Tuesday, August 31, 2004
Profits and investments
[Henry I. Miller, "Fighting Disease Is Only Half the Battle," The Wall Street Journal, 25 August 2004.]
In this column, Miller counters yet another claim that the pharmaceutical industry is reaping "excessive profits" and needs to be regulated as a public utility:
In "The Truth About the Drug Companies," Marcia Angell, a lecturer at the Harvard Medical School and a former editor of The New England Journal of Medicine, joins the fray. She accuses the drug industry of profiteering, of making itself "a marketing machine to sell drugs of dubious benefit" and of using "its wealth and power to co-opt every institution that might stand in its way, including the U.S. Congress, the FDA, academic medical centers, and the medical profession itself." She believes that the industry "feeds off the NIH" and that new drugs "nearly always stem from publicly supported research." She blames the industry, "corrupted by easy profits and greed," for the paucity of genuinely innovative and affordable new drugs.
How persuasive is she? In 1999, the National Institutes of Health investigated whether its research funding commonly leads to the development of new drugs, the profits from which taxpayers might be entitled to share. Of 47 drugs that had earned revenues of $500 million or more, NIH support had figured significantly in only four.
Dr. Angell's denunciation plays down the drug companies' huge investments in research and development. The research-based pharmaceutical industry (that is, excluding companies that make generic drugs) currently spends upwards of $33 billion annually on R&D, investing a far greater percentage of sales (17.7 percent) in research and development than any other industrial sector, including electronics (6 percent), telecommunications (5.1 percent), and aerospace (3.7 percent).
[Henry I. Miller, "Fighting Disease Is Only Half the Battle," The Wall Street Journal, 25 August 2004.]
In this column, Miller counters yet another claim that the pharmaceutical industry is reaping "excessive profits" and needs to be regulated as a public utility:
In "The Truth About the Drug Companies," Marcia Angell, a lecturer at the Harvard Medical School and a former editor of The New England Journal of Medicine, joins the fray. She accuses the drug industry of profiteering, of making itself "a marketing machine to sell drugs of dubious benefit" and of using "its wealth and power to co-opt every institution that might stand in its way, including the U.S. Congress, the FDA, academic medical centers, and the medical profession itself." She believes that the industry "feeds off the NIH" and that new drugs "nearly always stem from publicly supported research." She blames the industry, "corrupted by easy profits and greed," for the paucity of genuinely innovative and affordable new drugs.
How persuasive is she? In 1999, the National Institutes of Health investigated whether its research funding commonly leads to the development of new drugs, the profits from which taxpayers might be entitled to share. Of 47 drugs that had earned revenues of $500 million or more, NIH support had figured significantly in only four.
Dr. Angell's denunciation plays down the drug companies' huge investments in research and development. The research-based pharmaceutical industry (that is, excluding companies that make generic drugs) currently spends upwards of $33 billion annually on R&D, investing a far greater percentage of sales (17.7 percent) in research and development than any other industrial sector, including electronics (6 percent), telecommunications (5.1 percent), and aerospace (3.7 percent).
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