Why Our Drugs Cost So Much

Patient Expert

Almost everyone who has diabetes relies on one or more drugs to help us manage it. But most of them are expensive, and the U.S. Food and Drug Administration has approved far fewer diabetes drugs in the past 10 years than in the previous decade.

At the annual meeting of the American Diabetes Association in Boston that just ended, thousands of diabetes professionals listened with interest as four experts explained why. I participated in the entire conference and made a point to be in the audience as four experts spoke on the “Costs of Medications for Diabetes.”

One of the most interesting and important talks of the entire conference was the first of these. Joseph DiMasi, PhD, the director of economic analysis at the Tufts Center for the Study of Drug Development, is the expert in this area. He spoke on “Regulation and Economics of Drug Development.”

Drug costs have gone way up recently, Dr. DiMasi says. And in the question and answer session after he talk he said he expects the trend to continue at least in the short term.

Diabetes drugs between 2000 and 2014 have taken the FDA an average of 5.7 years to approve, Dr. DiMasi told us. While this may seem to be a long time, it is less than the average for all drugs, which is 6.8 years.

Our Low Priority

But the FDA has a system of prioritizing drugs by class, and diabetes drugs come in last. They have the lowest priority. “Strikingly, none of the 17 diabetes drugs approved since 2000 had a priority rating from the FDA.” Since 2008, the FDA has taken 2 years more to approve a diabetes drugs than it took earlier.

In the question and answer period following Dr. DiMasi’s talk one doctor commented that he was astonished by the low prioritization of diabetes. “I was astonished too,” Dr. DiMasi replied. “The burden of this disease is high.”

The FDA Approves Few Drugs

Only about 12 percent of all drugs that “enter the clinical pipeline,” i.e. are in what we call in Phase 1, get approved. This is one reason why I don’t write about them until they complete Phase 3, when the FDA approves them for sale. In fact, we can’t use them until about a year later when pharmacies have them for sale.

But one of the biggest reasons why we have to pay so much for our drugs is that they cost the pharmaceutical companies so much. In actual cash developing each new drug costs the company an average of $1,395,000,000. In fact, their total cost including cash outlays and the capitalized or time cost of development is an average of $2,558,000,000.

“Looking specifically at diabetes drug development,” he concluded, “we see that development time and trial sizes have increased significantly. This indicates that development costs of diabetes drugs have increased significantly, perhaps at a higher rate than drugs in general.”

You may wonder why I write about the high cost of our diabetes drugs, when I have said again and again that I cover news that you can use. We do have the option of managing our diabetes without drugs. Some people with type 2 diabetes can control our blood sugar by following a low-carbohydrate diet, as I have recommended here.

See more of my articles about how to manage diabetes:

Negotiate for Your Diabetes Drugs

Cutting the Cost of Diabetes

Know the Rules to Receive Free Diabetes Medications from Manufacturers