Letters to the Editor: Don't expect a correlation between an individual drug's development cost and price – Endpoints News

End­points News re­cent­ly re­port­ed on a new pa­per in JA­MA that pur­ports to show that there is no cor­re­la­tion be­tween the price of a drug and its R&D costs. If the JA­MA ed­i­tors were to ap­ply sim­i­lar stan­dards of ev­i­dence to a pa­per about a drug’s clin­i­cal tri­al, they would be jus­ti­fi­ably crit­i­cized.
The pa­per cher­ry picks 60 out of hun­dreds of drugs, with the ex­cuse that the rel­e­vant da­ta for oth­er drugs ap­proved over the se­lect­ed 10-year pe­ri­od were dif­fi­cult to source. Imag­ine if a bio­phar­ma com­pa­ny on­ly pub­lished da­ta on 60 out of sev­er­al hun­dred par­tic­i­pants in a tri­al, claim­ing that the da­ta from the oth­ers were “dif­fi­cult to ac­cess.” The au­thors them­selves note an­oth­er sig­nif­i­cant weak­ness: that they did not have ac­cess to the net prices of many of the drugs in their sam­ple. This re­flects our sys­tem of drug re­bates, in which phar­ma­cy ben­e­fit man­agers, or PBMs, can re­ceive 30%-50% or more of a drug’s list price, leav­ing the drug de­vel­op­er with a sub­stan­tial­ly low­er ac­tu­al, or “net,” price.
More con­cern­ing, the au­thors’ study de­sign sim­ply ig­nored the fact that for every FDA-ap­proved drug, there are on av­er­age about nine oth­ers that made it in­to clin­i­cal tri­als, but failed to reach the mar­ket. Yet drug com­pa­nies must in­vest huge sums de­vel­op­ing the 90% of drug can­di­dates that ul­ti­mate­ly fail. The re­turn on in­vest­ment for each suc­cess­ful drug must take in­to ac­count the ex­pen­di­tures on all of them, in­clud­ing the in­evitable fail­ures, or in­vestors will not con­tin­ue to sup­port the de­vel­op­ment of new med­i­cines. There­fore, one should not ex­pect there to be a cor­re­la­tion be­tween an in­di­vid­ual drug’s de­vel­op­ment costs and its price.
Ron Co­hen, M.D.
Pres­i­dent and CEO
Acor­da Ther­a­peu­tics
The dynamic in the biotech market has been highly volatile in the last few years, from the high peaks immediately after the COVID vaccine in 2021, to the lowest downturns of the last 20 years in 2022. This uncertainty makes calling the exact timing of the market’s turn something of a fool’s errand, according to Dr. Chen Yu, Founder and Managing Partner of TCG Crossover (TCG X). He speaks with RBC’s Noël Brown, Head of US Biotechnology Investment Banking, about the market’s road ahead and two possible paths for growth.
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Zoom can only go so far. That’s the mindset John Carroll will be bringing to London next week for the first time in several years. If you’re there, consider joining him as he chats with a small crowd of biopharma people — we also have virtual options.
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Two months after his abrupt exit from J&J, Mathai Mammen is cropping up as a top candidate to succeed Michel Vounatsos as Biogen’s next CEO, STAT reported.
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The FDA’s Center for Drug Evaluation and Research (CDER) dropped its briefing documents spelling out why Covis’ controversial preterm birth drug Makena should be pulled from the market — and it isn’t mincing words.
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When Fred Hutchinson Cancer Research Center and Seattle Cancer Care Alliance merged, it was a marriage of complementary strengths for the already close partners. However, now under one umbrella as the Fred Hutchinson Cancer Center, or simply Fred Hutch as it is often called, it’s highlighting the newly unified research and clinical care programs with a new brand identity.
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By the time the FDA hands down its decision on valrox, BioMarin will be a different company — literally.
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