Feds in the Pharmacy

For the past few years, the number of new medications that have been coming to market has been slowing, and drastically.  There’s some competing theories as to why this is, but the federal government is going to launch a new initiative in the form of a program housed within the National Institutes of Health to help get initial research and conceptual work started so that the private sector can take over once a prospective drug is commercially viable.

I have my own theory as to what’s slowing down the rate at which pharmaceutical firms are bringing new treatments to market.  Basically, it’s not that profitable to develop a drug that a patient would take for a few days or a week or so, as opposed to what I call a ‘lifestyle’ drug, such as Propecia or Lipitor or Lexapro.  If have the option of allocating scarce research dollars into programs for something that a patient would take every day, and something that’s taken for only brief periods of time, I know what I’d do were I the head of R&D at Merck.  It’s not necessarily ‘moral,’ but it’s a business decision, and I think it’s the efficient one.  But, in so focusing your research dollars, you’re eliminating a lot of drugs that you could otherwise be researching.  Again, just a hunch, but it stands up to logic pretty well.

I think this is where government can come in and fill in the void left by private markets.  Once a prospective medication shows promise, I would imagine that the government would auction off the rights to it, covering the expense for taking the process as far as they did.  Public-private partnership.  How very Clintonian and centrist.  I think if we see anything new coming out of government for the remainder of the President’s term, it’s going to be largely along these lines.

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One Comment

  1. In addition, there also is the role of generics. Pharma companies know that drugs only have a certain shelf life before generics are introduced and these generics drive the profitability down at a shocking rate. This is good for the consumer, but not for the company that devoted millions in R&D and then in marketing the medication (FDA rules on marketing make for a very expensive venture especially in the initial years). This weighs heavily on Pharma executives as they look at each new venture, which is unfortunate. Many are concerned that if they release a medication that takes several years to gain market traction, that they will not make any significant revenue as the generics sweep into the market.

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