Wednesday, August 12, 2009

The High Price of Medicine

More money is spent in the pharmaceutical industry on advertising than is spent on research.

- Devra Davis, author of The Secret History of the War on Cancer.

So to reduce the price of medicine, why not restrict advertising? We used to restrict advertising on booze and cigarettes. It seems like a sensible solution to drug costs.

I was listening to Davis in a December 17, 2007 episode of The Current that I downloaded from the CBC podcast site. If I heard her correctly, the average cost of a new drug is $800 million, and half of that is marketing costs. If we want to control the cost of life-saving medicines, we could restrict the costs of the companies that make them.

A counter argument might be that the drug companies advertise because it increases their revenue. It also creates inefficiencies in the system. For example, when the patent runs out on a drug they make a minor change, re-patent it and advertise the hell out of it, trying to make it seem like something new.

I don't know enough about the pharmaceutical industry to argue this completely, but my thinking is... In labor law we have the concept of essential services; why not extend that concept to products? If I am unable to strike because I'm a nurse, why not say that there are also extra sorts of restrictions on the companies that make the drugs nurses hand out? Some life-saving drugs costs thousands of dollars a year, and not everyone has health insurance. In fact, it's a wonder that private health insurers aren't agitating to reduce drug costs. We in Canada have already reduced them by having better bargaining power with drug companies, but drugs are still arguably massively over-priced.

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2 comments:

kirbycairo said...

Excellent, excellent point DIng DIng. We really have to begin to ask ourselves as a culture are the billions of dollars in profits made by pharmaceutical companies appropriate? In certain areas of society where we need to be guided by genuine social needs rather than simply by blind profits. However, pharmaceutical companies have enjoyed some of the highest relative profits in Western capitalism. Something must be done.

kirbycairo said...

Excellent, excellent point DIng DIng. We really have to begin to ask ourselves as a culture are the billions of dollars in profits made by pharmaceutical companies appropriate? In certain areas of society where we need to be guided by genuine social needs rather than simply by blind profits. However, pharmaceutical companies have enjoyed some of the highest relative profits in Western capitalism. Something must be done.