Big Pharma Says Drug Prices Reflect R&D Cost. Researchers Call BS.

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https://www.wired.com/story/drug-research-pricing/

Big Pharma Says Drug Prices Reflect R&D Cost. Researchers Call BS

A new study finds no correlation between research and development spending and outlandish drug prices.

SCIENCE OCT 13, 2022 7:00 AM

At the end of September, a spot of good news: Relyvrio, a new drug for treating amyotrophic lateral sclerosis—or ALS, a neurological disorder without a cure—was approved in the United States. The ALS community rejoiced; the drug’s authorization was described as a “long-sought victory for patients.”

But the next day, the price of the medicine was revealed: $158,000 a year. This was far higher than what the Institute for Clinical and Economic Review, an independent nonprofit that analyzes health care costs, had estimated would be a reasonable price, which it deemed to be between $9,100 and $30,700.

Americans, though, probably weren’t shocked. Prescription drugs in the US cost about 2.5 times what they do in other countries, and a quarter of Americans find it difficult to afford them. Almost every new cancer drug starts at over $100,000 a year. And a 2022 study found that every year, the average price of newly released drugs is 20 percent higher.

How drug prices are set in the US is a mysterious black box. When rationalizing their lofty price tags, one of the most common reasons pharmaceutical companies will cite is that a high price is needed to make good on the money invested in research and development.

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