Do drug prices reflect development time and government investment?
BACKGROUND
Lengthy development times are cited by the pharmaceutical industry as one reason for high drug prices.


OBJECTIVE
We compared the prices of different groups of drugs after accounting for development time, government support, market size, and other drug characteristics.


METHODS
We conducted a retrospective study of 180 human therapeutic drugs categorized into 8 drug groups by assembling data on drug development times, government support, drug characteristics, and prices.


METHODS
First, we compared the development time and level of government support across the 8 drug groups. Second, we assessed the independent effect of drug group on median price per day in a multivariable analysis, controlling for development time and all other variables.


RESULTS
Thirty percent of antiretroviral drugs had government patents compared with 16% of other infectious disease drugs, 6% of cancer drugs, and less than 6% of any other drug group (P < 0.002). Fifty percent of antiretrovirals had NIH trials listed in the new drug application for approval by the Food and Drug Administration compared with less than 6% of any other drug group (P < 0.001). More antiretroviral and cancer drugs received fast track status and accelerated review during regulatory review by the Food and Drug Administration (P < 0.001). The median price of antiretrovirals was 8 US dollars per day more, cancer drugs 11 US dollars per day more, than the reference group after adjustment for other variables (P < 0.001). Development time was not associated with drug price.


CONCLUSIONS
Antiretroviral and cancer drugs, even after accounting for development time, are among the most highly priced medications. Notably, drugs with rapid development and more government support did not have lower drug prices.
Keyhani
Salomeh
S
Department of Health Policy, Mount Sinai School of Medicine, New York, New York 10029, USA. salomeh.keyhani@mountsinai.org
Diener-West
Marie
M
Powe
Neil
N
D002626:Chemistry, Pharmaceutical / Q000191:economics* / Q000379:methods; D017277:Drug Approval / Q000191:economics* / Q000379:methods; D004345:Drug Industry / Q000191:economics*; D006801:Humans; D010330:Patents as Topic; D004364:Pharmaceutical Preparations / Q000145:classification*; D011306:Prescription Fees / Q000706:statistics & numerical data* / Q000639:trends; D012189:Retrospective Studies; D013673:Technology Assessment, Biomedical / Q000191:economics* / Q000379:methods; D013997:Time Factors; D014481:United States; D014486:United States Food and Drug Administration
D004364:Pharmaceutical Preparations