Why do drug companies make so much money

why do drug companies make so much money

Not necessarily. There are several reasons to suspect that number is unreliable. They are not impressed with the argument that pharma should cost in its failures. To many Americans, it can seem plausible and compelling.

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The cost of new drugs is putting increasing pressure on people in both rich and poor countries. Mon 9 Apr If you are lucky enough to maake in a country with comprehensive state-funded healthcare, such as the UK, you probably have no idea how much medicines really cost. But it can be a lot. Some drugs that have been around for ages are very cheap — aspirin, for instance, costs pence. But new makke, protected by year patents, can cost hundreds of pounds a packet and sometimes thousands. It is an increasing pressure on all health systems around the world.

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why do drug companies make so much money
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The cost of new drugs is putting increasing amke on people in both rich and poor countries. Mon 9 Apr If you are lucky enough to live in a country with comprehensive state-funded healthcare, such as the UK, you probably have no makd how much medicines really cost. But it can be a lot. Some drugs that have been around for ages are very cheap — aspirin, for instance, costs pence.

But new medicines, protected by year patents, can cost hundreds of pounds a packet and sometimes thousands. It is an increasing pressure on all health systems around the world. The new drugs that cure the liver disease hepatitis C were launched at a price that elicited squeals of pain from the UK, western Europe and the United States, as well as India and Romania, which both have high numbers of infections.

It was soon clear that no country was going to be able to treat everybody who needed them, even though hepatitis C is a killer in the long term and the drugs are — unusually — a cure. In the UK, the National Institute for Health and Care Excellence Nicewhich decides whether drugs are value for money, said yes to hepatitis C drugsmomey Gilead gave a discount.

The drugs would save years of expensive NHS treatment, including liver transplants. But the government balked at the cost of treating everybody — an estimatedpeople are infected. Normally the deal is that the NHS must introduce any drug Nice approves, but in this case it chose to companied it intreating the sickest first and making others wait, which was unprecedented. In mnoey US, the cost was out of the question for many people without good health insurance cover. The prices of new cancer drugs have also been prohibitive.

The cost of drugs became a hot political potato. Hillary Clinton promised to bring down high pricesand Ao Trump also gave the subject a mention. Old drugs are out of patent, which means any company can make them, and usually the price drops very low because of the competition. But Shkreli was an entrepreneur who saw no reason why selling drugs should be any different from selling cars: corner the market and hike the price. He did it a few companiee, but the one that caused all the trouble was a very cheap drug called pyrimethamine, trade name Daraprim.

Daraprim had been out of patent for a very long time, having been approved by the US Food and Drug Administration in It is an anti-parasitic drug given to people with toxoplasmosis infection, particularly where they have weak immune systems because of Aids or pregnancy and cannot easily fight it off. It would seem not. The anger was clear ahy that people think medicines are a special case and that people have a moral right to affordable treatment.

There is quite a tension between that view and the pursuit by pharmaceutical companies of profit for shareholders in the free market. The biggest issue is what you factor in. The Tufts Center for the Study of Drug Development in Boston, Massachusetts, which produces estimates for the cost of making a medicine every few years, accepts that argument.

Drug development is a long process, taking as long as 10 years, it says. The analysis, Tufts says, was based at least in part on information from 10 pharma companies on randomly selected drugs that were first tested in human subjects anywhere in the world from to There are now a lot of campaigners calling for greater access to medicines in both rich and low-income countries.

They are not impressed with the argument that drig should cost in vompanies failures. And why do drug companies make so much money, they say that often the best drugs were invented in university labs, paid for from public funds, so that should also be taken into account. In these cases, they say, the pharma companies buy up promising potential drugs and do the large-scale testing and development. But if pharma companies insist they have to charge high prices because of their high costs, what can be done?

The first big access-to-medicines movement was sparked by Aids in Africa. The inequity of thousands dying for lack of drugs while people with HIV in San Francisco were alive and well on medication became a huge issue. Patents normally apply for about 20 years but have to be registered in each country where the drug is sold. That stops other companies making rival copies that might compete to push the prices.

But India had different intellectual property rules at the time, which meant the HIV drugs patents did not apply. But the rules have since changed and attempts to make cheap copies of new drugs such as the hepatitis C medicines in India have been subject to long battles in court. At least health services can save money by using cheap copies once drug patents run.

These drgu much harder to copy, because they contain living cells or blood mych proteins, not just simple chemicals. Many cancer drugs are biologics and for some time many doctors had doubts that the so-called biosimilars would work as well as the originals.

But now it is clear they. Is it just radical campaigning groups that are trying to get the prices of the patented medicines down? The World Health Organization is strong on access to medicines for all and also has a list of essential medicines that all countries are advised they should stock.

A UN high-level panel on access to medicines spent the best part of a year deliberating over the issues, with members from pharma companies as well as civil society and academics. The UN report has given everybody food for thought and is still being discussed.

The majority of big pharma, with the possible exception of GSK, whose then chief executive Sir Andrew Witty was on the panel, was unenthusiastic about the report. But as happened with Aids, each new crisis over access to medicines — whether concerning a common liver disease or a rare cancer, and particularly over the antibiotics that are under threat and vital to all our lives — is likely to put pressure on companies to find ways to bring the costs of medicines.

WHO: Medicines pricing and financing. WHO: Innovation, access and use. Access to Medicines Foundation annual index on how leading pharma companies make their drugs available in poorer countries. Lancet Global Health blog. Newsweek: How prescription drugs get their prices. The briefing. Why does it matter what medicines cost? So medical drugs are not like Chryslers or Porsches in the public mind, then?

So how much does it cost to make a medicine? Herception At least health services can save money by using cheap copies once drug patents run.

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The cancer research that pharmaceutical companies won’t fund

Pharmaceutical companies can extract enormous profits by controlling knowledge about how to make their drugs. Or you decide to buy chicken instead. Last year, the FDA approved giving abiraterone to men with prostate cancer who had not received previous treatment. Perhaps no policy area exemplifies this corruption more than the issue of drug pricing. First, a lot of research has to happen outside the lab, and in medicine you obviously have to go to doctors and see how well the new drugs work on sick patients. Since then, almost all new medications have been variations of old medications with a slight improvement why do drug companies make so much money even that or a new indication. Each year every publicly traded company has to file an annual financial report with the SEC which lists annual revenues, itemizes costs, profits, etc…. Despite his promise to be tough on Big Pharma, President Trump has proven to be makw friend to the industry. While even this short extra time can be valuable to individual families, too much investment in oncology means not enough in drugs for other illnesses whose treatments cannot be so dryg priced. The Print Edition. A UN high-level panel on access to medicines spent the best part of a year deliberating over the issues, with members from pharma companies as well as civil society and academics. And the money the company pays each of these doctors comes directly out of the research budget. The first big access-to-medicines movement was sparked by Aids in Africa.

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