Though they cost an arm and a leg, prescription drugs reduce overall spending on medical care. Although this may sound strange, the explanation is quite simple. Like medical care, drugs cost money to develop and distribute, however, the lasting effects are beneficial.
Here are a few facts you should be aware of:
vResearch/development for a prescription drug takes 10-15 years to complete.
vOf every 5,000-10,000 compounds tested, only 5 make it through clinical trials.
vOf these 5, only 1 makes it through FDA review.
TuftsUniversityCenter for Study of Drug Development found that it takes around $1.3 billion to bring a single drug to the shelf, and on average, only 2 in 10 drugs earn enough to cover the cost of research and development. Thus, a company must recoup when finding a successful drug.
Today, we face the threat of government implemented price controls on prescription drugs. Though this may sound appealing, there are some facts we must consider. Research and development can only take place because of the funding provided by investors. If pharmaceutical manufacturers are forced to sell their products at a price below market value, the investment becomes less attractive. Therefore, research and development subsides, limiting innovation.
There must be some disconnect though in the thought process of the current administration: we constantly hear that we must encourage innovation, yet this is from the same mouth that would like to implement price controls.
Consider these facts:
vOver the past decade, life expectancy has risen to an all time high.
Men: 75.4 years Women: 80.7 years
vNearly 350 new medications have been developed to treat strokes, disease, diabetes, cystic fibrosis, cancer, and other chronic conditions.
vToday, there are more than 2,700 new drugs for 5,000 different conditions providing HOPE (not Obama’s kind) to millions with heart disease, cancer, Alzeiheimer’s, etc.
From 1971 to 2003, the number of cancer medications tripled. In fact, the U.S.leads the world in treating cancer according to a 2008 study published in The Lancet Oncology. Additionally, Americans have a better survival rate for 13 of the 16 most common cancers.
All of this is because of research and development. i.e. innovation. President Obama is right; we MUST encourage innovation to thrive as a society. However, price controls are NOT the answer.
True: Prescription drugs are not cheap.
False: Overall medical costs skyrocket because of them.
All facts and figures taken from studies cited in The Top Ten Myths of American Health Care: A Citizen’s Guide by Sally C. Pipes. I strongly urge you to read this book.
True or False: High drug prices drive up health care costs.
Part 2
Though they cost an arm and a leg, prescription drugs reduce overall spending on medical care. Although this may sound strange, the explanation is quite simple. Like medical care, drugs cost money to develop and distribute, however, the lasting effects are beneficial.
Here are a few facts you should be aware of:
vResearch/development for a prescription drug takes 10-15 years to complete.
vOf every 5,000-10,000 compounds tested, only 5 make it through clinical trials.
vOf these 5, only 1 makes it through FDA review.
TuftsUniversityCenter for Study of Drug Development found that it takes around $1.3 billion to bring a single drug to the shelf, and on average, only 2 in 10 drugs earn enough to cover the cost of research and development. Thus, a company must recoup when finding a successful drug.
Today, we face the threat of government implemented price controls on prescription drugs. Though this may sound appealing, there are some facts we must consider. Research and development can only take place because of the funding provided by investors. If pharmaceutical manufacturers are forced to sell their products at a price below market value, the investment becomes less attractive. Therefore, research and development subsides, limiting innovation.
There must be some disconnect though in the thought process of the current administration: we constantly hear that we must encourage innovation, yet this is from the same mouth that would like to implement price controls.
Consider these facts:
vOver the past decade, life expectancy has risen to an all time high.
Men: 75.4 years Women: 80.7 years
vNearly 350 new medications have been developed to treat strokes, disease, diabetes, cystic fibrosis, cancer, and other chronic conditions.
vToday, there are more than 2,700 new drugs for 5,000 different conditions providing HOPE (not Obama’s kind) to millions with heart disease, cancer, Alzeiheimer’s, etc.
From 1971 to 2003, the number of cancer medications tripled. In fact, the U.S.leads the world in treating cancer according to a 2008 study published in The Lancet Oncology. Additionally, Americans have a better survival rate for 13 of the 16 most common cancers.
All of this is because of research and development. i.e. innovation. President Obama is right; we MUST encourage innovation to thrive as a society. However, price controls are NOT the answer.
True: Prescription drugs are not cheap.
False: Overall medical costs skyrocket because of them.
All facts and figures taken from studies cited in The Top Ten Myths of American Health Care: A Citizen’s Guide by Sally C. Pipes. I strongly urge you to read this book.
