Cost of developing new drugs may be lower than industry claims: trial
A report on a €34m tuberculosis drug trial challenges pharmaceutical industry claims that bringing a new drug to market routinely costs billions, prompting debate over how R&D costs are calculated and used to justify high prices. Commenters argue over whether successful drugs should bear the cost of many failed candidates, how much early-stage research is publicly funded, and why prices vary so dramatically between countries. The thread also raises ethical and policy questions around patents, price regulation, and whether life‑saving medicines can or should be treated like ordinary profit‑seeking products.
Scope of Drug Development Costs
- Major debate on whether you should divide R&D costs only across successful drugs or also include all failed candidates and abandoned programs.
- One side: you must amortize failures; otherwise you understate true economic cost. Discovery is an ecosystem with many losers funding a few winners.
- Other side: “failure” also generates knowledge, and companies over-attribute broad portfolio and corporate costs (M&A, lobbying, marketing, executive pay) to justify very high per‑drug figures.
Role of Public Funding vs Private R&D
- Many comments note that universities and government (e.g., NIH) fund a large share of basic research and early discovery.
- Counterpoint: academia usually stops at cell/animal work; the most expensive parts are optimization, manufacturing scale-up, and human clinical trials, which are largely privately funded.
- Disagreement over how to count public vs private dollars and whether M&A spending should be treated as R&D.
Drug Pricing, Patents, and Market Structure
- Strong focus on the gap between marginal manufacturing cost and US retail prices (e.g., semaglutide, insulin, HIV prophylaxis, biologics).
- Patents and regulatory exclusivity create temporary monopolies, especially for life-saving drugs with inelastic demand.
- Examples of price discrimination: same drug much cheaper in Europe/other “sane countries,” with claims that US buyers effectively subsidize lower foreign prices.
- Practices like pay‑for‑delay and patent gaming are cited as ways to extend monopoly rents.
Ethics, Access, and Regulation
- Some argue high prices and strong IP are necessary to incentivize risky, long-horizon R&D; without large upside, fewer drugs would be developed.
- Others argue health care is not a normal consumer market; life-or-death needs justify price caps, compulsory licensing, public drug development, or state IP buyouts.
- Personal anecdotes highlight avoidable deaths and severe hardship from unaffordable insulin or other drugs, used to argue the current system is morally unacceptable.
Critiques of the TB Trial Cost Example
- The showcased €34m TB trial combined older, already-approved small-molecule drugs, used off-the-shelf generics, and was run in lower-cost countries.
- Critics say comparing this to headline “$3B per drug” industry figures is apples-to-oranges, since it omits discovery, failed programs, high-cost indications, and Western regulatory demands.
- Supporters still see value in transparent, itemized trial-cost reporting as a benchmark and accountability tool.