A high price for profit making in the legal drug business

I don’t think it will surprise many people that our pharmaceutical companies are out to make a sustainable profit. You can glean this quite easily from the many commercials on TV and the internet around creating a new disease, so that a drug can be prescribed to remedy it. The key catch for them is they want you to take this drug for the rest of your life. As a business person, I understand all of this, but there is a concern beyond this modus operandi, which is highlighted in the attached article. Antibiotics drug development is now being overlooked as it is not profitable. Why? The antibiotic cures what ails you in a reasonable short order.

http://www.streetinsider.com/Press+Releases/Antibiotics+are+a+Financial+Disaster%3B+CBCD+Proposes+a+Governmental+Agency+for+the+Development+of+New+Antibiotic+and+Antiviral+Drugs/8912338.html

From this article, a quote from an earlier study done in 2007 is referenced:

“Antibiotics have a lower relative rate of return on investment than do other drugs. Antibiotics are short course therapies that cure their target disease, and, therefore, are typically taken for no more than 2 weeks. In contrast, chronic diseases are treated with non-curative therapies that suppress symptoms and are required to be taken for the life of the patient. Ironically, antibiotics are victims of their own success; they are less desirable to drug companies and venture capitalists because they are more successful than other drugs.” This is according to a study published in the journal, Clinical Infectious Diseases which was reported on the news recently

The high price we pay, though, is far greater than the recurring costs of drugs we take to placate our real and exaggerated woes. The high price is the bad bacteria that can infest our bodies finds a way to become immune to the current arsenal of antibiotics. Remembering Jeff Goldblum’s character from the movie “Jurassic Park,” he said “nature finds a way.”  So, while we have always been vigilant about developing new strains of antibiotics, we must continue the fight or nature will find a way around our efforts. Yet, that is now challenged because there is more money to be made investing in drugs that customers need to take the rest of their lives.

I cannot think of a better example of a reason why we must have government investing with private industry for a common purpose. US history has been filled with successes of joint government/ private investment. In Thomas Friedman and Michael Mandelbaum’s book “That Used to be Us: How America fell behind in the World it Created and how it can come back,” they note the role government investment has played over time in our success leveraging private and venture capital dollars or where a business or industry could alone not support the infrastructure start-up costs. This lesson has been borrowed by others and yet we have some who are challenging this paradigm here. Those folks need to read Friedman and Mandelbaum’s book regarding how we got here.

For those who say let the markets be unfettered, the drug companies would continue down the path of investing in a greater ROI making drugs to sell recurringly. They make more money selling the various colored pills to a drug-friendly customer base. Yet, we have to co-invest in antibiotic drugs for the greater good. Some might argue, an enterprising company could develop and sell the antibiotics, yet the cost to the public for each dosage would be very high out of necessity. Plus, the process has to continue, as every time a new antibiotic is created, nature fights back. So, the company’s ROI would not stand up by itself for shareholders and needs incentive from a central source.

So, the idea championed in the attached article draws from our history and suggests government investment to make sure we have antibiotics that will keep us alive. This is one area where we do not want to go back in time, as preventable infections would no longer be preventable and many would die. This issue is very real and we need to heed the calls to action.

Advertisements

4 thoughts on “A high price for profit making in the legal drug business

  1. Nature does have a way, and when it comes to bacteria, there are more strains showing up every day for which there is no known drug to counteract them. This is the fault of patients seeing the doctor for a common cold and demanding an antibiotic. As my wise Dr used to always say, “I can give you an antibiotic, and you’ll be over your cold in two weeks, or you can fight it naturally, and you’ll be fine in 14 days.”

    We have become so used to having an answer for everything, that we feel cheated without some action for every event in our lives.

    Great post

    • Thanks Barney. Wise doctor. Need more like him/ her. There was a doctor on the coast who had fewer prescriptions than the norm by far and the insurance companies’ doctors asked why. She knew patients wanted a prescription to be deemed served. So, she would tell them – it will probably clear up in a week, but if it does not, here is prescription that you can fill then. The condition usually cleared up and the Rx went in the trash.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s