Thursday, June 17, 2004
The true value of prescription drugs
[Conrad F. Meier, "Medicines Are Worth The Price We Pay," Health Care News, The Heartland Institute, 1 June 2004.]
As Health Care News editor Conrad Meier points out in this column, while prescription drugs may only cost pennies to produce, much more goes into the final price than simply the costs associated with running an assembly line. This is even more so the case when the research-intensive nature of prescription drugs is taken into account. Add to this a high demand for their life-enhancing properties, and certain pills can become quite pricey. Does that mean that consumers are getting cheated out of something, though?
Companies fund research on future medicines and improvements to existing medicines with revenues from medicines currently in the marketplace. On average, and according to annually published shareholder data, one dollar out of every five earned in revenue is reinvested back into research and development.
Pharmaceutical companies are currently working on more than 1,000 new medicines--for Alzheimer's, stroke, cystic fibrosis, arthritis, and many other diseases. For cancer alone, more than 400 medicines are in the pipeline.
Focusing too narrowly on cutting the cost of prescription drugs may cause us to lose sight of their real and future value.
It's not always possible to put a price tag on the value of pharmaceuticals, but experts and patient organizations have calculated the cost of leading diseases. As the population ages, the costs of caring for people with these and other diseases yet unknown will escalate--unless we come up with more cures and better treatments.
Every government proposal that impacts health care policy should be judged carefully on whether it would nurture or hurt the environment needed to continue the remarkable progress brought about by drug research.
[Conrad F. Meier, "Medicines Are Worth The Price We Pay," Health Care News, The Heartland Institute, 1 June 2004.]
As Health Care News editor Conrad Meier points out in this column, while prescription drugs may only cost pennies to produce, much more goes into the final price than simply the costs associated with running an assembly line. This is even more so the case when the research-intensive nature of prescription drugs is taken into account. Add to this a high demand for their life-enhancing properties, and certain pills can become quite pricey. Does that mean that consumers are getting cheated out of something, though?
Companies fund research on future medicines and improvements to existing medicines with revenues from medicines currently in the marketplace. On average, and according to annually published shareholder data, one dollar out of every five earned in revenue is reinvested back into research and development.
Pharmaceutical companies are currently working on more than 1,000 new medicines--for Alzheimer's, stroke, cystic fibrosis, arthritis, and many other diseases. For cancer alone, more than 400 medicines are in the pipeline.
Focusing too narrowly on cutting the cost of prescription drugs may cause us to lose sight of their real and future value.
It's not always possible to put a price tag on the value of pharmaceuticals, but experts and patient organizations have calculated the cost of leading diseases. As the population ages, the costs of caring for people with these and other diseases yet unknown will escalate--unless we come up with more cures and better treatments.
Every government proposal that impacts health care policy should be judged carefully on whether it would nurture or hurt the environment needed to continue the remarkable progress brought about by drug research.
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