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

Dean Baker Dean.Baker1 at verizon.net
Mon Mar 21 05:28:28 PDT 2016


it's a long period average, although it's kind of high for the most 
recent 15 years

On 3/19/2016 9:04 AM, Mohga Kamal-Yanni wrote:
> Excuse my financial ignorance. But is; "(expected returns that investors
> forego while a drug is in development) of $1.163
> billion"., surely this figure would have been much lower or even negative
> during the financial crisis? OR does the figure stays constant even if the
> market totally collapse and thus nobody expects return except pharma?!
>
> Best wishes مع أطيب التمنيات
> ________________________________
> Mohga -Dictating to the computer so please forgive silly mistakes
> Mohga M Kamal-Yanni
> Senior health & HIV policy advisor, Oxfam GB
> Editor of www.globalhealthcheck.org
> John Smith Drive, Oxford, OX4 2JY, UK (GMT, CET-1, EDT+5, EST+6)
> UK Mobile   + 44 (0)777 62 55 884
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>
>
> From:   <pierchir at club-internet.fr>
> To:     "Joel Lexchin" <jlexchin at yorku.ca>, "Els Torreele"
> <els.torreele at opensocietyfoundations.org>
> Cc:     Ip-health <ip-health at lists.keionline.org>
> Date:   16/03/2016 12:44
> Subject:        Re: [Ip-health] Another comparison of DiMasi and PhRMA
> clinicaltrialnumbers
> Sent by:        "Ip-health" <ip-health-bounces at lists.keionline.org>
>
>
>
> 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
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