‘Big pharma’ refers to global pharmaceutical and biomedicine companies that lobby governments, media and other entities to expand their influence. In spite of being responsible for the modern innovations in medical devices and drugs, progress for research and development for new drugs or treatments is painstakingly slow. Like software updates or patches, the development for treatment has seen incremental therapeutics, such as small changes to existing formulations but rarely does the public see any ground breaking discovery and even rarer still are cures which are a small step away to being considered as unicorns. There is a perverse notion that pharmaceutical companies are deliberately hiding cures from the public and focusing their research
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Despite the vast number of people affected by these diseases, research and development (R&D) for vaccines for these diseases have been minimal. These diseases that are rampant in undeveloped nations, remain uncharted territory because its citizens are unable to pay for treatment, and as a result, it is considered unprofitable. Generally, it is 13 times more likely for a drug to be developed for treating disorders to the central nervous system, diabetes and cancer which are prevalent in developed nations over neglected diseases that kill millions in third world countries (Trouiller, Olliaro, Torreele, Obrinski, Laing and Ford 2188). An excerpt from the World Health Organization (pars. 4) states:
A similar conflict of interests exists in the area of drug research and development particularly in the area of neglected diseases. The private sector dominates R&D, spending millions of dollars each year developing new drugs for the mass market. The profit imperative ensures that the drugs chosen for development are those most likely to provide a high return on the company’s investment. As a result, drugs for use in the industrialized world are prioritized over ones for use in the South, where many patients would be unable to pay for …show more content…
According to Forbes, in 2015, the health technology sector, which includes pharmaceutical research reported an average 21% net profit which takes the top spot as the most profitable industry in the US. The vast majority of the health technology sector, including the twenty largest pharmaceutical companies are for-profit organizations. Critics of the big pharma point to monopolistic pricing and high profits. The belief is that pharmaceutical companies are hoarding money instead of researching. On the contrary, R&D costs have increased at an annual rate of 7.4% above inflation from 1980 to 2005 (Grabowski 460) and through their research they have found that 25% of each million dollar change in cash flow is directed towards increased drug expenditures.(Grabowski 462). From 1962-1996, the growth rate of deflated gross margins was 4.23%, lower than the 7.51% growth rate found for R&D (Scherer The Link Between 217). In fact, the opposite is true since companies have a vested interested to increase their research and development expenditures as it is also their source of income. They must innovate and develop new treatments and/or cures in order to remain
Despite the vast number of people affected by these diseases, research and development (R&D) for vaccines for these diseases have been minimal. These diseases that are rampant in undeveloped nations, remain uncharted territory because its citizens are unable to pay for treatment, and as a result, it is considered unprofitable. Generally, it is 13 times more likely for a drug to be developed for treating disorders to the central nervous system, diabetes and cancer which are prevalent in developed nations over neglected diseases that kill millions in third world countries (Trouiller, Olliaro, Torreele, Obrinski, Laing and Ford 2188). An excerpt from the World Health Organization (pars. 4) states:
A similar conflict of interests exists in the area of drug research and development particularly in the area of neglected diseases. The private sector dominates R&D, spending millions of dollars each year developing new drugs for the mass market. The profit imperative ensures that the drugs chosen for development are those most likely to provide a high return on the company’s investment. As a result, drugs for use in the industrialized world are prioritized over ones for use in the South, where many patients would be unable to pay for …show more content…
According to Forbes, in 2015, the health technology sector, which includes pharmaceutical research reported an average 21% net profit which takes the top spot as the most profitable industry in the US. The vast majority of the health technology sector, including the twenty largest pharmaceutical companies are for-profit organizations. Critics of the big pharma point to monopolistic pricing and high profits. The belief is that pharmaceutical companies are hoarding money instead of researching. On the contrary, R&D costs have increased at an annual rate of 7.4% above inflation from 1980 to 2005 (Grabowski 460) and through their research they have found that 25% of each million dollar change in cash flow is directed towards increased drug expenditures.(Grabowski 462). From 1962-1996, the growth rate of deflated gross margins was 4.23%, lower than the 7.51% growth rate found for R&D (Scherer The Link Between 217). In fact, the opposite is true since companies have a vested interested to increase their research and development expenditures as it is also their source of income. They must innovate and develop new treatments and/or cures in order to remain