Have you ever wondered how the medication you take when sick is priced? Why is the same property sold at different prices? Why do drug prices differ between countries?
These and other questions were posed by Al Jazeera Clinic to Dr. Samar Dhiyab, Associate Professor and Dean of the Faculty of Pharmacy at the University of Applied Sciences in Jordan. Dr. Samar holds a PhD in pharmaceutical analysis from Liverpool John Moores University in Britain.
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Why are drug prices high?
There are reasons for the rise in drug prices, the first and most important of which is the costs incurred by pharmaceutical companies during the development and discovery of a drug for the first time for a specific disease. Discovering a drug takes 10 to 15 years. During this period, the drug does not generate any money for the company. On the contrary, the company pays money for laboratory studies and studies on humans, with the possibility that all of this will end in failure. The company may not reach an effective drug, or the compound may have high toxicity, and thus this investment ends in failure.
Therefore, when the drug is obtained, the company obtains a patent and has the sole right to manufacture the drug, and this is what makes its price high, in addition to other factors such as the number of people who benefit from the drug, the nature of the disease it treats, and the cost of manufacturing after the process of development and discovery in the final pharmaceutical form.
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How are drugs discovered?
First, the company studies the nature of the disease for which it wants to manufacture a medicine to know what changes inside the body to cause this disease to occur, and how it can be targeted and achieve therapeutic benefit. After that, the appropriate chemical formula for the target is searched, and it can design this substance, or research existing drugs and make chemical changes to them to achieve greater effectiveness or fewer side effects, or extract these substances from natural sources such as plants, and then they are chemically modified to reach an acceptable final form. Researchers start with a large number of compounds that may show effectiveness. After that, these compounds are tested in the laboratory on cells or tissues, then we move to the pre-clinical stage in which the compound is tested on laboratory animals.
After ensuring that the drug is effective and that its toxicity is limited, the drug is studied in humans in clinical studies, and is initially tested on small numbers of healthy volunteers. After ensuring that the drug has no side effects, the drug is tested on a larger number of participants with the disease.
If the second stage is successful, we move to the third stage, which is carried out on larger numbers of patients of different races and ages, and this is done under close medical supervision. All of this is very expensive, and the pharmaceutical form is developed to reach the final form, after which the drug is registered with the regulatory authorities in the country, and after approval it is promoted.
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How much does it cost on average to develop a drug?
It costs approximately $2 billion to develop a drug from scratch.
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Which drug made the most profits? How much did it cost to develop it?
According to recent statistics, the drug is “Humira”, which is a drug that treats autoimmune diseases such as rheumatism, psoriasis, and Crohn’s disease. Its development cost two billion dollars, and it achieved profits estimated at 200 billion dollars.
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What is the difference between original medicine and generic medicine?
An original medicine is a medicine that was discovered for the first time by a company that owns a patent for it for 20 years, gives it the appropriate trade name, and has a monopoly on its sale. After the expiration of the patent period, any company has the right to manufacture the active ingredient of the drug, and this drug is called a generic drug.
The companies verify the bioequivalence of the generic drug with the drug manufactured by the parent company. Generic medicine is sold at lower prices.
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How are medications priced?
Most countries regulate drug prices, including Arab countries. In the United States, the market is free, and the state does not interfere in the pricing of medicines. Rather, pharmaceutical companies set the prices they deem appropriate. In some countries, the Pharmacists Syndicate has a role in pricing medicines.
Medicines are priced based on several points, including: How much did the medicine cost? If the medicine is imported, how much does it cost to import it and customs? How many people benefit from it? The nature of the disease condition that this medicine treats, in addition to government support for medicines, if any, agreements between the medicine and manufacturers, and the profit margin for pharmacies and warehouses.
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Why do medicines differ in their prices?
Raw materials play a role, the final pharmaceutical form and the materials required to prepare this pharmaceutical form also play a role, and the nature of the disease being treated. Also, medicines that treat rare diseases are more expensive than medicines that treat common diseases, because companies seek to recover and compensate for what they paid during the development stage.
The stability of the drug (the time it takes before it spoils) and the cost of manufacturing also play a role in the price of the drug.
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Why do drug prices differ from one country to another?
There are a number of factors, including laws and legislation in the country, the presence of government support for medicines, customs prices, the cost of importing, the presence of a local industry, and the existence of a health insurance system.
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Do insurance companies have a role in drug pricing?
Its role may be through the price at which medicines are purchased, which constitutes a pressure factor. Its role varies from one country to another. In countries where there are strict laws, it cannot play a role, but in countries where there is no regulation, insurance companies can influence the price of the drug.
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Are there policies that require life-sustaining medications to be available to patients who are unable to purchase them?
Yes, there are campaigns around the world from various bodies, such as the World Health Organization and Doctors Without Borders, to ensure that these medicines reach those who need them. There is a policy in most countries that ensures that important medicines reach everyone who needs them, but this does not happen in all countries.