NCPA - National Center for Policy Analysis

Consider The Cost Of The Disease

December 14, 1998

Some consumer advocates complain about the high cost of prescription drugs. But officials of pharmaceutical companies point out that the successful research, development and marketing of new cures cuts down enormously on the cost of the associated disease.

  • A recent study of AIDS cases revealed that the introduction of combination drug therapy led to a 39 percent reduction in admissions, 44 percent reduction in bed days, 54 percent reduction in serious HIV-related illnesses, a 40 percent reduction in the death rate and a 42 percent reduction in the rate of patients developing AIDS.
  • When new drugs ended the building of iron-lung centers for polio sufferers, the indirect cost savings were as much as $31 billion.
  • Before antibiotics, tuberculosis patients spent three to four years in a sanitarium -- which would cost more than $70,000 a year today -- with a 30 percent to 50 percent likelihood of death.
  • Experts report that since 1965, innovative medications have helped cut deaths from emphysema by 57 percent and deaths from ulcers by 72 percent.

Advances in pharmaceuticals not only help patients to lead more normal lives, they lower overall treatment costs, health-care economists point out.

Source: Richard Jay Kogan (Schering-Plough Corp.), "Do Drugs Cost Too Much? Consider the Alternatives," Wall Street Journal, December 14, 1998.


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