The Fiction Behind the Cost of New Drugs

Merrill Goozner

Published 2/16/12 in The Fiscal Times

The drug industry usually defends the high price on drugs – the latest cancer therapies are tipping the scales at $100,000 a year – by pointing to the large sums it spends on research and development. It is true that drug firms spend alarger share of their revenue on R&D than most other industries, typically anywhere from 15 to 20 percent of sales. And Eli Lilly ran a Super Bowl ad claiming the cost of developing a new drug has now risen to more than $1.3 billion.

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Same Old Stories for the Drug Industry

Merrill Goozner

First published 3/7/11 on Gooz News

Two stories in the New York Times over the weekend told readers nothing new about the drug industry. The first, on Sunday, revisited the two-decade-old, reimbursement-driven trend among psychiatrists to prescribe drugs instead of engaging in talk therapy. The second, this morning, reminds readers that expiring patents on blockbuster drugs like Pfizer’s Lipitor will cost the industry about $50 billion or around 16 percent of its revenue next year. There goes research and development, the story suggests.

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