Understanding the rewards of successful drug development - Thinking inside the box Review
| Authors: | Khullar, D.; Ohn, J. A.; Trusheim, M.; Bach, P. B. |
| Review Title: | Understanding the rewards of successful drug development - Thinking inside the box |
| Abstract: | Recent polling1 suggests that Americans view prescription drug prices as a primary health policy concern, and in 2019, both houses of Congress introduced bills to lower drug prices.2,3 At first blush, this focus on the price of drugs seems apt. However, the ability to charge high prices is only one component of a complex system of risks and rewards that underlies pharmaceutical innovation in the United States. Policymakers who contemplate the system as a whole may create space for additional policy levers for change, since it is this overall framework that dictates the incentives for new drug development. Here, we describe the structure of the pharmaceutical reward system and the way in which existing and proposed policies affect it. We introduce the “reward box” to summarize the financial returns across the phases of drug discovery, approval, and sales (see the interactive graphic, available with the full text of this article at NEJM.org). In this stylized representation, the shape of each component is simplified to delineate the net financial loss or profit in each period. It does not, for example, capture the nuance that peak revenues are achieved early in the life cycle of some drugs, whereas the revenues from other drugs build slowly. The reward box pertains only to “successful” drugs (i.e., those approved by the Food and Drug Administration [FDA]), because our objective is to show how the drug development and sale periods interact to produce the overall reward. Copyright © 2020 Massachusetts Medical Society. |
| Keywords: | drug approval; united states; united states food and drug administration; history, 21st century; food and drug administration; drug development; health care policy; drug cost; economics; health policy; history; history, 20th century; competition; government regulation; patent; drug industry; reward; generic drug; drug marketing; legislation, drug; drug legislation; drugs, generic; patents as topic; human; priority journal; article; legislation and jurisprudence |
| Journal Title: | New England Journal of Medicine |
| Volume: | 382 |
| Issue: | 5 |
| ISSN: | 0028-4793 |
| Publisher: | Massachusetts Medical Society |
| Date Published: | 2020-01-30 |
| Start Page: | 473 |
| End Page: | 480 |
| Language: | English |
| DOI: | 10.1056/NEJMhpr1911004 |
| PUBMED: | 31995697 |
| PROVIDER: | scopus |
| DOI/URL: | |
| Notes: | Article -- Export Date: 2 March 2020 -- Source: Scopus |
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