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Prescription Drugs cost pennies to produce!
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Kerouactivist
Diamond Member
they should repeal their right to advertise...
health care costs have skyrocketed ever since...
they shouldn't be advertising anyway...
a freaking doctor should decide what medicine you use...
it shouldn't be....
"yeah I saw this commercial for this allergy medicine the other day and this girl was running through fields and look really happy......can you hook me up"...
pharm is coming down to corporate drug pandering
Its bullshit
health care costs have skyrocketed ever since...
they shouldn't be advertising anyway...
a freaking doctor should decide what medicine you use...
it shouldn't be....
"yeah I saw this commercial for this allergy medicine the other day and this girl was running through fields and look really happy......can you hook me up"...
pharm is coming down to corporate drug pandering
Its bullshit
Jeff7181
Lifer
Ya know how you can get a discount? Go through the drive through... order a soda... hand them a dollar and be like "hold on, I have the change" and go rummaging through your glove box or purse if you're a woman, or just a very feminine man, lol. 😀 Eventually they'll say "that's fine, next window please."
rh71
No Lifer
^ they're marketing on television so you, mr. joe schmo, would have heard of the drug and will mention it to your doc. Despite the hatred I have for those ads... especially the laundry list of "possible side effects" they squeeze in there too... I'd say it's working quite well for the pharma industry.
OS
Lifer
God, what the hell kind of idiotic email is this.
Not only must pharmaceutical companies recover the R&D cost of the drug itself, it must also cover the R&D cost of all the other experimental drugs that failed to reach market. For every one new drug that reaches market, there are dozens that fail to do so.
Not only must pharmaceutical companies recover the R&D cost of the drug itself, it must also cover the R&D cost of all the other experimental drugs that failed to reach market. For every one new drug that reaches market, there are dozens that fail to do so.
Everybody pisses and moans over the $120 a month fills of blood pressure and cholesterol drugs. Funny thing is that in an overwhelming majority of those cases it's because of lethargy and apathy on that person's part that even requires them to be on the drugs.
If you want to get really fired up about drug prices - look at some of the critical life saving drugs that are used in chemo therapy and auto-immune diseases that can run upwards of $XX,XXX a singe dose.
How much is your life worth?
For most people they wouldn't even need drugs if they took care of themselves in the first place. For other people when they really need them in a matter of life and death...it's hard to put a price on it. Plus, in those types of drugs the R&D that goes into them is a bit different than you typical mass marketed drug.
If you want to get really fired up about drug prices - look at some of the critical life saving drugs that are used in chemo therapy and auto-immune diseases that can run upwards of $XX,XXX a singe dose.
How much is your life worth?
For most people they wouldn't even need drugs if they took care of themselves in the first place. For other people when they really need them in a matter of life and death...it's hard to put a price on it. Plus, in those types of drugs the R&D that goes into them is a bit different than you typical mass marketed drug.
Googer
Lifer
Here is the cliffs/non-pdf version:
By Robert C. Keefer, PhD
Managing Director,
BioPharma Business Development
www.biopharma-consultants.com
October, 2003
What Ails the Pharmaceutical Market?
Competition, Costs, and Collaboration Ills
THIS LITTLE DRUG WENT TO MARKET
Opinion: This Little Drug Went to Market
THIS LITTLE DRUG WENT TO MARKET
1
The pharmaceutical industry has experienced unprecedented
success over the past two decades, growing steadily to
achieve nearly $40 billion in profits in 2002 and an 18-plus
percent return on both revenues and assets. Such statistics,
however, mask the complicated reality with which drug
manufacturers must contend in order to successfully bring a
drug to market and stay afloat in an increasingly competitive,
regulated and litigious marketplace.
Certainly, consumer demand for new and better prescription
drugs is on the rise?in large part because of the efficacy
that new drugs have displayed in combating complex
diseases?and this trend is expected to continue in the
foreseeable future. Nevertheless, pharmaceutical companies
face an uncertain prospect if they do not find more effective
and efficient ways to address the following underlying
challenges currently plaguing the industry.
Rising R&D Costs. According to Pharmaceutical Research and
Manufacturing of America, an industry association group, only
one in 5,000 screened compounds are approved as a new
medicine. In an attempt to develop and test the relatively few
drugs that actually go to market and produce revenues,
pharmaceutical companies are now spending in excess of $32
billion a year on research and development costs, a three-fold
jump over what was spent in 1990, and an average of $802
million for each new drug that gets to market.
Much of the new spending comes from a striking increase in
the complexity and rigor of FDA regulations, the length of
clinical testing time, and the shortage of new compounds.
Another factor is the high drug failure rate?currently
estimated at 20 percent?during late-stage development.
Moreover, with a drug development process that now takes an
average of 10 to 15 years to complete, drug companies have
to test many more drug candidates in order to successfully
ensure that a few compounds actually make it from drug
discovery to FDA approval and on to the open market.
Although much of the process, such as FDA approval and
clinical trials, is clearly going to take a requisite amount of
time, there are process inefficiencies and redundancies that
needlessly lengthen the journey from laboratory to pharmacy
and do bear a sizeable cost; it is estimated that reducing the
drug development cycle time by a single day reaps a revenue
opportunity of $1 million.
The use of online technologies can help achieve this shorter
cycle by bridging functional and geographic boundaries and
streamlining data collection and collaboration across the entire
drug development lifecycle. Unfortunately, most pharmaceutical
companies have heretofore relied upon Web tools for the
purposes of e-mail communications, marketing, and media
and investor relations?not for process improvement.
Many Eggs in a Few Blockbuster Baskets. Over the past
decade, pharmaceutical companies have increasingly begun
to rely on what is known as the blockbuster drug model,
whereby manufacturers derive the majority of their revenue
from the sales of a few individual patented products. Taken
together, such blockbuster drugs can account for 80 to 90
percent of a company?s annual revenue intake. Lipitor, a
cholesterol-fighting compound, for example, is a major
blockbuster product for Pfizer, and in 2001 accounted for
$6.4 billion of the company?s total $29 billion in sales.
The blockbuster approach, used successfully by the
automobile and movie industries, is relatively new to drug
manufacturing and is, to a large degree, investor-driven.
"The pressure to maintain the existing types of margins
necessary to keep shareholders happy is forcing
pharmaceutical companies to focus their efforts on
developing at a minimum one or two big blockbuster drugs a
year," explains Joe Chimera, PhD, head of the
Pharmaceutical Technology Group for BioSignia, Inc.
For drug manufacturers, this approach is exceptionally risky.
Blockbuster drugs typically go off patent about 10 to 12
years after they enter the market, or they could have their
still-unexpired patents infringed upon by generic products
that meet certain safety and effectiveness requirements (a
scenario allowed for by the Hatch-Waxman Act of 1984).
When either of these events occurs, blockbuster drugs are
forced to either enter the over-the-counter market or compete
with lower-priced generic products, causing pharmaceutical
company revenues to fall suddenly and dramatically.
THIS LITTLE DRUG WENT TO MARKET
2
To keep revenues constant and stock values high, pharmaceutical
companies must ensure that enough potential blockbuster
products are in the pipeline and that an appropriate number are
timed to hit the market just as existing blockbuster drugs are
losing their profitable punch. Drug manufacturers that don?t have
enough promising compounds in the works are now finding it
necessary to buy or merge with other pharmaceutical
companies?as Pfizer recently did with Pharmacia?for the
primary purpose of acquiring a populous pipeline.
The key to having a truly effective and successful drug
development lifecycle is to have the right information
available to the right people at the right time, so they can
make sound decisions about drug efficacy earlier in the
process. If researchers can determine early on which drugs
won?t meet expectations or have a lower chance of surviving
FDA approval and cull them quickly, they can then focus
research and funding on more promising candidates and
also inject replacement compounds back into the pipeline
immediately?thus, always moving the development effort
forward in a robust and consistent manner.
To make this happen, pharmaceutical companies must put in
place a technological environment that enables the free flow
of information and actionable knowledge across the
enterprise and into the hands of the right decision-makers at
the most opportune time.
Global Yet Still Provincial. The industry trend toward
consolidation, as a result of a growing number of mergers
and acquisitions, is making pharmaceutical companies
increasingly heterogeneous and global. Nonetheless, it has
also helped highlight?and aggravate?the industry?s
historically stovepiped culture and technology environment.
Across the business lifecycle, pharmaceutical companies still
have a difficult time collaborating and sharing critical
information between business functions or even departments,
thanks to turf issues, proprietary systems and data and
geography. This environment is one of the major reasons why
pharmaceutical companies grapple with such difficult issues
as process redundancies, time and productivity inefficiencies,
missed milestones, an inability to make smart, timely
decisions on which drugs should go forward in the process,
high percentages of late-stage development failures, and
even problems meeting FDA approval requirements.
To increase their competitive position, pharmaceutical
companies have begun turning to enterprise systems that can
streamline processes and enable information sharing and
collaboration. Unfortunately, many companies remain
stovepiped in their focus, automating and streamlining
functions?such as procurement, finance or individual aspects
of R&D?rather than building a Web-based system that
allows automation, information sharing and collaboration
across the entire drug development lifecycle.
Outdated Sales Practices. Pharmaceutical companies have long
relied on the unique sales model of sending sales
representatives?or detailers?for face-to-face meetings with
physicians for the purpose of encouraging them to prescribe
their medicines as often as possible. Product sales are, of
course, the bottom-line objective of the pharmaceutical industry.
But as industry profit margins have gotten thinner and
competition has swelled, this tactic has become more costly,
counterproductive, and worse, harmful to the pharmaceuticalphysician
relationship. The pharmaceutical industry spent
$17.2 billion last year on sales and marketing, with nearly
half of that spent on detailing. According to a recent article
in the International Journal of Medical Marketing, the number
of pharmaceutical sales representatives employed by the top
40 pharmaceutical companies has more than doubled over
the past several years, jumping from 40,000 in 1996 to
80,000 today?each at an average cost of $63,000 per
year. During that same time, there was only a 15 percent
increase in the number of prescriptions written.
Moreover, physicians?time-strapped and often inundated
with representatives from the same company offering
redundant product information?seem to be losing patience
with the detailing model. Many are now charging
pharmaceutical companies the cost of an office visit?and
sometimes more?as the price for listening to their sales spiel.
More than 40 percent of sales appointments with physicians
are canceled or rescheduled, according to MedNet Media,
and 87 percent of face-to-face conversations with physicians
are less than two minutes in length.
3
Physicians, of course, say that they want?and need?drug
and treatment information from pharmaceutical companies,
but increasingly they also say they want to receive that
information on their own time and at their own choosing.
As an alternative to face time, pharmaceutical companies are
now utilizing online tools, such as e-mail, Web conferencing
and direct physician links on their Web sites. Still, the effort
remains stovepiped, with sales teams typically unable to
coordinate with others and the overall company unable to
know how many sales reps are contacting the same doctor
about the same drug.
Without a centralized, automated mechanism for tracking
physician contacts and sales rep activities, pharmaceutical
companies cannot coordinate their sales activities, control the
content of their message, or plan a targeted, personalized,
effective campaign for each physician.
Restoring Competitive Health
To keep a steady hold on market share and further their
competitiveness and profitability, pharmaceutical companies
are realizing that a systemic cure lies in implementing Web
portals and content management. This technology treatment
will provide the most cost-effective way to eliminate process
and communication redundancies, improve collaboration
across business functions and geographic boundaries, turn
massive quantities of market, scientific and R&D data into
actionable knowledge, and ultimately reduce the amount of
time it takes to get a drug to market.
For example, a portal?which provides one-stop access to
the entirety of a company?s resources and data assets?gives
scientists within R&D the ability to do a single search for a
certain drug under development and find all related content.
Or a global team of R&D experts can meet virtually to make
a mutual judgment on whether to go forward or call it quits
on a questionable pipeline compound.
Web portal technology also enables the use of e-Detailing,
an application that allows pharmaceutical companies to
coordinate, streamline and automate their information
sharing and communication with physicians. This not only
maximizes the sales effort, but by providing the physician
with the right information in the right place at the right time,
it greatly improves the pharmaceutical-physician relationship
and eventually increases prescription sales.
For more on how Web technologies can help the
pharmaceutical industry address its business challenges,
don?t miss the next section in this series, "Curing the Problem:
Enterprise Portals and the Pharmaceutical Industry."
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Publication Date: October 2003. Vignette does not warrant, guarantee, or make representations concerning the contents of this document. All information is provided ?AS-IS,? without express or implied warranties of any
kind including, without limitation, the warranties of merchantability, fitness for a particular purpose, quality and title. Any information provided by Vignette customers or partners was obtained after the implementation of
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Copyright 2003 Vignette Corporation. All rights reserved. Vignette and the V Logo are trademarks or registered trademarks of Vignette Corporation in the United States and other countries. All other company, product and
service names, and brands are the trademarks or registered trademarks of their respective owners.
But at the same time they are totally under the microscope when consumers/doctors fsck up and use a particular drug when they are at risk and shouldn't be using it. The Cox 2 Inhibitor scrutiny as of late (Bextra, Vioxx & Celebrex) put Pfizer in serious financial dire straights.
Fixed.
Advertising budgets command a large percentage of big pharma budgets, and the relaxation of DTC (direct-to-consumer) advertising has a great deal to do with the prevalence of drug commercials EVERYWHERE - TV, radio, in print, and more. The entire "male erectile dysfunction" issue is partially a product of marketing and industry collaboration on the behalf of medical professionals and pharmas.
The bulk of big pharma R&D "research" is taken from either government-funded labs like the NIH, is university-funded (partially funded by industry) or is obtained by buying out smaller labs after these labs have taken on the initial financial risk of developing and researching a drug. Large drug companies don't want to risk shareholder assets by dumping money into a drug (hundreds of millions) and starting the research from scratch only to find it fails.
Combine this with the pharmaceuticals' tie-ins with the FDA and the medical industry and insurers (many "experts" are called to serve on FDA panels to determine the actual safety of drugs are bankrolled by industry as consultants, and physicians are often paid "consulting fees" to attend 'information sessions' which are basically wining and dining of doctors by industry) and you have a bonafide cash cow.
Google: Medicalization
Edit: I should add that these big pharmaceuticals make the most money from so-called "lifestyle drugs," namely those that improve ways of life - Prozac, Lipitor, and Viagra, amongst others. There is very little profit to be made, comparatively, in drugs which may cure illnesses because they do not result in repeat customers being created.
feelingshorter
Platinum Member
good info that should be passed along
Not really, because you seem to be misinformed...
Vioxx is in fact manufacturered by Merck & Co., not Pfizer. While Pfizer's Bextra was withdrawn from the market voluntarily by the company after requests from the FDA, the other Pfizer drug - Celebrex - is still on ther market...
Merck seems to be taking a lot of the heat for the current COX-2 scare but Pfizer's last product has yet to be pulled from the shelves.
Pfizer is not yet in "dire financial straits." Their stock price has taken a bit of a beating over the past six months but they have a fairly large warchest numbering in the billions with an excellent credit rating. No civil action has been taken to date against Pfizer, as far as I am aware.
It's Merck you have to watch out for right now, as far as I'm concerned.
Edit: Pfizer's patent on Lipitor expires in 2007, I believe. They also have a few other drugs whose patents are slated to expire, so there is a bit of uneasiness with respect to future revenue. I'd assume they will be using a wee bit of that cash in the near future for M&A.
imported_Kensai
Lifer
Yes. 🙂
Not misinformed...just off track a bit in a late night alcohol induced haze.
🙂
I know that Merck is about ready to go tits up because of the troubles, but I do recall Pfizer (and it's stock holders) getting really shook up when the Cox-2 scare hit.
And I did know that Pfizer is getting dangerously close to some key patents going up.
As I mentioned in a previous post this is a myth. A fraction of total overhead in big pharma is R&D...the majority of R&D costs are incurred by university research, federally-funded research such as from the NIH or smaller firms, before they are swallowed up by the larger multibillion-dollar multinationals.
Think about it - R&D alone on a drug from scratch is going to costs hundreds of millions, and there is no guarantee you will be able to sell it. Does it make economic sense to risk that much for little or no payoff? Shareholders wouldn't permit it. The best way to approach this would be to cherry-pick the potentially best drugs, and then go from there.
Marketing and non-R&D cost raises the price of drugs, not the research itself.
http://www.namiscc.org/newsletters/July01/DrugPrices.htm
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