|
|
|
|
|
|
|
There is also a series of recent court decisions that preclude individuals from maintaining lawsuits against device manufacturers on any grounds [47]. |
|
|
|
|
|
|
|
|
Medical malpractice or provider practice tort reform without product liability reform would shift the cost of litigation and liability solely to manufacturers and suppliers at the expense of health care innovation. Tort reform, including medical malpractice and product liability reform, could save more than $35 billion over a five-year period, according to a report by the National Medical Liability Reform Coalition [48]. Our current product liability and malpractice laws cause significant waste and add billions of dollars to the cost of drug development and health care. Tort reform could help to stop the siphoning of funds necessary for innovative drug development. |
|
|
|
|
|
|
|
|
III. The Impact of Cost Containment on Drug Development |
|
|
|
|
|
|
|
|
Although pharmaceuticals represent only a small part of total health care costs, they have not escaped cost containment efforts for several reasons: (a) the industry has given the image of high profitability, (b) pharmaceuticals enjoy a protected and financially secure market (covered by public or private insurance), and (c) pharmaceuticals are easily identifiable in health care accounting, making intervention easy. Cost containment measures within and outside the industry have led not only to significant changes in new drug development but in a major restructuring of the pharmaceutical industry. New drug development plans aim to reduce redundancy and shorten timelines while capturing the socioeconomic data needed for rapid regulatory approval and effective product launch. Society is demanding more comparative information about pharmaceuticals. Pharmacoeconomic analysis and quality-of-life research has been used in setting price, gaining access to managed care providers, and demonstrating cost advantages. Insurers have focused on a two-pronged approach to cost-containment: utilization controls and containing prices. |
|
|
|
|
|
|
|
|
The cost of drug development for a new chemical entity has risen to over $200 million, with an increase in average R & D investments from 11.3% of sales in 1975 to more than 16.7% in 1993 and 18.8% in 1994 (Figure 1) [49,50]. However, this also reflects the fact that sales fell even more than research budgets. Also, individual companies have stated that they will actually be decreasing their R & D budgets (Figure 2). The process of new drug development has become longer and more regulated (Figure 3). A recent study has shown that while priority drugs were approved in half the time as standard drugs, they spent 68% longer time in the development stage. The result is that the total time spent for developing, testing, reviewing, and approving priority drugs exceeded the time spent for standard drugs [51]. Aggregate R & D budgets |
|
|
|
|
|