The cost of medicinal products especially in the US is getting to the point where medical care will become a luxury rather than a necessity or need. The high cost associated with healthcare or prescription drug is running amok surpassing past medical costs in history or times preceding this current time. Hence, without factoring in any individual responsibility in terms of a healthy lifestyle, most people’s perception will indicate that pharmaceutical industries are culprit to the unsustainable rise in drug cost. In 1970s,  the United States was similar to other developed countries in terms of health care spending. In 1980, $1,110 per person was spent on health care, which was about 9.2% of gross domestic product (GDP).  In addition, in 1980s, health-care costs in the United States grew faster than any other developed countries to $8,402 per person in 2010. This figure amounts to $2.54 trillion spent on health care, which is about 17.9% of the US total economy (Kliff, 2012). Consequently, the organization for economic co-operation and development’s (OECDs) average cost estimation of health care in developed countries indicated that the US 2010 healthcare cost is twice the OECD average cost (Kliff, 2012).

For this reason, consumer advocates argues that there is an inextricable link between pharmaceutical business strategies and high cost of healthcare or drugs in the US. The public opinion regarding pharmaceutical companies also shows that the public had resentments on the overall strategy that pharmaceutical companies use in producing or marketing pharmaceutical products. Thus, If only 10-20% of all medical procedures performed in the US have been proven to be effective, it may indicate that there is still long way to go to achieve the type of quality of life(QOL) and outcome reach that most people anticipated from the high cost of healthcare products (Whitmore, 2004). In addition, most experts indicated that the flaws of pharmaceutical clinical trial (CT) on QOL is that CT focuses more on safety and efficacy studies rather than an outcome reach studies (evaluation based on the increase in survival rate, reduction in morbidity, increase in QOL) (Whitmore, 2004).

In this regard, an outcome reach studies must provide benefits that justify the cost of the product in question (Whitmore, 2004). The lack of an outcome reach studies is apparent with most me-too drugs which had neither additional benefit nor safety net with any other comparative drug in the market. This types of flaws in scientific clinical trial design makes consumers wonder why the drug in question cost so much in the first place. Furthermore, the actual cost of producing a new pharmaceutical product is still not very clear. This type of business strategy   is inherent with many company. However, it did fit well with pharmaceutical companies when it comes to public opinion.

Many experts reiterated based on available reviews and calculations that development of NCE does not cost $803 million or $1 billion (Herper, 2012). The cost for phase I clinical trial (1.5years) is about $10 million. The phase II clinical trial for 1-2 years costs about $20 million, and the multisite phase III (3.5 years) were estimated to cost between $50-100 million (Ng, 2009). The upper limit of this estimated clinical trial cost is $130 million. Less than 10% of revenue from a NCE is re-invested in R & D by most pharmaceutical companies (NG, 2009). Therefore, regulation fees (less than 1 million) per product, R&D, and other contract fees must add up to $670 million which is hard to comprehend.  So, where are all the other ghost-costs attributed to? Marcia Angell calls it an “opportunity cost”(profit they will generate if they invest the same amount) (Meredith, 2005).

According to Marcia Angell, most expensive and NCE drug innovation cost only $403 million (Meredith, 2005). She also indicated that pharmaceutical companies doubled the actual cost of a NCE to $802 million by adding an “opportunity cost”. In addition, she indicated that the pharmaceutical company’s cost version of producing a medicinal product does not account for tax deductions and tax credits (Meredith, 2005). This kind of business behavior within companies entrusted with a greater confidence in generating transparent data to support and justify their claims both financially and scientifically, historically lacks the credibility to be trusted.

Science discoveries and evolution of technologies are interdependent and inextricable. For instance, it took centuries to identify the cause of cholera, 2 years to identify the cause of AIDS and about 2 weeks to identify the cause of severe acute respiratory syndrome (SARS) (Whitmore, 2004).  Reasonably, one will expect that time is money and with the decrease in time needed to scientifically identify disease causes down to genetic composition due improvement in technology, reduction in costs associated with R & D will be attainable.

Finally, for medical product industry to improve its public image they must be totally transparent in both the actual cost of their product development and scientific data generated to support their product claims. In other words, they must avoid by all means any form of ghostwriting, conflict of interest or undue influence to mention but a few (Singer, & Wilson, 2009).

References

Herper, M. (2012). The Truly Staggering Cost Of Inventing New Drugs. Forbes. Retrieved from http://www.forbes.com/sites/matthewherper/2012/02/10/the-truly- staggering-cost-of-inventing-new-drugs/.

Kliff, S. (2012). The history of health-care costs. Retrieved from http://www.washingtonpost. com/blogs/wonkblog/post/health-care-cost-growth-flat-in-2010/2012/01/09/g IQAe5h FmP_blog.html.

Meredith, P. (2005). The truth about drug companies: How they deceive us and what to do about it. Retrieved from http://www.motherjones.com/politics/2004/09/truth-about-drug- companies.

NG. R. (2009). Drugs: From discovery to approval (2nd ed.). Hoboken, NJ: Wiley-Blackwell.

Singer, N., & Wilson, D. (2009). Medical editors push for ghost-writing crackdown. The New York Times. Retrieved from http://www.nytimes.com/2009/09/18/business /18ghost.html? scp=3&sq=medical%20journal%20ghost%20writer&st=cse

Whitmore, E. (2004). Development of FDA-regulated medical products: Prescription drugs, biologics, and medical devices. Milwaukee, WI: ASQ Quality Press.