Cost of developing new drugs may be lower than industry claims: trial

Semaglutide retails for $17k USD/year in the US but costs only $60 to make. Perhaps it could be argued that the autoinjectors are "expensive", but not $17k/year and oral forms are coming online to make this item moot. In limited circumstances, excessive profits cross into the realm of price gouging and shouldn't be allowed by regulatory enforcement.

The cost of manufacturing the drug is only relevant if the drug can be discovered and proved effective by the Magic Drug Fairy.

Here in the real world, that manufacturing cost is largely irrelevant.

You say all this, while the literal title of the article you're commenting on is "The cost of developing new drugs may be far lower than industry claims".

I think this comment perfectly proves that this is relevant.

Manufacturing is quite relevant. If the actual cost of "discovered and proved effective" is far lower than claimed, then manufacturability becomes a concern. If the cost of discovery and proven effectiveness is borne by governments and universities, then the manufacturing is the only cost borne by the pharmaceutical companies.

The article appears to imply that the direct cost of developing a successful drug is the relevant metric. It isn't; the cost must include the indirect costs of development on drugs that didn't pan out. And the vast majority of drug candidates don't pan out, often in Phase 3 trials where much of the cost has already been sunk.

Put it another way: if making new drugs was so cheap and easy, drug companies would be doing that in competition with each other, and prices would be low as a result of that competition.

> if making new drugs was so cheap and easy, drug companies would be doing that in competition with each other

They are. There is intense competition and lots of venture capital and research grants to fund research.

> prices would be low as a result of that competition.

Why? Patents end competition as soon as the research is successful. They have to compete to research the drug - and we see a vibrant competitive market for research - but they don't have to compete to sell the drug. We see this even when there are multiple brands competing to sell generic versions of drugs they didn't discover or spend R&D on.

There is simply no market forces to lower medically necessary drug prices. The market is captive (people will die without certain medication), and thanks to patents, there is often no competition for years to allow people to price shop.

I can buy ibuprofen or acetaminophen or aspirin for cheap at any drug store, because there is a competitive market for OTC pain meds. There is no OTC market for insulin, and people will die without it. Unsurprisingly, insulin is much more expensive, despite being discovered by a university and being over 100 years old.

PreP (prevents HIV) research was entirely funded by US taxes, and the pills costs $2000/mo - despite being available from multiple companies including available as a generic. Why are companies that didn't pay to research the drug (and didn't take US Gov money to research it) charging $2000/mo? The only cost they incurred was manufacturing.