Everywhere in the press, there is another comment about drug prices being too high. We’ve heard 8 out of 10 Americans believe that drug prices are too high and according to the Wall Street Journal, pharmaceutical drug prices rose 9.8% over the past year when food prices have risen by only 2.8%. Is there another side to the story? When looking closer at the healthcare economy at large, could this be justified?
This argument has a very human component. Especially when we hear of people having great struggles because they can’t afford their medication. Those cases do exist. At the same time, there is a significant amount of information out there that just isn’t well known. And when we’re talking about an industry that only accounts for about 10% of the total spending of healthcare, yet accounts for most of the innovation and life extension of humans, the positive really do outweigh the negative.
Aside from those arguments about the high costs of medications, let’s take a look at what this industry really does for humankind.
1. Medicines transform the treatment of diseases and disorders
Our medical future is even brighter. Today, there are about 600 treatments in development for cardiovascular disorders, 1,800 for cancer, and 1,300 for neurological disorders. Medicines will continue to transform the treatment of diseases.
2. Developing new treatments and cures is a vital but very risky business
On average, it takes more than 10 years and $2.6B to research and develop (R&D) a new medicine. To put this into perspective, it costs more to bring two drugs to market now than it cost to build the 104 story Freedom Tower in New York City which is the world’s most expensive office tower.
3. Medicines provide critical savings to the U.S. Healthcare system
According to the IMS Institute for Healthcare Administration, if medicines are properly used, it would save the health care system $213 billion annually. If patients with congestive heart failure improve their adherence to the CHF medications, it will save $22 billion over a 10 year period. And according to the Alzheimer’s Association, if our researchers develop just one new medicine that delays the onset of Alzheimer’s disease by just 5 years, it will save the healthcare system $367 billion.
4. Medicines are not the main driver of premium increases
Medications only account for about 10% of all healthcare costs. 56% of premium increase is due to hospital and professional costs. Medicines are an easy political target because it’s the portion of healthcare that patients see every day.
5. The biopharmaceutical sector is the single largest funder of business research and development in the U.S.
Almost 1 out of 5 revenue dollars is spent on R&D. And before you know it, the product becomes generic. According to IMS Health, nearly 9 out of 10 prescriptions today are for generic products. So those incredible, life-saving cardiovascular products developed in the 1990s that seemed ridiculously expensive at that time, now save more lives and only cost a few dollars per prescriptions.
There are patients out there who have gone bankrupt because they’ve needed life-saving drugs. I feel for these individuals. Everyone should be able to access life-saving medications. All ethical biopharma companies with whom I work offer patient access programs to help fill the gap for those needing help. So patients should ask their doctor to put them in touch with the manufacturer if they cannot afford their medicine.
We all know that this business is highly complicated and risky, but the intentions are largely good even though there are a few bad players who are purely motivated by money. But this is certainly not the norm. What I know is that my colleagues in this business are universally focused on making a difference in someone’s life. Whether it’s a researcher targeting a complex rare disease, a marketer developing a program that will bring healthcare professionals together to educate, or a salesperson who’s providing a forum for local practitioners, this is an industry of tremendous individuals who care about the patients they serve.
