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Research & Development Investments Do Not Explain Drug Price Variation

No association seen between estimated R&D investments and treatment costs based on list prices at launch or net prices after one year

MONDAY, Oct. 3, 2022 (HealthDay News) — For a sample of 60 drugs, research and development investments do not explain the variation in list prices, according to a study published online Sept. 26 in JAMA Network Open.

Olivier J. Wouters, Ph.D., from the London School of Economics and Political Science, and colleagues conducted a cross-sectional study analyzing 60 drugs approved by the U.S. Food and Drug Administration between Jan. 1, 2009, and Dec. 31, 2018, to examine the association between treatment costs and research and development investments.

The researchers observed no association between estimated research and development investments and log-adjusted treatment costs based on list prices at launch or net prices one year after launch. When 2021 prices were used to estimate treatment costs, this result held. No association was seen between estimated research and development investments and log-adjusted treatment at launch in the fully adjusted model or from 2021 in linear regression models.

“Drug companies should supply further data to support claims that high drug prices are needed to recover research and development investments, if this argument will continue to be used to justify high prices,” the authors write.

One author disclosed financial ties to the pharmaceutical industry.

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