The Cost of Innovation - Pharmaceutical Executive

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The Cost of Innovation
Highlights from "Large Molecules, Large Dreams: A Forum on Global Drug Pricing and Sustainable Medical Innovation," held August 12, 2004, at MIT's Sloan School of Management.

Pharmaceutical Executive


Global Disparities Jonathan D. Quick

President and CEO, Management Sciences for Health


Jonathan D. Quick
If we think back to 1986, the going price for triple therapy for AIDS was $10,000 in Africa or Europe. In 1997, the United Nations started negotiating and dropped the price down to $7,500. Two years later, Brazil had gotten treatments scaled up with legal competition (legal at that time under their own patent laws) and reduced the price to $4,500. Another year later, in 2000, the R&D companies got together with an accelerated access initiative, and through corporate initiative and responsibility they got the annual price down to $1,800 per person. A year later, Indian generics got it down to $1,000, and we're now somewhere under $500, perhaps under $200 depending on the market. So it's a story of a 95 percent drop over a period of six years through a combination of negotiation, competition, and corporate initiative.


Resources
Three conclusions: We live in a world of huge disparities, and differential pricing is inescapable. Differential pricing is technically, economically, and politically feasible. And there is, as yet, no single strategy for implementing it globally.


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