Wednesday, September 29, 2004

The loss of Big Pharma on the drug reimportation issue

Derek Lowe explains why the pharmaceutical industry will lose the reimportation battle.

Safety and counterfeiting issues, while a big problem, can be addressed. Their arguments about R&D costs have the potential to be the strongest argument, but that potential isn't going to be fulfilled. What pharma companies need to do is tell the truth:
  1. Drugs typically take 8-12 years to develop and a lot of money. (The $800 million figure ought to be vigorously defended, or a defensible figure needs to be put forth. Transparency will be helpful here.)
  2. Advertising budgets can't simply be moved over to R&D. If no one hears of the drug, then no one will buy it.
  3. 'Me-too' drugs are important because people's bodies may respond more to one member of a class of drugs over another, or side effects of one may be better than another on an individual basis. The competition aspect of me-too drugs is also helpful.
  4. Each of these problems might be addressed by further regulations which will open up other problems and produce further waste in the system.
In short, the pharmaceutical industry has a lot of valid points it can put forth. Perhaps it's out of fear (or arrogance) that people won't understand the nuances of the economy of drugs (which is pretty much like the economy of any other good which is hard to research and usually easier to manufacture) and the nature of applied research and development that they hide behind simple (and intimidating) explanations.