PHARMA: The orphan blockbuster costs $800m

Forbes is pumping out a lot of interesting articles on the pharma market these days.  In an article called The Diagnosis For Medical Diagnostics they raise the issue of pairing diagnostics with drugs.  The basic problem is that as drug development becomes more specialized, genetic-based diagnostic testing pinpoints who the drugs will work for.  So the drugs will be more likely to work in those patients and have better results. This is a good thing! 

However, if we know who the drugs will work for, we’ll also know that the same drug won’t work so well for other patients. It’s likely therefore that newer drugs will only work for a smaller share of patients with any particular condition. For the drug to be profitable either the it must cost more per patient or less to develop.  The CEO of Genta quoted in the article doesn’t believe that the cost of drug development–the $800m in the title–is going to come down, which means that their drugs (and presumably many others) are going to cost significantly more per patient than currently available less effective drugs.  And as Jane Sarasohn Kahn mentioned in this recent post, "It’s not clear really who will be willing to pay for innovation". Given that patients are gong to want these new drugs, this leaves both the pharma cos and the rest of us with a big problem–particularly if Medicare is going to pay for drugs (uncertain, but likely) and seniors are going to vote (damn certain!).

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