The Great American Drug Deal by Peter Kolchinsky

Author:Peter Kolchinsky
Language: eng
Format: epub
Publisher: Evelexa Press
Published: 2020-01-20T21:24:54+00:00

Another way other countries help keep America’s drug costs down has to do with clinical trials. Gilead was able to show that Harvoni worked in the types of hepatitis C that are rare yet still a problem in the US because they could find patients infected with these strains of the virus more quickly in other countries. It would have taken much longer to recruit enough of these patients in the US to prove to the FDA that the drug worked on these particular strains. In addition, working with scientists, physicians, and manufacturers in other countries helps keep costs down since labor costs are lower in many of them.

Americans value the benefits that drugs offer. They demand more innovation and don’t want to be ripped off. So if the world were just America, one might surmise that Americans would still demand that drug companies work on cures for cancer and Alzheimer’s and infectious diseases and that insurance companies find some way of covering these expensive drugs. In reality, all the other countries comprising the Rest of the World (RoW) participate in the drug development process, contributing a large fraction of patients to global clinical trials and half of the profits necessary to meet drug companies’ current return on investment targets, ultimately allowing America to enjoy lower drug prices than if it were the only country on earth.

But let’s say a country helps an American company develop a drug but then refuses to buy it because the price is more than they are willing to pay. Patients participating in clinical trials would have undertaken great risk, but they would not benefit once those trials were finished. Indeed, that’s as unethical as it sounds.

For example, HIV medications are far more easily tested in Africa where the rate of infection is higher, and then the drugs are sold at a large profit in the US but distributed very cheaply in Africa. Compulsory licensing was conceived with the recognition that to do otherwise would be unethical.204

So if companies aren’t willing to sell drugs to countries at prices they are willing to pay, then they should stop relying on patients there for clinical trials, which would result in drug development taking longer and costing more, to the detriment of patients everywhere, including America.

Americans have such a strong drive to both innovate and treat patients that I think the drug industry would continue to exist in some form if it only served the American market. But without other countries subsidizing drug development in all the ways I just mentioned, America would contend with higher drug prices.

Now consider the inverse scenario. What if there were no America? Without the American market, the modern biopharmaceutical industry would likely shrink dramatically or essentially cease to exist. It wouldn’t be able to generate a sufficient return on investment if it were developing products for countries that are willing to deny treatments to patients based on cost. Perhaps other wealthy nations would discover that they are willing to pay more for

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