Donald W. Light

Foreign Free Riders and the High Price of US Medicines

Donald W. Light, Joel Lexchin BMJ vol 331: 958-60


We can find no evidence to support the widely believed claims from industry that lower prices in other industrialised countries do not allow companies to recover their R&D costs; so they have to charge Americans more to make up the difference and pay for these "foreign free riders." We also explain why the claims themselves contradict the economic nature of the pharmaceutical industry.

The latest report from the UK Pharmaceutical Price Regulation Scheme shows that drug companies in the United Kingdom invest more of their revenues from domestic sales in research and development than do companies in the US. Prices in the UK are much lower than those in the US yet profits remain robust.

Companies in other countries also manage to recover their research and development costs, maintain high profits, and sell drugs at substantially lower prices than in the US. For example, in Canada the 35 companies that are members of the brand name industry association report that income from domestic sales is, on average, about 10 times greater than research and development costs. They have profits higher than makers of computer equipment and telecommunications carriers despite prices being about 40% lower than in the US.

Selected Works

GOOD PHARMA
Describes how a large institute (51 labs) devoted to developing better medicines for patients provides a public health model works without patenting any of its discoveries or new uses in an open-science, collaborative, self-critical style at much lower costs with data transparency than commercialized research.
PHARMAMYTHS AND REALITIES
1. "The FDA's new clothes (for safer drugs): tattered, missing sleeve, torn pocket... 2. "Why do cancer drugs get such an easy ride? Many trials allowed that lack basic features for clear evidence of benefits or harms. 3. "Serious risks for few new benefits from FDA-approved drugs" That's what the FDA gives us.
Pulls together the syndrome of practices, laws, and rules that are maximizing harmful side effects from new drugs that usually provide few or no off-setting benefits. Presents evidence of an epidemic of adverse reactions that have made prescription drugs the 4th leading cause of death, tied with stroke.
Rushed approvals result in a poor deal for both patients and cancer research. While regulators claim they approve major advances, independent evidence documents flawed, biased, and incomplete evidence so that no one can know if most help cancer patients. Accelerated reviews and easy-ride quasi-evidence reward more research for more drugs with little evidence of benefit.
Although prescription drugs are a major health hazard and leading cause of death, sociologists and epidemiologists fail to mention or study them.
Describes this readable, deeply researched book by one of Europe's authorities on evidence about the effectiveness and risks of new drugs.
Explains how the FDA has become institutionally corrupt so that 90 percent of new approvals provide few or no advantages, and drugs are the 4th leading cause of death.
Companies are spiraling up high prices, not because of costs or better value, but because they can get away with it, only the USA.
Review of evidence that only 1 in 10 new drugs has substantial clinical advantages but 1 in every 5 results in serious harms.
Insights in to how drug companies have been transforming illness, diagnosis, the role of doctors, and treatment, away from clinical pathology to risks by numbers.
High prices and little added value characterize most new drugs. The industry turns out articles on the so-called innovation crisis but we prove there is none. Rather, a hidden business model leads to scores of minor variations.
A detailed account of extending data exclusivity without credible evidence it increases innovation. A costly protection from free-market competition
Recent record-high cost estimates of R&D are not only untrue but can impede policy for global health justice
Prescription drugs are less effective and more dangerous than patients or physicians think
Cost of research per new drug is much lower than claimed
How drug marketing undermines patient safety and public health
Provides evidence that research and other costs are recovered at European prices. Higher US drugs prices go largely to more marketing and profits.
Three Harvard professors violated nearly every standard when we questioned the Tufts-DiMasi high estimate of R&D costs.
While medical journal editors work hard to minimize commercial bias in research articles that can threaten their reputation and trustworthiness, editors need to consider commercial influences on themselves, like revenues from reprints of positive results and advertising. These could be significantly reduced.
The Foreign Free Rider claim is a myth. Dollar for dollar, Europeans have discovered more global new drugs than Americans
84% of all funds to discover new drugs comes from public sources
GLOBAL JUSTICE AND VACCINES FOR THE POOR
Costs much lower than claimed and recovered in 18 months; so price can be low & profitable.
The pneumococcal AMC needs changes to avoid sinking GAVI
The only history of this global policy tool and why we need to use open design to do it better.
Two-thirds of $1.5 bn donated by taxpayers will go to extra profits rather than to saving poor children if the pneumococcal AMC is used
Advanced Market Commitments to encourage new vaccines for the poor are impractical, too expensive, and benefit the Big Four more than poor children

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