Pharmaceutical Industry Focused on Profits, Not Innovation, USA Today Editorial States

A study released by the National Institute for Health Care Management this week finding that only 15% of drugs approved by the FDA from 1989 to 2000 were "highly innovative" is "just the latest evidence suggesting the drug industry is more interested in fattening its bottom line than funding innovation," according to a USA Today editorial. The study, which concluded that drug makers mostly developed modifications or reformulations of existing drugs, also "shoots a hole in the industry's standard defense of high drug prices" -- that drug profits help fund innovation -- and "raises broader questions about drug makers' excuses for the exploding costs that threaten to put health insurance premiums out of reach for businesses and individuals." The editorial says that in addition to marketing less innovative drugs, the industry is using several methods to keep its profits high, including fighting the entry of generic drugs to the market, challenging discount plans run by states and aggressively marketing new drugs. USA Today concludes, "The pharmaceutical industry rightly claims that researching and developing breakthrough drugs is risky and expensive. Obviously somebody has to cover the costs. What's less clear is why consumers should pay so much to an industry that mainly produces different versions of what's already in their medicine cabinet" (USA Today, 5/31).

In a counterpoint USA Today opinion piece, Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America, writes that "[n]ever has there been a more promising period for patients waiting for new cures and treatments," as the industry now has more than 1,000 drugs and vaccines in development. Writing that the "NIHCM report was sponsored in large part by Blue Cross and Blue Shield managed care companies whose financial interest is to provide patients with the cheapest but not necessarily the best medicine," Holmer says that of the more than $30 billion the industry spends annually on research and development, 80% is dedicated to innovative products and 20% to "improving and/or modifying existing products." He concludes, "This R&D builds on the steady introduction over the years of innovative medicines that have enabled patients all over the world to lead longer, healthier and more productive lives. Life expectancy is increasing; infant mortality is decreasing; disability rates among the elderly are falling; and progress is continuing against many diseases. A leading reason: major pharmaceutical breakthroughs in the 1990s" (Holmer, USA Today, 5/31).