June 2007: Pricing Drugs




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Video title: June 2007: Pricing Drugs
Released on: June 01, 2007. © PharmaVentures Ltd
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In This Episode:
    Drug prices are a contentious issue.
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Drug prices are a contentious issue. It appears inevitable that the pressure to reduce prices will come from all governments. Conversely, the cost of getting a drug to market is increasing as regulatory bodies, correctly, demand more efficacious and safer therapeutics. The cost of manufacturing effective drugs, such as biologics, also places further upward pressure on prices. So what is the solution? The industry – and that includes biotechs, pharmas and government regulatory bodies – has for too long focused on the development of better and more effective drugs, and not on the means to improve the way they are tested. If drugs could be proven to be clinically efficacious and safe sooner, and with fewer clinical trial requirements, then prices would drop considerably. This is a huge challenge, and will require considerable spend on disease R&D, and co-operation between different stakeholders. Clearly, it is an area for publicly sponsored initiatives, and some already exist.

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Drug prices are a contentious issue, and one that will not go away. It appears inevitable that the pressure to reduce the price of drugs will come from all governments. Of course, the cost of getting a drug to market is getting costlier as regulatory bodies, correctly, demand more efficacious and safer therapeutics – and even when a drug is approved and on the market, additional monitoring of that drug is increasingly being required. Furthermore, the cost of manufacturing effective drugs, such as biologics, places upward pressure on prices. This means that, if anything, the price of drugs will continue to rise rather than decline. So what is the solution? For too long, we, as an industry – and that includes biotechs, pharmas and government regulatory bodies – have focused on the development of better and more effective drugs, and not on the means to improve the way we test them. If drugs could be proven to be clinically efficacious and safe sooner, and with smaller and faster clinical trial requirements, drug prices would drop considerably. This is a huge challenge: the key question is, who should fund and develop these improvements? Whatever the approach, the process would need to be done in close consultation with government regulatory bodies. “If drugs could be proven to be clinically efficacious and safe sooner, and with smaller and faster clinical trial requirements, drug prices would drop considerably. This is a huge challenge, and the key question is: who should fund and develop these improvements?” There are already some initiatives, for example, the European Commission (EC) has already proposed a partnership called the Innovative Medicines Initiative (IMI) with the European Federation of Pharmaceutical Industry and Associations (EFPIA). A precursor to this was the InnoMed Integrated Research project under the EU Sixth Research Framework Programme for Research, Technological Development and Demonstration (FP6). InnoMed can be considered a pilot project for the IMI, which is part of the EC’s proposal for the Seventh Framework Programme on Research and Technological Development. InnoMed’s wide consortium base is being led by EFPIA and comprises 16 large pharmaceutical companies co-operating with 14 universities and eight small/medium-sized enterprises. IMI’s key objective will be to tackle bottlenecks in the drug discovery process. For more information on this initiative go to www.imi-europe.org A key component of all of this is our basic understanding of the mechanism of disease, so fundamental research is another crucial aspect in the drive to improve drug discovery processes, rather than just the discovery of new drugs itself. Worldwide, in proportion to GDP, the US is still the biggest contributor to publicly funded health R&D. It is no surprise, therefore, that it has the highest density of biotech companies. In the future, will it also be the biggest contributor to improving the efficiency of clinical trials and, thereby, allow drug prices to drop? And, in the end, it will be biotechnology research that will drive the price of drugs down, although this will require considerable spend on disease R&D, and co-operation between the different stakeholders to make it all happen. Clearly, this is an area for publicly sponsored initiatives. -Fintan Walton, Chief Executive Officer, PharmaVentures Ltd.
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