's drug safety health topic page also provides links to the latest pertinent journal research articles, which are available in the 'journal articles' section. You can sign up to receive updates about drug safety issues as they become available on MedlinePlus.gov.

NLM's clinicaltrials.gov website additionally provides access to most of the clinical trials that test the safety of the drugs under development. In addition, clinicaltrials.gov provides access to a standardized summary of recently completed clinical trials of FDA approved medications.

To find MedlinePlus.gov's drug safety health topic page type 'drug safety' in the search box on MedlinePlus.gov's home page, then, click on 'drug safety (National Library of Medicine).' MedlinePlus.gov also has a health topic page devoted to medicines.

Before I go, this reminder... MedlinePlus.gov is authoritative. It's free. We do not accept advertising ... and it is written to help you.

To find MedlinePlus.gov, just type "MedlinePlus.gov' in any web browser, such as Firefox, Safari, Chrome, or Explorer, on any platform.

We encourage you to use MedlinePlus and please recommend it to your friends. MedlinePlus is available in English and Spanish. Some medical information is available in 43 other languages.

Your comments about this or any of our podcasts are always welcome. We welcome suggestions about future topics too!

Please email the podcast staff anytime at: NLMDirector@nlm.nih.gov

A written transcript of recent podcasts is available by typing 'To your health' in the search box on MedlinePlus.gov's home page.

The National Library of Medicine is one of 27 institutes and centers within the National Institutes of Health. The National Institutes of Health is part of the U.S. Department of Health and Human Services.

A disclaimer — the information presented in this program should not replace the medical advice of your physician. You should not use this information to diagnose or treat any disease without first consulting with your physician or other health care provider.

It was nice to be with you. Please join us here next week and here's to your health!