Again, IMHO, it is both. There are so many drugs that fail to make it that the great expense must be spread over and covered by the few that make it. HOWEVER, I would again ask you to look carefully at what I said above. The drug industry markets their drugs not to help people but to make money, and to do  it in the simplest way possible, by "one dose fits all" approaches without monitoring. Monitoring is seen as an expense and a hassle instead of what it really is - the opportunity to do it best, and for each, maximizing effect and minimizing risk - not by a blind ritual, targeting the dose for each patient to put him/her in the best possible place on the response spectrum, as we do when we do TDM or follow the INR. Eyes open!

      There are platelet assays that are used for research purposes now which should be used to place each patient in the best spot with the new drugs. They ARE good drugs - but it is the unscrupulous way they are marketed, and the totally illiterate way the medical profession trains physicians to treat patients with drugs that are so tragic. The lawyers laugh all the way to the bank because they get both ends of the extremely wide spectrum of response that people have on such fixed dose regimens. Do you really think that a 100 lb and a 200 lb patient get the same effect from the usual dose of Plavix? Come on. If I took the usual 75 mg/day I would bleed all over the place. So I take it Mon Wed Fri and titrate myself by my razor cuts. It sure would be nice to have a platelet assay in the community and a target response to hit! BAD BAD PHARMA! Expensive - yes. Many failures - yes. Need to spread costs - yes. but NO ONE should have to put up with suppression of data that has to be there about patients, response, and outcome. Again, look at my letter to the editor which came out in the Am. J. Cardiol 2014;113:2086-90. Also, look at the original article by Migliorini et al. referred to in that letter. It is NOT either - or. It is BOTH. That is the problem, The data simply has to be there. IMHO, it simply was not looked for. And you see it throughout, because no medical schools teach students how to do it right. Poor MD's! Poor patients! HAPPY BIG PHARMA! HAPPY LAWYERS! OMG!

Very good answer, Christopher.

I would like to add that marketing expenditures for a drug usually are higher than related R&D expenditures.

One of the major costs in developing new drugs is the very high failure rate. The industry needs to look at profitability today in order to pay for research that may or may not pay off in 10 years time which means it is a very high risk operation. However the current cost of new drugs is unsustainable in light of the state of health funds around the world so there will need to be some serious rethinking. One of the most significant cost improvements would be in reducing the number of project failures and this will have to come because at the moment the patient/health fund etc. is actually paying for the industry failures. As long as the industry can continue to pass the cost of failures off onto the consumer then there is no real incentive for them to improve their hit rate. 

i have become a reluctant enemy of the drug industry. I think they do very good basic science when they develop a drug, and I know it costs a lot, but when the marketers get hold, WATCH OUT! You might look at the article by Migliorini et al, entitled ”Comparison of the Degree of Platelet aggregation Inhibition with Prasugrel versus Clopidogrel and Clinical Outcomes in Patients with unprotected Left Main Disease treated with Everolimus-eluting Stents”, which appeared in the Am. J. Cardiol.  2013; 112:1843-1848. You might also look at my letter to the editors about that article, and the authors' reply, They both were in the Am. J. Cardiol. 2014:113:2086-2090. If you look at the paper itself, you will see a figure of antiplatelet effect, which ranges, for both drugs, from minimal to almost total, on the standard doses given. The data were there to easily find the antlplatelet effect associated with best outcome, least bleeding. But they never looked for it. They could easily have found it. The authors' reply suggests to me that we have an essentially untrained and pharmacokinetically illiterate medical community which is being exploited by the drug industry, as if they had published such data it would have been totally against the advertising policy of both companies which says that these drugs do  not need to be monitored. This approach suggests to me that the companies are not aware of (ignore - suppress?) their own evidence and prey on the medical community, which is totally untrained in anything to do with individualized drug therapy. It seems to me that one could easily dose patients with whatever drug, monitor the effect, and individualize the dose, totally without any software guidance, but just as all of us do it with Coumadin, except that the effect here would probably not need to be monitored as frequently) and place each patient at the optimal antiplatelet effect associated with best outcome. But no. That would be too logical. The reply of the authors suggests to me that they regard such an approach as "unrealistic" and that they have no idea how they are being exploited by the drug industry in this respect. Look at the article. Look at my letter. Look at their reply. I think big pharma is laughing all the way to the back, and that such behavior on their part in distinctly unethical. The authors' reply, I believe, reveals the depth of their lack of awareness of the problem and what can be done to optimize drug therapy. Look at the material and see what YOU think.

The development of a new drug costs money, so what? The big companies still have profit margins of 30 % and more. Do you know what margins an average car manufacturer has? It's in th 5 % range.

To Roger: I do not think that the medical community is being exploited by the industry. No. These "opinion leaders", as marketing people call them, are being paid. They sit in "advisory boards" and receive money.

There are some good books out there, written by insiders, among them Confessions of a whistleblower, on how the pharma industry thinks and works. Yes, they are greedy.

Some companies use public researchers at universities to do their initial research and tests.  How much do the drug companies give back to society?  Why do they need a guaranteed profit margin of 30%?

In short, in the long view, are they giving back what they are taking?

On one hand, perhaps.  However, from the dependence on government spending for things like the Ebola virus research, are we getting enough from the deal?

Dear Arne: You are correct in many instances. But I am referring to the great majority of physicians out there who are bamboozled by the literature and who like these so-called "head to head" studies such as the ones I refer to, and who have NO IDEA how they are being misled by the drug industry, simply because they get NO TRAINING in how to use drugs. There is no one to teach them. It is THAT SAD! Do you know of  any medical school, anywhere in the world, that teaches pharmacokinetics and dosage individualization to medical students in any meaningful way? I do not. That is the problem. Again. What do you think of the reply of the authors to my letter? Do you think it reveals cynicism or lack of knowledge? Or maybe both? It is most interesting that they did not answer the question of who designed their study, only who sponsored it. How many physicians are there who are aware of what could have been done with that study? That is the problem as I see it. Yes, there are a bunch of cynical academic MD's who take advantage of the system and go along with such exploitation. But I bet that, like the authors I refer to, they also do not even know what they could do. Because they never had any proper training. It is the curriculum committees in the med schools who don't know, and if they can help it, they never will. Who is there to teach them? NO ONE! The "opinion leaders" may be that cynical, but the greater medical community is totally unprepared and untrained to realize just how badly they are being had. SO SAD! So tragic for the patients! And again, the drug companies and the "opinion leaders" are laughing all the way to the bank! Look at the TV ads. Look at the ads for "dial 1-800-BAD-DRUG", and how THEY know what is happening with the current status of drug therapy and preying on everyone as well. Poor untrained MD's! Poor med schools! Happy big pharma! Happy lawyers! Poor patients!

The high cost of drugs is a reflection of our inability to predict the fate and reactions of synthetic drugs within human bodies.

It is undisputed that pharmaceutical companies are the innovative engine for the discovery of new drugs. In 2012, according to Pharmaceutical Research and Manufacturers of America (“PhRMA”), pharmaceutical companies spent at least $48.5 billion on research and development.[1] The new drug R&D process is costly, with average investment for each new drug approved standing at $1.2 billion due to the cost of failures.[2] It was estimated that up to 10,000 compounds may be needed to produce one successful Food and Drug Administration (FDA)-approved drug.[3]

How to improve the chances of finding a new drug? One way is to enhance the efficacy of experimental drugs in Phase II clinical trials.[4] Despite diligent work in pre-clinical research, Phase II success rates for new development projects have fallen from 28% (2006–2007) to 18% (2008–2009), with insufficient efficacy as the main culprit.[5] One possible solution to improve the success rate in clinical trials is to focus on those pre-clinical activities which enable researchers to identify correct disease models and validate biological targets in the patient population.

Personalized medicine is the front runner in this context, wherein researchers and doctors seek to tailor therapies to patients not based on described symptoms, but on the basis of patients’ unique genetic makeups and medical histories. Simply put, “personalized medicine” is providing “the right patient with the right drug at the right dose at the right time.”[6] More broadly, “personalize medicine” is defined as “the tailoring of medical treatment to the individual characteristics, needs and preferences of a patient during all stages of care, including prevention, diagnosis, treatment and follow-up.”[7] In other words, personalized medicine relies on the genetic and molecular profile of a patient to treat his or her disease. Personalized medicine typically involves a therapeutic product and an accompanying diagnostic device, whose combination improves patient outcomes.[8]

However, due to the current trend of limiting patentability of genetic information, future process in personalized medicine may be slowed down a few notches if assays or analytic genetic screening methods cannot be patented. Consequently, more failures in drug testing and clinical trials may push the price for newly approved drug to an even higher level. Would such trend become real? Time will tell.

[1] Pharm. Research & Mfrs. of America, 2013 Biopharmaceutical Research Industry Profile (July 2013), at 30, available at http://www.phrma.org/sites/default/files/pdf/PhRMA%20Profile%202013.pdf.

[2] Id. at 32.

[3] Id.

[4]John Arrowsmith, Trial Watch: Phase II Filures: 2008-2010, 10 Nature Rev. Drug Discovery 328 (2011).

[5]Id.

[6]See Wolfgang Sadée & Zunyan Dai, Pharmacogenetics/Genomics and Personalized Medicine, 14 Hum. Mol. Genet. R207 (2005).

[7]Paving the Way for Personalized Medicine: FDA’s Role in a New Era of Medical Product Development, at 6, Food & Drug Admin. (Oct. 2013), available at http://www.fda.gov/downloads/scienceresearch/specialtopics/personalizedmedicine/ucm372421.pdf. 

[8]Id. at 8.

Dear Feng: Personalized medicine is MUCH MORE than getting genetic information to use as covariates in PK/PD modeling. You will never learn all that stuff about a patient, or all the different drug-drug interactions that can occur. Individualized medicine is individualizing the initial dosage regimen based on what we know about others (a population PK/PD model), but it is also, and MOST IMPORTANTLY, monitoring each patients drug concentrations and using Bayes' theorem to make an individualized model of the behavior of that drug in that patient, and then adjusting the dosage regimen again to achieve a desired target goal with maximum precision. These tools have been in use for a long time, but the greater medical community as simply not been interested in it. You might look at the attached paper for more info. These tools are well known in the aerospace community but, sad to say, not in the general medical community, where these ideas never get taught in any significant way in any medical school in the world that I know of, and there is  basically  no one properly trained to teach them. The current impression I have of the "personalized medicine" community is that they will do almost anything to avoid looking at the actual behavior of the drug in each individual patient. Using genetic information as you describe is, to me at least, simply not real individualized patient therapy. Look at the actual behavior of the drug in the patient, model its behavior, dose to hit a specific target goal with maximum precision, just as flight control and missile guidance systems do. 

Very best regards,

Roger Jelliffe

Dear Roger,

Thank you for your prompt and detailed response. My discussion of personalized medicine is more limited in scope than the concept you talked about in response. Our different views of personalized medicine have been captured by Wikipedia, "personalized medicine or PM is a medical model that proposes the customization of healthcare using molecular analysis - with medical decisions, practices, and/or products being tailored to the individual patient. In this model, diagnostic testing is often employed for selecting appropriate and optimal therapies based on the context of a patient’s genetic content. The use of genetic information has played a major role in certain aspects of personalized medicine (e.g. pharmacogenomics), and the term was first coined in the context of genetics, though it has since broadened to encompass all sorts of personalization measures."

In my limited scope context, three successful stories of personalized medicine were noteworthy. The first is Roche’s Herceptin, which is a monoclonal antibody to treat breast cancer patients whose bodies overexpress a protein called HER2 which is related to the HER2/neu oncogene.[1] About 25% of patients with metastatic breast cancer have the HER2/neu oncogene and the standard cancer therapy does not work for them. But Herceptin is a highly effective treatment for this particular group of patients. The same drug may be useless to people without such a genetic makeup.

The second is Pfizer’s Xalkori, which is a drug to treat nonsmall-cell lung cancer (NSCLC) patients who have the ALK oncogene.[2] About 5% of patients with NSCLC are found to have the ALK oncogene that Xalkori targets and these patients respond well to the treatment.[3]

The third example is Vertex’s Ivacaftor, which is approved for cystic fibrosis (CF) patients with a specific genetic mutation, G551D mutation.[4] This mutation is responsible for only 4% of CF cases in the U.S.[5]

Genetic tests using companion diagnostic devices for specific biomarkers are paramount to the success of personalized medicine because the tests are used to identify the subgroup of patients with unique genetic profile to respond to the medicine. The screening result will help physicians to select the most efficacious therapeutic treatment to an individual patient or a particular group of patients. Patent protection for either the screening diagnostic method or the targeted genes would be pivotal to attract continued investment into the personalized medicine sector of the biopharmaceutical industry. There are more than 85 companion diagnostic devices on the market and more than 500 clinically relevant biomarkers available.[6] The promise of personalized medicine is gradually changing the way R&D is conducted in the biopharmaceutical industry, especially how to integrate biomarkers and genomic information into an R&D strategy.[7]

Circling back to the original discussion of drug cost, without the help of genetic information with regard to personalized medicine, if the afore-mentioned drugs were prescribed to ALL patients having the respective disease, the response rate would be dismal and the misuse of effective drugs to unresponsive patient populations would increase healthcare cost and human suffering at the same time. 

If more personalized medicines are discovered following the footsteps of these three successful drugs, it is possible to decrease certain financial burden on the healthcare system by reducing the prescription of drugs to unresponsive patients. Granted the cost of a personalized medicine in this sense may not be cheaper than the one-size-fits-all type of drugs. However, it is arguable that the latter drug may not be effective in all patient populations, thereby creating the possibility of mistreatment and financial waste.

I do realize that my discussion above somehow migrated from drug cost to healthcare cost. Therefore, one the one hand, my argument may not be relevant to this thread of discussion. On the other hand, the above three successful personalized medicines may be categorized as FAILED one-size-fits-all type of drugs because only a small fraction of patient treated would have clinically significant improvement when compared with patients treated with placebos, thus they may fail to reach the preset "success" marker in double-blinded clinical trials. This type of clinical trial failures is at least one of the reasons leading to high drug cost.

In summary, this limited scope of personalized medicine focuses on mode of action instead of individualized dosage of a particular drug. I hope the above may better explain my points disclosed in my first response. Thanks for reading.

[1]Leslie Pray, Personalized Medicine: Hope or Hype?, 1 Nature Educ. 72 (2008).

[2]Matthew Herper, Pfizer Wins Approval for Xalkori, Lung Cancer Drug That Heralds Age of Expensive, Personalized Medicines, Forbes, available at http://www.forbes.com/sites/matthewherper/2011/08/26/pfizer-wins-approval-for-xalkori-lung-cancer-drug-that-heralds-age-of-expensive-personalized-medicines/.

[3]Id.

[4] Paving the Way for Personalized Medicine: FDA’s Role in a New Era of Medical Product Development, at 3, Food & Drug Admin. (Oct. 2013), available at http://www.fda.gov/downloads/scienceresearch/specialtopics/personalizedmedicine/ucm372421.pdf.

[5]Id.

[6]FDA Table of Pharmacogenomic Biomarkers in Drug Labels, Food & Drug Admin., available at http://www.fda.gov/drugs/scienceresearch/researchareas/pharmacogenetics/ucm083378.htm.

[7]See Samarth Kulkarni, Phillip Ma, Laura Furstenthal, & Matthias Evers. Personalized Medicine: The Path Forward, McKinsey & Company (2013), at 11.

Three related pieces on this discussion of research are: 

An Unprofitable Disease: In the Political Economy of Ebola, Who Lives and Who Dies?

at: http://www.democracynow.org/2014/10/16/an_unprofitable_disease_in_the_political

That is an interview with Leigh Phillips, "a science writer and European Union affairs journalist. His writing appears in Nature, The Guardian and Scientific American. His recent article is 'The Political Economy of Ebola.'" at: 

https://www.jacobinmag.com/2014/08/the-political-economy-of-ebola/

Earlier, he had written another piece on this topic called SOCIALIZE BIG PHARMA.

https://www.jacobinmag.com/2013/06/socialize-big-pharma/

He claims that many pharmaceutical companies are willing for the governments to come in and not just take over orphan illness research but many of the apparently low profit areas of vaccines and anitbiotics.

The high cost is a result of a combination of factors.

Drugs are expensive to develop, and their development is a risky business. Even if the drug gets through to market, it may be supplanted by a better one - so the drug companies try to maximise profits as quickly as possible so as to recoup the investment costs and return a profit to the investors. To do this, they invest heavily in promotion, and this too has to be paid for. The monopoly afforded by a patent makes this possible. Companies are obliged to maximise the returns to the investors so the costs are high until competition arrives. But then, once the profits are flowing, the goal is not just to pay back the investors, but to invest in the next drug, the next cash cow.

It's a balance - we pay a lot to have the drugs that make our lives better and longer, but we should strive to ensure that the drugs are still affordable to those that need them AND to ensure that new drugs are developed to help us (and others) in future.

Unless governments pay for drug discovery and development, we rely on the short term incentive of patents to ensure that others will risk their money in drug R&D.

There are ways of capping pharma's profits, but unless we the taxpayers pay for R&D we must pay some monopoly rent or forego new drugs. 

Dear Feng: You are quite right in what you say. I have no doubt about that. And without such information therapy would be blind and ineffective. In my view, both approaches are needed. My problem is that it seems to me that so much of the genomic approach is directed toward the patient in ways that have not been incorporated into useful quantitative models of drug behavior. That is the problem. And there are gazillions of new facts to be discovered about all the genetic and phenotypic characteristics that govern drug behavior that they will never be discovered in time to be useful today at the bedside. In the meantime, I would respectfully suggest that we look at the actual behavior of the drug now, in individual patients, and model that behavior. Just as one models the relationship between the movements of the control surfaces in a plane or a missile and the resulting response, in order to make the plane do what we want (to control the system), so we can do exactly the same here with patients. You do not need to know that the fuel flow affects the behavior of the plane. You simply control the overall behavior of the plane. So also is it with drugs. So many people will study patients up the kazoo but never look at the behavior of the drug in the patient, because the drug companies are so against that as they think that will affect their sales. I think of that behavior as something like "eyes wide shut". I am not against getting good scientific information about what governs drug behavior in patients or in their tumors. But I do think that direct observation of drug behavior in individual patients, coupled with the same strategies of stochastic Bayesian adaptive control used in the aerospace community are already making significant improvements in reducing mortality, decreasing the time of ICU and overall hospital stay, and reducing costs. By and large, the findings from genomics get incorporated, as you say, in useful FACTS about what is useful. What I advocate is looking directly at the patient's response to the drug in terms of quantitative PK/PD behavior (eyes open) and then doing quantitatively what is needed with the dose to control the therapeutic process the way we want it to go for the patient. Really two different approaches with often different goals in mind, as you say. I am a clinician. I like to monitor each patient's drug behavior. I think that is an opportunity and not a drawback, as the big pharma would have you believe. Look at what happens with the current one size fits all approach. you see it in the late night TV ads about the new oral anticoagulants and antiplatelet drugs. The shyster lawyers know. Just look at why they say to call 1-800-BAD-DRUG!

Dear Roger,

Well Said, i would like too the way to monitor each patients drug behavior, it needs a strong commitment from all the stake holders, by the by FDA nod is the first and foremost in this regard, which will not only be novel but the need of the hour.

In this day of modern science it seems to be highly possible.

Dear Roger,

I cannot agree more with what you have said. Other than FDA, patients, insurance industry, and pharmaceutical industry, there is another player in this healthcare game: physicians. Physicians have some right which even the FDA cannot regulate: prescription right. In fact, a physician can prescribe medicines for off-label use without violating any law. If a pharmaceutical company promotes off-label use, it might be sued and punished (although it may cite its First Amendment right to protect such behavior to certain extent thanks to their lawyer friends).

To accomplish what you are advocating (monitoring drug behavior in individual patient), it is more logical and feasible to have such a task assigned to physicians. On the one hand, the pharmaceutical industry is almost forbidden to talk to patients individually (other than using commercial ads regulated by FDA to broadcast to the general population). On the other hand, physicians are probably the only professionals whom patients deal with, among the players in the healthcare industry. That said, if physicians want to take on more responsibilities to improve the wellbeing of patients, they might consider to have funding for and mechanisms of monitoring drug behavior in patients.

During the passing decades, physicians have lost their share of control of or influence over the healthcare sector. Maybe your proposal can reinvigorate their passion for the medical science and rekindle their drive to improve patients' health. But that would a steep slope to climb, which requires some kind of organization skills among phsicians.

but, in the real world ….

the patent attorneys are not very social-minded.

at least, i wasnt

Hello Feng,

We have to see the feasibility of physician led drug monitoring for the individual patients, for instance at primary and secondary care level of clinics/  healthcare facilities it would be too much asking on the part of physicians. May work at hospital level -multidisciplinary with good staffing pattern (Physician and a pharmacist trained for this).

Another important issue at the community pharmacy level they can act initial lead if they put in place an elaborate counselling and reconciliation, without which there will be many gaps in the monitoring the individualized patients. 

So the need of the hour is the strong commitment and linking the data from community to the hospital level.

suppose added some points to the discussion.

Yes, I think that current prices for drugs are too high. It isn't enough for drugs to be cost-effective, they also have to be affordable. There are tons of publications on the subject. You might start with reading Andrew Jack's article in the Financial Times in 2012 "Uncommon Complaints". 

Calling pharma companies "greedy" is like calling wolves "sheep-killers". It's the nature of wolves to eat sheep, and it's a private company's purpose to make as much profit as it can - also for investors, who otherwise invest someplace else. 

How much drug development really costs is a question that companies are loath to answer, Heaven knows, I've asked often enough in my former job as a buyer.... The highest sums quoted are probably an overestimate if they claim to be an average, line extensions coat much less, and I've heard economists argue about whether opportunity costs should be counted...Anyway, a lot of basic research is done at academic institutions - with taxpayers' money. And companies do factor in the sunken costs of developing drugs that fail.

The high costs are  the consequence of the current model for paying for via the price of the pill (or vial - whatever) itself. Many have called this model broken. For example, broad use of antibiotics tends to destroy their value, so rewarding companies for developing new antibiotics by paying per pill is kind of a "perverse incentive"...

Just came across this, and it does reflect my experience....

Could High Drug Prices Be Bad For Innovation?

Comment Now Follow Comments

GUEST POST WRITTEN BY

Peter B. Bach

Director, Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center

http://www.forbes.com/sites/matthewherper/2014/10/23/could-high-drug-prices-be-bad-for-innovation/

Regarding the comment by Mr. Bach cited above, which was based on the fact that many new drug candidates are targeting one common high priced therapeutic area. First, the author concluded that such innovation towards the same target was driven by profitability. Nothing wrong with that conclusion, either in logic or in substance. No one wants to end up in red after putting a drug on the market, even though that happened to many new drugs.

However, the author forgot another consequence of such "crowd-researching." If more drugs enter the same high priced therapeutic area, wouldn't the fierce competition drive DOWN the original high price?! That is the other side of the coin which we should not ignore when presenting facts.

Second, one can argue that the high priced therapeutic area did attract more innovation to tackle an un-met medical need in this case, which is precisely the reason why patent right is used as an incentive to encourage more disclosure and discovery in science and technology. What the exclusive patent right, even though expensive to procure and enforce, is supposed to do is: trade new innovation with public disclosure so that the social common may add more fruits for the future generation.

Third, the author neglected to mention that although many new candidates targeting ALK genes, there are SEVEN different ALK genes in human and one drug may not work on each and every one of them! Accordingly, novel molecules attacking different ALK genes may be beneficial to the diverse patient population. In fact, this option is similar to the personalized medicines approach which may drive down the cost of medication instead of prescribing one drug indiscriminately to all patient groups,  which is financially costly and medically ineffective. Arguably it is possible that what the author argued against might in fact accomplishes what he advocated for, if cheaper and more efficient medication was his true motive of writing that comment!

Having said the above, I would like to comment on an earlier response by Ms. Bucsics, wherein she stated that "broad use of antibiotics tends to destroy their value, so rewarding companies for developing new antibiotics by paying per pill is kind of a 'perverse incentive'. . ." The over-prescription of antibiotics should not be blamed on the drug manufacturers or on their motive to ramp up the R&D on novel antibiotics. The interplay between infectious diseases and antibiotics is a never-ending battle, which had been going on way before the emergence of the pharmaceutical industry and will carry on even after the death of the pharmaceutical industry. In this test of endurance and ingenuity (nature v. human), it would be wrong to accuse the researchers for trying to come up with new weapons against drug-resistant germs. We, the human, need new antibiotics to survive in this arm race.

R&D in antibiotics is not a highly profitable therapeutic area, as evidenced by the lack of heavy hitters from the Big Pharma. Antibiotics are cheap unless the bacteria targeted are drug resistant. Many scholars lamented that more research should be done to find better and novel antibiotics. This would represent the polar opposite of the "crowd-researching" phenomena described above by Mr. Bach. There are pros and cons in both cases. That's life.

In sum, my point of view is that there are many factors leading to the perceived high price of prescription drugs. The sad part is that there might NOT be many viable options which can lower the price and keep the innovation engine running in high gears at the same time. You pay to play in this arena.

My short answer is BOTH reasons. Corporate charters demand profits for stockholders. Not sure if that can be considered greedy. Multicenter clinical trials and marketing costs are high, but some corporations appear to do greedy things, such as fight generic drug sales for stupid reasons when patents expire.  

As Edward Russak said, I also think it is both reasons.

I do not think "labor intensive" is the reason for high drug cost. If it were the reason, then drugs invented in China or India would be cheaper since the former has so many world-class contract research organizations and the latter is dubbed the world's pharmacy. But the reality is that those two countries have not been the most productive contributor of cheap and novel medicines.

In the realm of drug discovery, what is lacking in both countries may be the drive and the expertise to solve cutting edge medicinal chemistry problems. Cheap labor does not equal cheaper innovative drugs. At least for now.

Yes, the risk and costs of developing and introducing a new drug are high. However, in addition, when all I see in what is marketed to physicians is memorized ritual without ANY attempt to communicate science, and which suppresses and ignores their own published data, then I become angry. I refer to the new antiplatelet and anticoagulant drugs. I wrote a letter to the editor which came out in the Am. J. Cardiol 2014;113:2086-90. Also, look at the original article by Migliorini et al. referred to in that letter. They publish the extremely great variability in antiplatelet response seen with both Prasugrel and clopidogrel. With both drugs, the response ranges from minimal to almost total inhibition of platelet function. Clots to bleeds. On average, that with prasugrel was greater, at the dose given, and the outcome was better. The role of the dose in the outcome was never discussed AT ALL. Most notably, there was NO EFFORT made to correlate the antiplatelet response with outcome in individual patients, to see who bleeds and who clots, and what their antiplatelet effect was. The data is clearly there. Look at the reply by the authors. They strongly support the idea that antiplatelet effect is correlated with  outcome. And yet they think that the idea of looking at their own data, finding the antiplatelet effect associated with best outcome, and individualizing the dose to achieve that therapeutic target goal is "far from reality". They (or the drug companies) ignore the data that they already have, because it conflicts with the ADVERTISING POLICIES they have developed that you do not need to monitor the effect of the drug and individualize the doses. Yet the data and the science is all there.

     I was at the American Heart meetings in Chicago recently, and there was a huge plenary session with a panel of 13 people up on the dais, discussing these new drugs, including the president of the AHA and a representative from the FDA.  NO ONE ever raised this issue. All were blind to the idea of individualizing doses. Why? Because big pharma thinks it will hurt their sales, I think. What do YOU think? I ask you to look at the data and judge for yourself. I am sorry, but I think that behind all their really good science, once the marketers get hold of the drug, they are GREEDY. Look at the information packets for these drugs. All is the indications for its use and the ritual you should remember in giving it. Look carefully at what is NOT SAID- the science - the real understanding of drug behavior. It is simply NOT THERE. And this is how the medical community has been getting their information on how to use drugs, for the last 60+ years! No one teaches how to use drugs WELL or precisely in any medical school I know. They all look to the FDA and the drug companies for guidance, and think that what they get from them and the FDA is gold! 

     The  late night TV lawyers know otherwise. They see the full spectrum of response from this ignorant way of giving these drugs. No wonder they say to call 1-800-BAD DRUG! Why not 1-800-POOR DOC? Or 1-800 DUMB FDA? Look at the FDA. Those who are there now become high salaried consultants for big pharma later. Do you think they will antagonize their future bosses? Look at researchgate and linkedin, and see the trajectories of their lives!

     Big Pharma IS greedy, and their behavior in this regard IS bad. Also, look at the book BAD PHARMA, by Ben Goldacre. You can get it from Amazon easily. Also. I am told that if someone in big pharma tries to oppose their bad behavior, they do not get fired - they-just get put on the list of those to get dropped at the next merger or acquisition.

     Look at the data and judge for yourselves.

Another reason can be the competition between companies and another reason may be the government does not allow companies to reduce their product price.

It is said that for one new drug to reach the stage of Phase III clinical trials, 1000 other molecules fail. And to conduct one such clinical trial it takes thousands of US dollars. thus the patenting pharmaceutical company which plays a monopoly of the new drug would cost it in such a way that it compensates for all other unapproved molecules. I do not think it is greediness, but rather just the cost price of the molecule along with the discovery charges

Here is - IMHO - the last word on the topic. The article is worth reading for Jack Scannell's acerbic wit and style, as well as for the content. What he says reflects my 20+ years' of experience in price negotiations. It also mentions antibiotics. My point being, companies should be rewarded for new antibiotics, but not in a way that incentivises them to promote overuse, be it in humans or animals.

Well said Anna, the concern is also the abrupt and unethical marketing of the antibiotics , and the clinicians are at some point of time rewarded with material things to prescribe in an irrational manner. Though there are existing regulations  to curb this but fails many a times. Having said that the antibiotics is one of the scarce resource in the medication management and its use should be reserved for the right indication.

      Again, IMHO, it is both. There are so many drugs that fail to make it that the great expense must be spread over and covered by the few that make it. HOWEVER, I would again ask you to look carefully at what I said above. The drug industry markets their drugs not to help people but to make money, and to do  it in the simplest way possible, by "one dose fits all" approaches without monitoring. Monitoring is seen as an expense and a hassle instead of what it really is - the opportunity to do it best, and for each, maximizing effect and minimizing risk - not by a blind ritual, targeting the dose for each patient to put him/her in the best possible place on the response spectrum, as we do when we do TDM or follow the INR. Eyes open!

      There are platelet assays that are used for research purposes now which should be used to place each patient in the best spot with the new drugs. They ARE good drugs - but it is the unscrupulous way they are marketed, and the totally illiterate way the medical profession trains physicians to treat patients with drugs that are so tragic. The lawyers laugh all the way to the bank because they get both ends of the extremely wide spectrum of response that people have on such fixed dose regimens. Do you really think that a 100 lb and a 200 lb patient get the same effect from the usual dose of Plavix? Come on. If I took the usual 75 mg/day I would bleed all over the place. So I take it Mon Wed Fri and titrate myself by my razor cuts. It sure would be nice to have a platelet assay in the community and a target response to hit! BAD BAD PHARMA! Expensive - yes. Many failures - yes. Need to spread costs - yes. but NO ONE should have to put up with suppression of data that has to be there about patients, response, and outcome. Again, look at my letter to the editor which came out in the Am. J. Cardiol 2014;113:2086-90. Also, look at the original article by Migliorini et al. referred to in that letter. It is NOT either - or. It is BOTH. That is the problem, The data simply has to be there. IMHO, it simply was not looked for. And you see it throughout, because no medical schools teach students how to do it right. Poor MD's! Poor patients! HAPPY BIG PHARMA! HAPPY LAWYERS! OMG!

Roger has covered a wide array of facts that needs careful considerations. Its very interesting discussion from the fraternity who really cares for the well being of the patients and as well as safety and effective medication management. its the need of the hour.

Drug discovery is labor intensive and extraordinary expensive and needs to pass through different stages and may fail at any stage so when new drug emerge usually 

it will become expensive

Yes, Mohammed, it IS expensive, but stull, decent people behave decently. BIG BAD PHARMA does not. Until they do, I will continue to look out for the patients who suffer from such predatory marketing practices.

ITS TRUE ROGER THAT ETHICAL MARKETING IS THE CORE ISSUE IN MEDICATION'S PROMOTIONS.