Tuesday, October 28, 2008

Exposing the drug industry's bogus $800 million cost estimate... and other sordid tales

In 2003. researchers at Tufts University published a study showing that it cost drug companies approximately $800 million to develop a new drug and get it approved by the FDA. In the intervening years, the drug industry has used that mind-boggling cost estimate to justify not only the high cost of new prescription drugs but also the need for expedited drug approvals and long patent protection once their drugs were approved.

Well, guess what? As it turns out, the study by researchers for the Tufts Center for the Study of Drug Development was deeply flawed and wildly inflated the actual cost of developing a new drug from start to finish. The study’s flaws and the undisclosed conflicts on the part of its authors were dissected both in a book by Merrill Goozner, the author of gooznews and in a paper that two bioethicists tried to get published in the Journal of Health Economics, which ran the original $800 million estimate.

In a tale that rivals anything out of Machiavelli, the editors of this supposedly respectable journal insisted on massive revisions and cuts in the bioethicists’ submission and only agreed to publish a milder version of their critique after the two threatened to sue the journal for violating academic freedoms. The JHE editors were particularly adamant about cutting from the critique the fact that authors of the $800 million estimate had failed to disclose in their study that they and the Tufts Center for the Study of Drug Development are heavily dependent on drug industry funding (although it didn't fund the cost estimate study).

The two bioethicists, Donald Light, a professor at the University of Medicine and Dentistry in New Jersey, and Rebecca Warburton, a health economist at the University of London, chronicle their convoluted efforts to publish their critique -- in an entertaining piece in the current issue of the Harvard Health Policy Review. They hold their experience up as an example of the need for higher ethical standards on the part of many conflict-ridden healthcare journals.

But wait – the story doesn’t end there. According to Gooznews, the editor of the student-run Harvard Health Policy Review yanked the entire issue of HHPR off the web last week after getting a steamed email from Richard Frank, one of the editors of JHE who also happens to be the Harvard review's faculty advisor and a big-time health economics professor at Harvard Medical School. In his email, Frank said he no longer wanted to be affiliated with the review. As the student editors now admit, “we panicked.”

The current issue is now back online along with an abject apology from the student editors for not having fact-checked the Light/Warburton critique to ensure the veracity of their claims. Apparently, what most incensed Richard Frank was that the HHPR didn’t contact the JHE editors for rebuttal before running the critique.

Funny how some powerful journal editors don't enjoy being on the receiving end of their own medicine.


Dan said...

As I recall, Marcia Angell addressd this bogus cost in her book, "The Truth About The Drug Companies" several years ago as well. The actual cost, as I recall, is a bit over 100 million dollars, if you factor in NIH contributions, tax breaks, and so forth.

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