Friday, May 18, 2007

Myth #1: High U.S. Drug Prices Guarantee Us First Shot at New Drugs

The drug industry often defends higher drug prices in the U.S. by claiming that it guarantees Americans "first shot" at new drugs.

Bob Ehrlich at DTC Perspectives stated as much in his e-mail commentary today:
"As far as high pricing goes, here is where it can get quite complex. Drug companies need someone to pay high retail prices, because so many countries have price controls. There is not really a palatable explanation to the American public on why drug prices are higher in the U.S. market. The truth is that someone needs to make drug sales profitable and unfortunately it is the American public that is hit with the tab. The benefit is more drug research and a market inspired guarantee that Americans will get first shot at newer drugs. We certainly will appreciate that when a pandemic hits."
[Bob, I'm sorry if I am quoting you out of context, but I can't link to an e-mail message. If your commentary had a Web page, I would be glad to provide the link.]

"Pandemic" fear mongering aside, after about 20 milliseconds I was able to think of at least one drug that has been available in Europe for at least a year and not yet approved for sale here in the US: Acomplia, or as it is now going to be called here in the US, Zimulti (see "Yummi! It's Zimulti!").

Not that I think this is such a great product, but it is representative of a common practice by the drug industry: launch new products outside the US first, then get US FDA approval later.

I am not sure how "common" this practice really is, but I think it's likely to be more common now that the FDA seems more cautious in approving new drugs (see, for example, "Our Lawless FDA"). Having a drug already on the market in Europe, Asia, and South America is a good argument for approving it for sale in the US, all other things being equal.

Just a thought: What Americans may sometimes get by paying higher prices for Rx drugs is the comfort in knowing that we are not the guinea pigs; other people are. That's priceless!


  1. Anonymous8:35 AM

    Isn't it a bit ironic, though, how the insulin market has been contrarian? Natural (animal) insulins--which for almost 80 years were over-the-counter medicines in the U.S.--are available elsewhere throughout the world, but have been removed from the U.S. marketplace entirely! Needful Americans must go through a convoluted "personal importation" procedure in order to obtain this time-proven medicine from outside U.S. sources. Which brings us to the "guinea pig" analogy.

    The speed with which rDNA genetically-engineered insulin was approved was record-setting. This very speed placed all diabetics forced to switch to rDNA insulin in (involuntary) Phase IV trials--the guinea pig role, where adverse event reports are tallied. Now, after more than 20 years of usage, new "conditions" are arising in the diabetic population [insulin resistance, Type 3 diabetes, Type 1-1/2 diabetes]. Do you think this might be a result of Lilly's eagerness to reap profits, guinea pigs be damned.

    From approval to market domination, rDNA insulin producers seem to have broken all the rules (no penalties assessed)--and not necessarily for the betterment of mankind, nor for the best treatment money can buy.


  2. Anonymous11:21 AM

    Bob is being a little naive in his email. Pharma Marketing execs are frequently cynical about patient health, and about the impact their decisions will have on patient lives. If as Bob says, "In private meetings I never heard a sinister comment, or an uncaring reaction to a side effect problem. I am sure they have occurred but not while I was observing," then he's got some damned good ear plugs and dark glasses. Or he hasn't been at many meetings, which I doubt.

  3. Anonymous7:37 PM

    It may be true that many medicines are approved outside the U.S. first. My point is that when we really need a lifesaving drug and the supply is short, such as likely in a pandemic, Americans will get those drugs first. After all higher prices get the limited supply.

    The critics of the drug industy's R&D justification for high U.S. prices have few facts to refute that. They claim the NIH or universities create most drugs, but where is the evidence? Of course they can point to a few cases and those get featured in critics' books, but the fact is drug comany research discovers most new drugs and vaccines.

    Ok, so what if we tested the need for industry profits to create new drugs, by creating price controls? Then Americans will be the guinea pigs for the failure of drug discovery. Is that the outcome you want John?

  4. Bob,

    Thanks for your comments.

    Speaking of protecting Americans against pandemics, I think Drug companies can still profit from vaccines, development of which is a special case in terms of high drug prices, if an enlightened government would subsidize development critical vaccines for public health -- like some EU governments are doing with Gardasil -- making it available for free (Merck still gets paid).

    In the case of bioterrorism threat, I think the industry and our government is failing to protect us no matter at what price:

    AP: U.S. Cancels Anthrax Vaccine Contract

    The U.S. government ...cancelled an $877 million contract with California-based VaxGen Inc. for a new anthrax vaccine.

    The cancellation came after VaxGen missed an important deadline to start human tests of the vaccine, the Associated Press reported. That failure put VaxGen in default of its contract with the federal government, according to the Department of Health and Human Services.

    The cancellation isn't just bad news for VaxGen. It also means that the U.S. government now has no defined plan to find a next-generation anthrax vaccine, the AP reported.


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