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drug development is cumbersome, lengthy, and fearfully expensive. The time from discovery to marketing has doubled in the last 30 years, owing to excessive regulatory requirements, the changing state of the art, and human error and inefficiency. |
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The traditional pharmaceutical companies have been profitable but, in an environment of high risk, they have plowed back into research a higher percentage of their profits than any other industry. Today, there is a tendency to retreat somewhat on this philosophy, and the threats of Congress to cut NIH funds and funding for grants pose the possibility of grievous harm to the unmatched nonindustrial U.S. research establishment, which has in the past contributed important scientific building blocks to the drug development process. |
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The drug industry is under attack worldwide as being excessively profitable, and cost containment efforts in country after country are often directed at pharmaceutical expenditures, even though drugs are generally considered the most cost-effective form of therapy, and drug costs constitute a small percentage of any country's total health care budget. |
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How profitable should the drug industry be? I have no magic number to propose, but it seems obvious that a company must be profitable enough to justify investment in a risky, lengthy, and expensive process. Turning the drug industry into a public utility would likely lower the cost of those drugs already available, but would represent a cruel blow to the hopes and prayers of all those suffering from diseases now essentially untreatable. |
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The new biotechnology industryperhaps 1300 companies in the United Statesfaces special problems. Few of these companies are currently profitable, and many will disappear from the scene because their venture capital will all be spent before any product makes it to market. Absorption by traditional pharmaceutical companies will at least temporarily salvage some biotech firms, but many others seem doomed, despite the enormously exciting promise of the field. |
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Health care reform is in the wind, and great changes are being made, even in the absence of Washington-imposed schemes. Managed care, capitation-based reimbursement, and the need to contain health care costs would seem to lead inevitably to certain changes. Needless drug prescribing, like unnecessary lab tests, x-rays, or surgery, is a rational target. But the fat in health care is finite, and the ability of science to come up with new drugs, new devices, new vaccines, new tests, new organ transplants, and new orthopedic joint replacements seems limitless. Some of these advances will save money, but many will not, even though they prolong life or improve its quality. If an arbitrary percent of gross national product is set as a cap on health care expenditures, rationing would seem inevitable. Indeed, we already see it in the Oregon Medicaid program, where it was deemed more appropriate (given a fixed budget) to spend money on pediatric vaccines than on a liver transplant for a chronic alcoholic. |
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