ARGUMENTS AGAINST DRUG PRICING CONTROLS
STIFLES DRUG INNOVATION BY ELIMINATING MONETARY INCENTIVE?BUT INNOVATION IS ALREADY STIFLED NOW WITH "COPYCAT" DRUGS
EXAMPLE?"NEW" DRUG VYTORIN FOR CHOLESTEROL IS BASICLLY TWO DRUGS (EZETIMIBE (BRAND NAME ZETIA) AND SIMVASTATIN (BRAND NAME ZOCOR) PUT TOGETHER IN ONE PILL INSTEAD OF TWO SEPARATE ONES (THAT'S DEFINITELY NOT INNOVATION)
NEED TO RECOUP DRUG R&D COSTS?BUT WHAT COST ACTUALLY INCREASED MORE?THE R&D COSTS OR THE COST OF ADVERTISING?
The average cost of developing a new prescription drug has increased to $802 million, more than double the cost in 1987, according to a new Tufts University study released on Nov. 30, 2001, the New York Times reports. According to the study, drug companies spent about $231 million to develop a new treatment in 1987, and if the cost had risen the same as the rate of inflation, the it would have increased to $318 million in 2000. According to Clay O'Dell, a spokesperson for the Generic Pharmaceutical Association, the "suspect" study also "ignores the fact that some of the drug development costs are tax deductible and that some of the research is subsidized by the government through NIH" (New York Times, 12/1).
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However, in less than a decade, direct-to-consumer (DTC) advertising of prescription drugs increased from $55 million (1991) to $1.8 billion (1999).
*Many health policy experts believe DTC advertising drives up drug prices by increasing consumer demand. However, there i ...