Decline in economic returns from new drugs raises questions about sustaining innovations

Health Affairs

Volumn 34, Issue 2, 2015, Pages 245-252

  Berndt, Ernst R ^a   Nass, Deanna ^b   Kleinrock, Michael ^b   Aitken, Murray ^b  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^b IMS Institute for Healthcare Informatics   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

BIOSIMILAR AGENT; NEW DRUG; PRESCRIPTION DRUG; BIOLOGICAL PRODUCT; GENERIC DRUG;

ARTICLE; DRUG INDUSTRY; ECONOMICS; FOOD AND DRUG ADMINISTRATION; HUMAN; PROFIT; REWARD; TAX; UNITED STATES; COMMERCIAL PHENOMENA; COST; DRUG COST; ECONOMIC ASPECT; INTERNATIONAL COOPERATION; MEDICAL RESEARCH; PHARMACEUTICS; TRENDS;

BIOLOGICAL PRODUCTS; BIOMEDICAL RESEARCH; BIOSIMILAR PHARMACEUTICALS; COMMERCE; COSTS AND COST ANALYSIS; DRUG COSTS; DRUG INDUSTRY; DRUGS, GENERIC; ECONOMIC COMPETITION; HUMANS; INTERNATIONALITY; TECHNOLOGY, PHARMACEUTICAL; UNITED STATES;

EID: 84922737785     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2014.1029     Document Type: Article

References (22)

1. DiMasi JA, Hansen RW, Grabowski HG, Lasagna L. Cost of innovation in the pharmaceutical industry. J Health Econ. 1991;10(2):107-42.
2. DiMasi JA, Hansen RW, Grabowski HG. The price of innovation: new estimates of drug development costs. J Health Econ. 2003;22(2):151-85.
3. DiMasi JA, Grabowski HG. The cost of biopharmaceutical R&D: is biotech different? MDE Manage Decis Econ. 2007;28(4-5):469-79.
4. Mestre-Ferrandiz J, Sussex J, Towse A. The R&D cost of a new medicine [Internet]. London: Office of Health Economics; 2012 Dec [cited 2014 Dec 29]. (Free registration required). Available for download from: http://www.ohe.org/publications/article/the-rd-cost-ofa-new-medicine-124.cfm
5. Cook A. How increased competition from generic drugs has affected prices and returns in the pharmaceutical industry [Internet]. Washington (DC): Congress Budget Office; 1998 Jul [cited 2014 Dec 29]. Available from: http://www.cbo.gov/sites/default/files/pharm.pdf
6. Grabowski H, Vernon J, DiMasi JA. Returns on research and development for 1990s new drug introductions. Pharmacoeconomics. 2002; 20(Suppl 3):11-29.
7. Aitken M, Berndt ER, Cutler DM. Prescription drug spending trends in the United States: looking beyond the turning point. Health Aff (Millwood). 2009;28(1):w151-60. DOI: 10.1377/hlthaff.28.1.w151.
8. IMS Institute for Healthcare Informatics. Medicine use and shifting costs of healthcare: a review of the use of medicines in the U.S. in 2013 [Internet]. Plymouth Meeting (PA): IMS; 2014 Apr [cited 2015 Jan 8]. (Free registration required). Available for download from: http://www.imshealth.com/portal/site/imshealth/menuitem.762a961826aad98f53c753c71ad8c22a/?vgnextoid=2684d47626745410VgnVCM10000076192ca2RCRD&vgnextfmt=default
9. Basu P, Joglekar G, Rai S, Suresh P, Vernon J. Analysis of manufacturing costs in pharmaceutical companies. J Pharm Innov. 2008;3(1):30-40.
10. US Congress Office of Technology Assessment. Pharmaceutical R&D: costs, risks, and rewards [Internet]. Washington (DC): Government Printing Office; 1993 Feb [cited 2014 Dec 29]. (Pub. No. OTA-H-522). Available from: http://govinfo.library.unt.edu/ota/Ota_1/DATA/1993/9336.PDF
11. Gagnon MA, Lexchin J. The cost of pushing pills: a new estimate of pharmaceutical promotion expenditures in the United States. PLoS Med. 2008;5(1):e1.
12. IMS Health. Launch Excellence IV: a new launch environment and new challenges for success [Internet]. Plymouth Meeting (PA): IMS Health; 2013 Jun 24 [cited 2015 Jan 8]. (Free registration required). Available for download from: http://www.pharmaphorum.com/articles/launch-excellence-iv-a-new-launchenvironment-and-new-challengesfor-success
13. DiMasi JA, Grabowski HG, Hansen RW. Innovation in the pharmaceutical industry: new estimates of R&D costs [Internet]. Presentation at: Cost of Developing a New Drug briefing; 2014 Nov 18; Tufts Center for the Study of Drug Development, Boston, MA [cited 2014 Dec 30]. Available from: http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_RD_cost_study_-_Nov_18,_2014..pdf
14. Schulze U, Baedeker M, Chen YT, Greber D. R&D productivity: on the comeback trail. Nat Rev Drug Discov. 2014;13(5):331-2. Figure S2.
15. Frost & Sullivan: rise in IPOs resuscitates global pharma and biotech investment. Consultant-News.com [serial on the Internet]. 2014 Mar 6 [cited 2014 Dec 30]. Available from: http://www.consultant-news.com/article_display.aspx?p=adp&id=11466
16. PricewaterhouseCoopers/National Venture Capital Association. Money Tree™ report, data: Thomson Reuters total U.S. investments by year Q1 1995-Q4 2013 [Internet]. Washington (DC): PricewaterhouseCoopers; [cited 2014 Dec 30]. Available for download from: http://nvca.org/index.php?option=com_docman&task=doc_download&gid=1033&Itemid=93 in category VC Industry Statistics/VC Investments (Money Tree)
17. Congressional Budget Office. Offsetting effects of prescription drug use on Medicare's spending for medical services [Internet]. Washington (DC): CBO; 2012 Nov [cited 2014 Dec 30]. Available from: http://www.cbo.gov/sites/default/files/cbofiles/attachments/43741-MedicalOffsets-11-29-12.pdf
18. Stuart B, Loh FE, Roberto P, Miller L. Incident user cohorts for assessing cost-offsets. Health Serv Res. 2014; 49(4):1364-86.
19. Roebuck MC, Liberman JN, Gemmill-Toyama M, Brennan TA. Medication adherence leads to lower health care use and costs despite increased drug spending. Health Aff (Millwood). 2011;30(1):91-9.
20. McWilliams JM, Zaslavsky AM, Huskamp HA. Implementation of Medicare Part D and nondrug medical spending for elderly adults with limited prior drug coverage. JAMA. 2011;306(4):402-9.
21. Chandra A, Gruber J, McKnight R. Patient cost-sharing and hospitalization offsets in the elderly. Am Econ Rev. 2010;100(1):193-213.
22. Shang B, Goldman DP. Prescription drug coverage and elderly Medicare spending [Internet]. Cambridge (MA): National Bureau of Economic Research; 2007 Sep [cited 2014 Dec 30]. (NBER Working Paper No. 13358). Available from: http://www.nber.org/papers/w13358.pdf