Many cannot seem to wrap their heads around the high costs of pharmaceuticals. The typical claim is that pharmaceutical companies are evil and greedy, plundering the pockets of those sick and desperate and exploiting the misery of others. While there are numerous reasons for the expensiveness of drugs, very few seem to realize that one of the major contributors is the actual science. Thankfully, Scientific American has published two articles on the subject by chemist Ashutosh Jogalekar: “Why Drugs Are Expensive: It’s the Science, Stupid” and “Why Drug Discovery Is Hard – Part 2: Easter Island, Pit Vipers; Where Do Drugs Come From?” The articles go very well with the following ReasonTV video (from 2009) on medical innovation. Worth thinking about.
Both my parents work in pharma research. I didn’t need an article to tell me what I already knew about drug discovery and how long of a process it is. Pharma is also struggling to keep their talented scientists on their payroll. Want to know why it is taking even longer for drug discovery? Because those doing it are in fear of losing their jobs.
There are other issues as well. Because of the drug price caps in Europe and Canada, the bill for all that science ends up getting paid mostly by US consumers. Countries with price caps are, in some respects, free-riding on American medical innovation. The US also has more litigation and higher payouts for litigation, which drives up costs. And then there’s the problem of Medicare’s rules forcing the purchase of brand name drugs rather than identical, much less expensive generics, which drives up the drug bills paid by taxpayers. Not to say that the “greedy pharmaceutical companies” narrative is true, but I don’t think we necessarily have to throw up our hands and say there’s nothing we can do about drugs costs without torpedoing innovation.