The Value of Drugs and the Standing of Industry – It is Friday, so this is going to be one of those occasions where I am going to claim artistic license and not focus specifically on a matter related FDA activities, but rather on an aspect of the pharmaceutical industry that interests me.
There is a lot said about the pricing of drugs. There is a lot, not said, about the value of drugs and when it is talked about, it is rather brief. That bothers me, because the industry tends to think of things in terms of value. The patient sees things in terms of price. That disconnect causes people to lose faith in the industry. They put pressure on policy makers. That makes headlines that perpetuate the negativity. Right now, public perceptions about the pharmaceutical industry are at an all time low, with standing ranking just above big oil and big tobacco. How can an industry that makes life-saving drugs be just ahead of an industry that sells a product that is so negative to one’s health? How do things turn around?
While some manufacturers have been doing advertisements designed to raise consciousness about value – sometimes containing patient testimonials, ads alone can’t cut it. Price is about money. Value is about feelings.
My partner Joe died in 1987 when we were both 32 years old. Last month, he would have had his 50th birthday.
During the 1980s, having an AIDS diagnosis nearly uniformly meant short-order mortality. Joe was diagnosed in 1985. The only drugs available then were those to treat opportunistic infections, not the underlying cause of AIDS – HIV. Then, on December 7, 1995, the first anti-retro-viral drug was approved and for the first time, patients were able to take a drug that actually helped them by fighting the virus rather than fighting each disease that came with a crippled immune system. Within two years, mortality was half what it had been. All that came to late for Joe who died on June 4, 1987.
The estimated average cost to develop a new drug is approximately $800 million. If we take that figure and apply it to the number of protease inhibitors developed, it comes to approximately $8 billion in development costs. If we add to that the costs associated with the development of Non-Nucleoside Reverse Transcriptase Inhibitors, we add to that another $2.4 billion. The investment price tag for Nucleoside/Nucleotide Reverse Transcriptase Inhibitors is approximately $11.2 billion, for a grand total of $21.6 billion for about 26 different HIV medications.
That is a small price to pay in my mind. In fact, I’d pay 10 times that amount – 50 times that amount – to have been able to celebrate Joe’s 50th birthday with him. The miracle offered by protease inhibitors came too late for us. But hundreds of thousands of people are celebrating birthdays today they otherwise would not have had.
That is what I mean by value.
That is why industry needs to start communicating value in a way that is meaningful to patients.