Who really pays for Pharmaceutical Research?

  1. From Robert Reich:

    But pharmaceutical companies don't own up to the fact that you and I are already paying twice for new drugs. Not only do we pay high and rapidly-escalating purchase prices for them. We also pay through our taxes. You see, a portion of federal tax revenues goes to support drug research.
    For example, eight of the 10 most popular drugs produced by one of America's largest pharmaceutical companies were developed at the National Institutes of Health, which is a huge taxpayer-funded research complex. Most of today's anti-cancer drugs also have come courtesy of the National Institutes of Health. Drug companies do research and development, of course. But they devote only 12-and-a-half percent of their incomes to it, on average. They spend more than twice that on advertising and marketing. Much of the rest is profit. And drug companies are very, very profitable. During the recent downturn, the nation's top 10 pharmaceutical companies reported a 33 percent increase in profits.

    Food for thought.....
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  2. 23 Comments

  3. by   azhiker96
    Interesting, do you have a proposal to deal with those scoundrels?
  4. by   pickledpepperRN
    Part of the problem:

    1. Pharmaceuticals/Health Products: Long-Term Contribution Trends http://www.opensecrets.org/industries/indus.asp?Ind=H04
    2. Drugmakers go furthest to sway Congress http://www.usatoday.com/money/indust...by-cover_x.htm
    3. How the pharmaceutical industry gets its way in Washington http://www.publicintegrity.org/rx/report.aspx?aid=723
    4. Brand-Name Drug Companies Versus Generics: Lobbying and Campaign Contributions http://www.citizen.org/congress/refo...es.cfm?ID=8045

    Part of the solution:
    Clean Money Elections
    http://www.cleanmoneyelections.org/
  5. by   HM2VikingRN
    Also redefine corporations as legal organizations NOT persons as under current law.
  6. by   ZASHAGALKA
    These 'scoundrels' are providing the drugs that will someday save your life.

    I absolutely want them to have a profit motive to do so.

    And for every 'zantac' that makes billions, those companies have to worry about the 'vioxx' that will cost just as much.

    Can you argue that companies spend too much on advertising? Not in my book. They HAVE to turn drugs into 'megadrugs' to make the profit that shields them from losses.

    You want to lower the cost of drugs. How about some good-old fashion liability reform. . .

    See, part of the problem is that the REST of the world demands these drugs at below development costs and without regard to liability. So, the companies recoup that cost on the American public. But, without a rich profit environment, many of these drugs would simply not be made.

    If company X makes a drug that will save my loved one's life, I'm all for them making out like bandits as a result. Why? Because I WANT them to be thinking about what other drugs they can make that has the same results: life saving for ME and rich enhancing for THEM.

    It's a fair tradeoff. The world is simply NOT a Star Trek utopia. If you ignore human motives, you ignore human result. Communism works great on paper. It fails in reality BECAUSE it doesn't take motivation into account.

    Simply put, I WANT those companies to be motivated to save the life of my loved one with some drug that hasn't been invented yet. . .The reforms you demand will bear a cost.

    Is it a cost you are willing to bear when YOUR spouse or child doesn't have the next miracle drug? That strikes me as incredibly short-sighted.

    It's somewhat hypocritical to suggest that big business is the enemy if YOUR life is being simultaneously enhanced by that big business. And in America, that is exactly the case, in thousands of everyday ways.

    The pharmaceuticals are out to get me, but they are saving my life. Exxon is out to get me, but I can fill up anytime without long lines. Wal-mart is out to get me, but I bought my kids school supplies for dollars cheaper than I otherwise could have.

    If YOU think the pharmaceuticals are 'screwing you' the solution is simple: Don't buy their drugs. But let me suggest that you can argue that you can have your cake and eat it too till the cows come home. . . that's just not how the world works.

    If your argument is that the gov't practically makes these drugs anyway, and I doubt that, then fine: outlaw pharmaceutical companies and live w/ only the drugs that are 'close enough for government work'. But that is a choice you're making, and it comes with steep drawbacks.

    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on Aug 15, '06
  7. by   Shamira Aizza
    And ironically, the people who will criticize the use of tax dollars for pharmaceutical research would say that these folks weren't getting enough tax funding if they were also conducting embryonic stem cell research.
  8. by   pickledpepperRN
    Independent and university based reseachers and doctors in many countries have created medications that prolong and improve the qiality of life:

    Nitroglycerine - http://www.blackwell-synergy.com/lin...0.03240.x/abs/

    Insulin - http://inventors.about.com/library/i...bldiabetes.htm

    Penicillin - http://www.molbio.princeton.edu/cour...f%20Penicillin

    Early infection treatment & prevention - http://www.molbio.princeton.edu/cour...rial%20Agents*

    Early antibiotics - http://www.molbio.princeton.edu/cour...%20Antibiotics

    Diurectics & beta blockers, England and the USA - http://www.medscape.com/viewarticle/421419

    Quinine & malaria - http://www.museums.org.za/bio/apicom...of_malaria.htm
  9. by   ZASHAGALKA
    Quote from spacenurse
    Independent and university based reseachers and doctors in many countries have created medications that prolong and improve the qiality of life:

    Nitroglycerine - http://www.blackwell-synergy.com/lin...0.03240.x/abs/

    Insulin - http://inventors.about.com/library/i...bldiabetes.htm

    Penicillin - http://www.molbio.princeton.edu/cour...f%20Penicillin

    Early infection treatment & prevention - http://www.molbio.princeton.edu/cour...rial%20Agents*

    Early antibiotics - http://www.molbio.princeton.edu/cour...%20Antibiotics

    Diurectics & beta blockers, England and the USA - http://www.medscape.com/viewarticle/421419

    Quinine & malaria - http://www.museums.org.za/bio/apicom...of_malaria.htm
    All older drugs and almost every one based on manipulating substances that already exist in nature.

    I'm glad somebody was able to convert pig insulin into human use. BUT. That is far different than genetically reverse engineering HUMAN insulin. And I have no doubt that even the gov't or gov't sponsored research can strike gold from time to time.

    But, I question the consistency of such efforts. Simply put, when I'm gonna make a 100k in my top of the line research job - whether I find the next miracle or not - then my work is just work.

    If I'm gonna make 100k regardless, and millions if I'm successful, that work, for some, is a consuming drive. I want those looking for my future cures to be sufficiently driven. And, I refuse to hold contempt for those that benefit from such work. EVEN if they benefit grandly.

    And the days growing antibiotics in bedpans (PCN) and of finding new antibiotics in the sewers of Paris (how cephalosporins were found) are over, or, at least, ineffective to meet the challenge of the drug resistant fallout of our war with germs.

    Many of the recent advances in drugs have come from moving away from manipulating natural substance and towards creating chemical compounds from scratch.

    I'm surprised to see the same camp that wants the benefits of highly genetically advanced research such as on embryonic stem cells harken back to the days of PCN and pig insulin as an example of similar 'progress'. Yes, these were indeed 'miracle' drugs.

    But there is a distinct difference between 'finding' a miracle, and creating one wholecloth. And the difference is money and motivation.

    ~faith,
    Timothy.
  10. by   azhiker96
    Although researchers with government grants may find/create new drugs. I don't think they put them through the rigorous testing that is required by the FDA before a drug can be placed on the market. That testing is pretty expensive and time consuming. Those who complain about adverse drug reactions in current drugs also seem to complain when a newly discovered drug (such as antiretrovirals) are not immediately available. Folks against animal testing of drugs are happy to take antibiotics that were tested on animals. Okay, that's my rant for the day.
  11. by   pickledpepperRN
    Quote from ZASHAGALKA
    All older drugs and almost every one based on manipulating substances that already exist in nature.

    I'm glad somebody was able to convert pig insulin into human use. BUT. That is far different than genetically reverse engineering HUMAN insulin. And I have no doubt that even the gov't or gov't sponsored research can strike gold from time to time.

    But, I question the consistency of such efforts. Simply put, when I'm gonna make a 100k in my top of the line research job - whether I find the next miracle or not - then my work is just work.

    If I'm gonna make 100k regardless, and millions if I'm successful, that work, for some, is a consuming drive. I want those looking for my future cures to be sufficiently driven. And, I refuse to hold contempt for those that benefit from such work. EVEN if they benefit grandly.

    And the days growing antibiotics in bedpans (PCN) and of finding new antibiotics in the sewers of Paris (how cephalosporins were found) are over, or, at least, ineffective to meet the challenge of the drug resistant fallout of our war with germs.

    Many of the recent advances in drugs have come from moving away from manipulating natural substance and towards creating chemical compounds from scratch.

    I'm surprised to see the same camp that wants the benefits of highly genetically advanced research such as on embryonic stem cells harken back to the days of PCN and pig insulin as an example of similar 'progress'. Yes, these were indeed 'miracle' drugs.

    But there is a distinct difference between 'finding' a miracle, and creating one wholecloth. And the difference is money and motivation.

    ~faith,
    Timothy.
    Sorry, not my camp. I am pro life. Have never advocated in vitro fertilization or abortion. Cord blood as a source of stem cells may be great. I'm not well educated on this.

    I'm also ignorant as to the miracle cures that wouldn't have been discovered or created if not for the motivation of millions of dollars. Can anyone let me know what they are?

    "Human" insulin originated in Denmark http://www.caerlas.demon.co.uk/insulin.htm

    Some think "human" insulin is no better or even more harmful than beef or pork insulin - http://members.tripod.com/diabetics_world/
  12. by   HM2VikingRN
    I think that Robert Reich's point was really that the basic research is usually paid by government. Taxpayers pay for the basic research through taxes. (The blue sky work that has no obvious or immediate commercial application.) The criticism of PHRMA really comes down to its claims of needing to recoup research costs but that only 12.5% of the company budget is going into drug development and 25% is marketing. Reich was asking the obvious question of why are we as taxpayers allowing the drug companies to make obscene amounts of money when the majority of the science is paid for by the taxpayers.(My interpretation) He was ultimately suggesting that PHRMA profits be based on what was paid for by the company out of its own income. Nobody questions the need for drug research but the level of profit should be questioned. (PHRMA was able to use the medicare drug benefit law to in essence limit governments ability to negotiate group prices for medicare beneficiaries.)
  13. by   SharonH, RN
    Quote from HM2Viking
    I The criticism of PHRMA really comes down to its claims of needing to recoup research costs but that only 12.5% of the company budget is going into drug development and 25% is marketing. Reich was asking the obvious question of why are we as taxpayers allowing the drug companies to make obscene amounts of money when the majority of the science is paid for by the taxpayers.

    Precisely. No one is begrudging them making a profit. But isn't doing research part of the cost of doing business? Why should we foot 87.5% of the cost of their research and they then walk off with billions in profit as a result? That's a pretty sweet deal. It's not like they are then giving away the proceeds of that research.
  14. by   azhiker96
    Quote from SharonH, RN
    Precisely. No one is begrudging them making a profit. But isn't doing research part of the cost of doing business? Why should we foot 87.5% of the cost of their research and they then walk off with billions in profit as a result? That's a pretty sweet deal. It's not like they are then giving away the proceeds of that research.
    We aren't paying for 87.5% of the cost of research. We don't have enough information in this thread to know what percentage of research costs are paid by the companies versus government grants. The information to see if this is a real problem may be out there. I don't know the numbers but do have an idea of how the system works.

    A university researcher submits a proposal to the government. The proposal is approved and funds allocated for research. With good planning and a little luck, the researcher comes up with a new drug. Now who gets the drug? I'm pretty sure the rights to it belong to the government who can then sell those rights to the highest bidder. In many cases what was found still needs more development and certainly needs to go through years of testing before it can be sold.

    I do wish we would limit pharmaceutical advertising. I don't think the general public needs to be inundated with ads for everything.

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