‘Tremendous Pressures’ on Drug Makers May Transform Pharmaceutical Industry, Los Angeles Times Reports
The Los Angeles Times on Sunday examined the "tremendous pressures" faced by brand-name pharmaceutical companies, forces that could transform the $400 billion industry and "even alter the flow of new drugs to the marketplace." Brand-name drug companies, "reeling from attacks" by senior advocacy groups, AIDS activists and government officials, face two "deep-seated and long-term" problems: a lack of new treatments in their pipelines and "mounting pressure" to reduce prescription drug prices, the Times reports. According to Lehman Bros. pharmaceutical industry analyst C. Anthony Butler, the FDA has approved seven new treatments in 2002 and will approve about five more by the end of the year, compared to 27 last year and 26 in 2000. Drug companies have begun to develop treatments for "more serious diseases," as well as medications based on the map of the human genome, and the research "will be more tricky, expensive and time consuming," the Times reports.
Some pharmaceutical companies plan to address their lack of new treatments with mergers, although past mergers "haven't led to more success in drug development," and others "eventually will stop doing research" and license treatments from biotechnology companies, the Times reports. On the issue of cost, some drug company officials predict that most of the criticism over prescription drug prices will end after Congress passes a Medicare prescription drug benefit. However, the Senate in the past two weeks has defeated four bills that would have added a prescription drug benefit to Medicare and passed legislation (S 812) that would increase access to generic treatments, a bill opposed by brand-name pharmaceutical companies. "On the revenue side, they're likely to get kicked in the shin. And on the product side, the well has run dry. It is not an easy future," Princeton University health economist Uwe Reinhardt said (Lee/White, Los Angeles Times, 8/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.