COMMERCIAL DRUG BREAKTHROUGHS
August 10, 2004
The U.S. research-based pharmaceutical industry invests far more than government in the development of drugs, spending about $33 billion annually. This is understandable given the uncertainty of the business, says Henry Miller (Hoover Institution):
- One out of every 5,000 products screened as a possible drug is approved as a new medicine; the others drop out because of concerns of safety, efficacy or profitability.
- About 30 percent of drugs that are approved and marketed produce revenue that recoups research and development costs.
Suggesting that the government should be involved in financing the development of most if not all drugs is pure foolishness, says Miller. Unlike the private sector, government is not driven by cost-effectiveness or the need for profitability. As a result, drug development would be far more costly and inefficient with U.S. taxpayers ultimately footing the bill.
There would also be an inherent conflict of interest in such an arrangement because government agencies would be both the developer and regulator of new drugs, notes Miller.
Source: Henry Miller, "Let's Not Overinflate Basic Research Role in Developing Drugs," Investor's Business Daily, August 5, 2004.
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