Economy: The Price Of Life - Or: Why Are Pills So Ridiculously Expensive?

 

(Drivebycuriosity) - How much would you pay to live some decades longer? This is not a theoretical question. There is now a debate about the price for Sovaldi. This drug can cure Hepatitis C, a liver disease that causes a lot of pain and often premature death. The drug has a catch, one pill costs $1,000, the whole treatment which cures Hepatitis C totally costs around $84,000.

The high price causes a lot of critic, some call the costs as "completely unreasonable", reports the New York Times (nytimes). But I reckon that the critics ignore that the pill otherwise saves the high costs of years long treatments, including expensive hospital stays, in some cases the pill spares liver transportations which easily cost much more than $84,000. And the cure often expands the life of the infected significantly and raises the life quality of the patients and their families.

The critics also ignore that drug companies have to invest a lot of money and take high risks to develop a new pill. Every pill on the US market has to be approved by the Food and Drug Administration (FDA) who requires a painstaking process of clinical trials which could last years and cost millions of dollars. Usually a new pill has to run through 3 test phases. Each phase could be the end of drug development (sudden death) if the new pill has  too strong side effects - real or alleged - or other risks.

A pill who "survives" the clinical test program has to reward the drug company for taking risks and to compensate for those drugs who didn´t make it. The Oscar awarded movie "Dallas Buyer`s Club" (driveby) deals with the struggle between people who want to use a new life saving drug and the FDA who doesn´t approve the medicament. The film is not only highly entertaining, it also shows how unforgiven and stubborn the FDA fights against new medicaments even when they can save the lives of many. This rigidity raises the costs and risks of creating a new pill substantial and is a main cause for high prices for pills like Sovaldi.

We all benefit from new and better medicaments. Today average life spans and life quality are much better than a century ago,  partly thanks to pills which have been created in this timespan. Many diseases like diabetes can be controlled or even cured. High profits encourage the drug companies to research and to develop more and better pills, expanding our expectancy of life.

If politicians want to reduce the costs of new pills they could consider to reduce the strict requirements of the FDA and to bring down the barriers for new life saving drugs.