WHY ARE PRICES SO HIGH?

WHY ARE MEDICINE PRICES SO HIGH?

1. We're negotiating with a blindfold on.

Every year we hear more and more reports of the incredibly high prices we're paying for new medicines—but these are just the ones we know about.

Pharmaceutical companies regularly demand to negotiate prices for their products in secret so they can charge different prices to different customers without ever being caught out.

They even force governments and hospitals to sign confidentiality agreements to stop them from telling taxpayers how much we paid them for the medicines. 

But what we do know is this:

  • We spent €1,700,000,000 providing some of the most expensive drugs to 147,000 patients in 2014. On average, that’s €11,564 per treatment.
  • Some medicines are even estimated to cost four to five times that. For example:
    • €54,000 per patient for Pertuzumab (breast cancer)
    • €52,000 for a 12-week treatment of Sofosbovir (for Hepatitis C)
    • €50,000 per patient for Nivolumab (lung cancer)

The Zorg Institute Nederland have even reached the point that they're recommending that we refuse to pay for some new medicines because the price is so high.

Soon enough, it might not even be a choice, with the Nederlandse Vereninging Ziekenhuizen warning that if nothing changes, hospitals simply won’t have enough money to pay their medicines bill.

We can’t let this happen.

Take action: Tell our politicians that you support them getting a fair and transparent deal for new medicines.  

 

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2. The industry won’t tell us the true cost of research and development of new medicines.

Pharmaceutical companies say that prices for new medicines are so high because the costs of researching and developing them are so substantial.

But just how substantial are these costs? The industry doesn’t want us to know. Some companies claim that it costs US$1 billion for each medicine. But even the CEO of GlaxoSmithKline (one of the largest global pharmaceutical companies) called that figure “one of the greatest myths of the industry”.

So much how does it really cost? One organisation that is open about its research and development costs is the Drugs for Neglected Diseases Initiative (DNDi). They say it costs them €100–150 million to research and develop a new medicine. That’s a far cry from US$1 billion!

But it comes down to this: if the industry really is spending so much on research and development, why won’t they show us? 

Take action: Tell our politicians that the pharmaceutical industry should tell us the truth about their research and development costs.

 

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3. We’re paying twice for our medicines.  

You wouldn’t know it by seeing the prices we're paying for new medicines, but did you know that over 30% of global spending on health research and development is publicly funded? In fact, the public sector spent $72 billion in research grants and other funding in 2009.

A large share of that public funding is invested in basic, early-stage research that is essential to making new discoveries in medical science. But because of its nature, it’s also the riskiest phase to invest in because of the high rate of failure. 

But even though we take a lot of the risks, pharmaceutical companies then get to pick and choose the most promising research, register it for a patent under their name, and charge it back to taxpayers by demanding an exorbitant price for new medicines—a price that doesn’t reflect the level of public contribution to its development.

It’s no wonder the pharmaceutical industry is the most profitable in the world.

It’s time to remind the industry that we’ve already paid for our medicines. We don’t want to do it twice.

Take action: Tell our politicians that you want a better deal for our investment in developing new medicines.  

 

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