Slashing Cost Of Drugs January 2, 2007
Posted by Confused in Health, Innovation.trackback
One of the biggest problems which developing nations face is the high cost of drugs. The patents are generally held by giant Western pharmaceutical companies who exploit their monopoly status to drive up prices. African nations have faced prohibhitive costs with H.I.V drugs and India will face the same challenges as it completes the change from a regime of process patents to product patents. Can this help?
Two UK-based academics have devised a way to invent new medicines and get them to market at a fraction of the cost charged by big drug companies, enabling millions in poor countries to be cured of infectious diseases and potentially slashing the NHS drugs bill. Sunil Shaunak, professor of infectious diseases at Imperial College, based at Hammersmith hospital, calls their revolutionary new model “ethical pharmaceuticals”. [link]
The crucial question here is the level of innovation. Could the two professors have ‘invented’ their new drug without the basic molecular structure developed by the pharmaceutical companies? Developing new drugs costs hundreds of millions of dollars simply because a lot of compounds don’t come through trials, they might be actually show promise in animal trials but fail the human ones. So a company developing a successful drug not only attempts to recoup the cost of development of that particular drug but also of those compunds which failed. I remember that an Indian pharmaceutical company, Dr. Reddy’s lab had developed a potentially winning compound which it preferred to sell to an American company rather than take the risk of going through a clinical trial. The cost of failure was potentially so high that it could have put Dr. Reddy out of business.
Patents exist so that the drug companies can recover their investments and make profits, a part of which, at least theoretically, would be invested towards developing new drugs. Disrupting this cycle of innovation can have potentially disastrous effects.
It would of course be very gratifying if researchers like professor Shaunak can actually lower the cost of developing new drugs. Has that happened in this case? The jury is still out on that.
(link via n)
This is a major issue in healthcare. What most people do not appreciate is that drug discovery is an incredibly complex, capital intensive process. A few years ago, it was thought that computer simulation would reduce the complexity by not having to actually screen compounds – but that hasn’t worked as well as expected. Drug companies will therefore have to be driven by the incentive of making a profit.
However, innovations such as these that lowers the cost of drugs for poorer countries is important as well.
Nice blog, guys!
I agree BP above, drug companies – like any other industry, have to be profit-driven and there’s no two ways about that. However,
As far as the issue of innovation that you brought up, I am not of the belief that all the billions of dollars being pumped into pharma industry go towards “true” innovation. There is a very small percentage (
Nice blog, guys!
I agree BP above, drug companies – like any other industry, have to be profit-driven and there’s no two ways about that. However,
As far as the issue of innovation that you brought up, I am not of the belief that all the billions of dollars being pumped into pharma industry go towards “true” innovation. There is a very small percentage (less than 20%) of “new” molecules being put out every year and more derivative products. When there is no apparent need for several versions of anti-histamines or cholesterol lowering products to be made, companies continue to do so, often in an attempt to out compete each other.
Thus, I see the strategy of Shaunak is along the same lines of making “derivatives”. If the industry does it, they should be allowed to, too, without threatening the cycle of innovation.
Secondly, it appears that one of their cost-cutting efforts is also in having the trials in India, which works out cheaper, simpler, and perhaps more relevant in the case of some infectious diseases.
The truth remains that big Pharma giants are going to be busy making more variations viagra and anti-obesity drugs. Drugs for infectious diseases has the smallest market in developed countries where most of the industry is, but the largest need on a global scale. Any efforts to bring such treatments and cures to the poorer and more in-need nations is laudable.
Sorry for the long post. I was just listening to this earlier on the radio today so this keyboard diarrhea. I will stop.
TGFI,
Thanks!
Yeah, but this has some ethical concerns. Will the drug companies be fair to the poor and allow them to give informed consent.
Second, while developing countries have benefited from ignoring the patent regime, their own drug development has suffered. Forget Europe, almost even drug discovery takes place in USA.
Of course, drug companies are hardly likely to invest in developing drugs for infectious diseases-no market in the West. Perhaps, apart from researchers like Professor Shanuk, a system which gives partial benefits to drug companies, say patent for 10 years rather than standard 20 can help.