By Peter J. Pitts
Medicine is getting cheaper. That may come as a surprise amid handwringing about the spiraling cost of health care, but two new studies show that the amount of money Americans spend on prescription drugs went down in 2012 for the first time in decades.
The reason for this welcome development is an influx of generic medications. The research behind a new drug is protected for a fixed number of years, after which competing firms can begin manufacturing generic forms. In 2012, 84 percent of all prescriptions were dispensed as generics, the highest rate in history. It’s a boon for consumers.
These new studies also found the prices of specialty medicines are rising. These new drugs involve cutting-edge technologies and can, therefore, be expensive. Fearful of what the newest medicines may cost, some politicians have proposed measures aimed at forcing these prices down.
We shouldn’t fear the price tag of these new medicines. Expensive medicine may be a bitter pill, but these advanced therapies offer hope to millions of patients, keeping them healthier for longer.
We’re living in a golden age of drug development. New treatments for everything from cancer to rare genetic diseases are entering the market, many of which are cutting-edge biologic medicines derived from living cells.
Biologics offer amazing promise. Consider their potential impact on cancer. Conventional cancer treatments often generate significant collateral damage to the patient. In contrast, the biologic approach injects a genetically engineered protein designed to knock out a tumor’s ability to produce new blood vessels, thereby cutting off its capacity to grow.
But the most specialized and complex drugs can come at an astronomical price. According to an exclusive Forbes’ survey of the most expensive medications, four biopharmaceuticals approved in 2012 cost more than $200,000 per year, per patient.
That’s because it costs, on average, $1.2 billion to bring a new drug to market – from the time it is a twinkle in a scientist’s eye, through a decade or more of lab research, to clinical trials and finally FDA approval.
The beauty of our system is that it encourages companies to make the massive investments of time and money required to bring a new drug to market. The biopharmaceutical industry’s legacy of risk-taking research has led to a world in which eight of every 10 medicines dispensed is generic.
Our children and grandchildren will grow up to marvel at the biologic revolution, just as an earlier generation marveled at the space race. But that can only happen if we accept the reality that innovation comes at a high price.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.