WHO: Profits Outweigh R&D Costs of New Cancer Drugs

MedicalResearch.com Interview with:

Kiu Tay-Teo, PhD World Health Organization Geneva, Switzerland

Dr. Kiu Tay-Teo

Kiu Tay-Teo, PhD
World Health Organization
Geneva, Switzerland

MedicalResearch.com: What are the main findings?

Response: High costs and high risks of R&D for drugs have been presented to justify high drug prices, especially for cancer drugs. However, it is unclear whether prices are in fact justifiable compared to the overall return on R&D investment.

In this paper, we systematically compared incomes from the sales of cancer drugs with the R&D costs. We quantified the incomes generated from the sales of 99 cancer drugs approved by FDA from 1989–2017. This was based on sales figures reported in the originator companies’ annual financial reports, and where necessary, estimates deduced from the reported figures. The sales incomes were net of rebates and discounts, but without accounting for expenses and taxes. For the R&D costs of bringing one new cancer drug to the market, the literature reported a typical costs of between $219 million and $2.9 billion, after accounting for the costs of failed products that were investigated but not marketed and the opportunity costs. For the main analysis, we used a median cost of $794 million, as reported in the literature. To be clear, this analysis did not estimate profit return because we do not have information about the costs and year-to-year variations in costs (i.e. expenses and taxes) specific to cancer drugs.

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