[Ip-health] Another comparison of DiMasi and PhRMA clinicaltrialnumbers

Dean Baker Dean.Baker1 at verizon.net
Wed Mar 16 06:05:00 PDT 2016


I believe the 10.5% is supposed to overall return to capital in the 
economy. It would be close to that for physical capital, but the return 
to shareholders in general (not pharma specific) has
been close to 5 percent in this century. Given that, the 10.5% 
assumption is certainly on the high side.

On 3/16/2016 6:04 AM, pierchir at club-internet.fr wrote:
> Hi all,
> Another interesting aspect of this "study" is the opportunity costs of 
> capital, or "time costs" :
> "The $2.558 billion figure per approved compound is based on estimated 
> average out-of-pocket costs of $1.395 billion and time costs (expected 
> returns that investors forego while a drug is in development) of 
> $1.163 billion".
> And what "investors" are expecting ? : "Capitalizing out-of-pocket 
> costs to the point of marketing approval at a real discount rate of 
> 10.5% yields a total pre-approval cost estimate of $2588 million (2013 
> dollars)."
> This 10.5% rate is the yearly profit of pharmaceutical companies 
> shareholders.
> Then the more profitable pharmaceutical companies are, the more 
> expensive R&D is, according to Di Masi. Isn't a nice sophism ?
> Best
> Pierre
>
>
>
> -----Message d'origine----- From: Joel Lexchin
> Sent: Wednesday, March 16, 2016 4:19 AM
> To: Els Torreele
> Cc: Ip-health
> Subject: Re: [Ip-health] Another comparison of DiMasi and PhRMA 
> clinicaltrialnumbers
>
> But without knowing what drugs DiMasi looked at we can’t judge their 
> therapeutic value. Also drugs for rare diseases by definition will 
> have small numbers in the trials but since they often measure 
> surrogate outcomes the small numbers don’t necessarily mean large 
> therapeutic gains.
>
> Joel
> -- 
> Joel Lexchin MD
> Professor
> School of Health Policy and Management
> Faculty of Health
> York University
> 4700 Keele St.
> Toronto ON
> Canada M3J 1P3
> Tel: +416-736-2100 x 22119
> Fax: +416-736-5227
> E mail: jlexchin at yorku.ca
>
>
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-- 
Dean Baker (baker at cepr.net)
Co-Director
Center for Economic and Policy Research 1611 Connecticut Ave., NW
Washington, DC 20009
202-293-5380 (ext 114)
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