But no one wants to research that; they can’t make any money from it…

A couple of my recent posts have focused on potentially dangerous ‘alternative’ treatments for medical conditions. Invariably, such posts generate comments along the lines of “I’ve been using it for years and I’m FINE” and the other favourite “ahhh but They don’t want to research it because it’s cheap and They can’t make any money from it!” (‘They’ is usually the eponymous ‘Big Pharma’).

It’s hard to argue with the first one. The friend of a friend of your uncle’s dishwasher repair main who’s smoked 40 a day for years without ever even getting a case of the sniffles doesn’t believe all that stuff about smoking being bad for you either. No one ever believes the thing they’re doing will turn out to be bad for them. Until, that is, they start getting nasty shooting pains in their left arm.


Olaparib costs £49,000 per patient.

The other one though, well, let’s have a look at that. It’s a really common argument, especially from Americans who tend to be much more aware of the cost of medication than Brits. We on this side of the pond are somewhat shielded from the realities of specific costs by the way the National Health Service works. However, some recent decisions by NICE (The National Institute for Health and Care Excellence) have raised the issue of the price of medication in the minds of people over here as well. For example, just a few days ago it was widely reported in the press that NICE had turned down a drug called olaparib (Lynparza) – a targeted treatment for ovarian cancer – because its price tag of more than £49,000 per patient per year was considerably higher than NICE’s upper limit of of £20,000 to £30,000.

£49,000 is a lot of money, no question about it. In some places you could buy a house for that kind of money. At the very least, you could buy a big chunk of a house. For the average household it’s almost double a year’s salary. How could a year’s worth of a drug possibly be worth so much money? Surely the pharmaceutical company (AstraZeneca in this case) are having a bit of a laugh with this price tag? All the way to the bank?

Why ARE medicines so expensive?

Why ARE medicines so expensive?

Well, how much does it cost to develop a drug? A study by the Centre for the Study of Drug Development at Tufts University in Massachusetts reported that the average cost for drugs developed between 1995 and 2007 was $2.6 billion (*see update below) which, based on 2007 exchange rates, is very roughly £1.3 billion. Of course, these figures are from a few years ago – it will be more in today’s market.

Why so much? Well, it takes on average about 12 years to get a drug from the laboratory to the market (and many potential drugs fall by the wayside during the various testing processes). There are a lot of people involved, from researchers in the lab to people running clinical trials to chemical engineers who have work out how to get a small-scale lab production up to something much larger to the people who design and produce the packaging. Even if you just start adding up 12 years worth of salaries (the average salary of a chemical engineer is something like £35,000, for example), you quickly get into big numbers, and that doesn’t take the cost of offices, factories, equipment, raw materials and so on into account.

Back to olaparib and its £49,000 a year price tag. There are about 7000 ovarian cancer diagnoses in the UK each year, but it’s a very specific treatment that would probably only apply to about 450 women each year and it’s estimated to extend life by about a year so, sadly, each patient would probably only be taking it for one year. It’s difficult to get specific figures about development costs, but let’s estimate it took about £1.5 billion to develop it (probably a conservative estimate), and let’s give it 20 years to break even, since after 20 years drugs go off-patent (which means other companies can produce them), and profits immediately drop).

Are pharmaceutical companies really ripping us off?

Are pharmaceutical companies really ripping us off?

Based on those rough numbers, each year the pharmaceutical company would need to make about £75 million. Divide by 450 patients and you get (rounding up a bit) £170 thousand per patient per year – more than three times the price tag NICE was working with. To stress: this is just to cover development costs. I’m not adding any profit on here. Even if you allow for the fact that AstraZeneca are selling the drug in other countries (in the US and Europe in particular), it’s hard to see how their profit margins can be anything more than pretty small.

You might say, so what? This is someone’s life we’re talking about here. Life is priceless. Yes, of course. But unless they can break even, and in fact make some kind of profit, no pharmaceutical company is ever going to invest time in drug development. No one runs a business to deliberately make a loss. Not for long, in any case.


Don’t let anyone convince you to swallow this stuff.

There are plenty of people out there claiming that some cheap, every-day substance can cure cancer (could be anything from a type of bleach to turpentine to baking soda, depending on the day of the week), but that ‘Big Pharma’ deliberately suppress these treatments, and/or refuse to research them, because they can’t make thousands selling them, and they would rather push their expensive (but, you know, tested) drugs.

Well no, the pharmaceutical companies can’t sell these kinds of ‘alternative’ treatments, because they’re controlled by extremely strict regulations and they can’t claim something works without rock-solid evidence. But don’t be taken in by the argument that it’s impossible to make a lot of money from selling this kind of stuff. Of course it’s possible: buy it in huge bulk, put it in small bottles with expensive-looking packaging, and the markup can be comfortably generous. Hey, if it’s possible to make money selling ‘ghost turds‘, then it’s possible to make money out of anything. And if you don’t want to actually sell it (which might upset the regulatory authorities) there are book sales, public appearances and private consultation fees. Oh yes, don’t let anyone convince you there’s not plenty of money to be made.

Besides which, it’s simply not true that medical researchers aren’t interested in ‘cheap’ substances. To quote the comedian Dara Ó Briain:

“Oh, herbal medicine’s been around for thousands of years!” Indeed it has, and then we tested it all, and the stuff that worked became ‘medicine’.

Except we shouldn’t be using the past tense; scientists continue to research this kind of thing all the time. Despite what the conspiracists might say, the people who work in these fields are genuinely interested in making people better. If they really thought baking soda could somehow cure a particular cancer, they’d be on it like a shot. Even if you don’t believe they’d do it for ‘the public good’, it’d be worth it for the prestige alone. Someone who managed to prove something like that would almost certainly be up for a Nobel Prize. The company they worked for would be using it in their marketing material forever more. You can’t buy publicity that good. (For more about this, check out this excellent article by Steven Novella.)

beetroot juice

Recent research suggests that beetroot juice could help treat high blood pressure.

Just to prove that research into simple, inexpensive stuff truly does happen, here are some examples (public health warning: I’m not advocating you experiment with any of these, I’m merely listing them to make the point. Discuss it with your doctor before you try anything):

Believe it or not, doctors like medicines that work.

Believe it or not, doctors like medicines that work.

These are just five examples. I’m certain there are many more. Researchers do look at well-known, relatively inexpensive substances if they think they might have a genuine therapeutic effect. That’s the sort of thing scientists do. The difference is that real scientists don’t rely on testimonials – the word of people who’ve “been taking it for years and never been healthier!” – they design proper, rigorous trials.

Sometimes these trials are promising, sometimes they’re not, but the substances that do turn out to be promising invariably find their way into medicine sooner or later because, essentially, doctors like medicine that works.

* Update: June 2015
After I wrote this post I came across this article on theconversation.com. It casts some doubt on the US$2.6 billion figure from The Tufts Center for the Study of Drug Development, and makes some interesting points about its calculation. In particular, it points out that more than once source has suggested the figure may be over-inflated. This could well be the case, in which case my rough estimate calculations might be off by some margin, but it’s impossible to be more accurate because pharmaceutical companies are pretty cagy about their actual costs. It is certainly the case that a number of pharmaceutical companies have existing, profitable medicines which are reaching the end of their patent lifetime and, it appears, not enough to replace them, leading to some recent mergers and acquisitions activity. A few have run into trouble: Glaxo Smith Kline issued a profit warning last year, as did the French group Sanofi SA. On the other hand, others have been doing extremely well. So are they genuinely over-charging for drugs? It’s a very difficult question, but I think it’s still safe to say that drug development is a very expensive business

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11 thoughts on “But no one wants to research that; they can’t make any money from it…

  1. Pingback: Please don’t eat apricot kernels | the chronicle flask

  2. It never fails to amaze me and simultaneously fill me with despair for humanity the way Alt-med types manage to convince themselves that Big Pharma is powerful enough to deliberately and successfully run a campaign of suppression on their amazing wonder cures, but not powerful or clever enough to isolate the active ingredient in that cure, slap a patent on it and then mass produce in order to make the literal sea of money that would result.


    • I guess it’s very easy to be overwhelmed by the Gish gallop (my new favourite phrase) and it takes time and effort, and probably a certain level of scientific understanding that many don’t have, to understand the refutations. Still, you’d think people would at least wonder why all the doctors and scientists involved in this research want to ‘hide’ treatments that might save their own lives, or their families’ lives, one day.


    • What an ignorant statement. Did you know Ronald Reagan colon cancer and refused to get treated in the US? What does that tell you about our healthcare system? He ended up getting an alternative treatment from Germany. Look it up, cancer never came back.

      Then look up Dr. Burzynski. He’s been fighting the FDA for decades for his cancer cure.

      And watch this video of the history of the modern FDA, It’ll give you some idea why our healthcare system suppresses cures.


      • What’s ignorant? The title? Or something else in that fairly long article? Maybe you should read the whole thing?

        As for Reagan, where some guy who famously believed in astrology went for his cancer treatment 30 years ago really doesn’t tell me, or anyone else, anything at all about anyone’s healthcare system.


  3. Nice article overall but the ‘divide by 450’ to get the per patient per year value seems a bit off as the research costs do not need to be covered by the UK market alone?


    • Absolutely. In my defence, the next sentence but one does say “Even if you allow for the fact that AstraZeneca are selling the drug in other countries (in the US and Europe in particular),” 🙂


  4. Disclosure, I have advanced secondary soft tissue sarcoma.

    The title of your article is “No one wants to research that, they can’t make any money from it” and the theme seems to be debunking that as a myth.

    But you set about by going into how expensive it is to get a drug to market and how that equates to a very large sum per patient per year. Over triple the seemingly exorbitant price the drug company in your example is trying to charge. That’s not debunking the myth it’s helping to prove it.

    It is simply uneconomical for big pharma to spend massive amounts of R&D on treatments for rare diseases. Consequently they don’t. How canyone argue otherwise?.

    In my case soft tissue sarcomas are resonably rare and my sub type of undifferentiated is even rarer. Guess how many clinucal trials are going on. If you guessed none you’d be correct. So after Ive exhausted the mainstream chemo and one other type I have basically no options except go home to die. (Fortunately I’m in the 20% of patients who is seeing tumour shrinkage).

    Contrast that to breast cancer where there are literally hundreds of options available and dozens of clininical trials at any given time. And that is down to the commonality of the disease and the attractiveness the size of the potential market brings to the equation for big pharma. (and I’m in no way begrudging sufferers of breast cancer those opportunities, more power to them and I wish them well).

    It’s just simple economics and despite setting out to debunk a myth I think youve done more to prove it. Companies will spend their research $ on potentially lucrative drugs where the market is big. They will not be keen to research cures for rare diseases with a small potential market.


    • Hi, the post was aimed not at specific treatments for rare diseases, but at those who repeatedly like to claim that easily-available and cheap substances, such as lemon juice, baking soda, turpentine, apricot kernels etc, aren’t researched because they’re unpatentable and anyone could get hold of them. The implication being that these substances can cure [insert medical condition here] but it’s been covered up by ‘Big Pharma’ who would rather peddle their expensive (yet tested and effective) medications. If you read to the bottom of the post, there’s a list of cheap, easily-available substances which HAVE been the subjects of research. My point being that of course researchers are interested in these things – they’re interested in anything that works. Even if huge bucket-loads of money can’t be made from the substance itself, there’s still the prestige and positive publicity. These things have their own value.

      Yes, you’re right that rare illnesses tend to have less research money sent their way. There’s only so much money, and yes, it does tend to get diverted to conditions which are more common. Especially since it usually takes over a decade to get a drug from the early stages to market, and a lot of substances just fall by the wayside because they have bad side-effects, or just don’t really work. I didn’t mean to imply this was a myth, because you’re right, it’s reality. But still, you never know. Sometimes a substance turns up that happens to be effective for a relatively rare condition – if it really works, you can bet someone will do the work on it. It’s always worthwhile if it turns out to have a significant positive effect. Best of luck with your treatment.


  5. Don’t forget they have to cover the costs of the drugs that don’t make it through the process from the money brought in from the few that actually make it to general use. They can’t guess in advance which ones might be viable.


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