The $800 Million Pill: The Truth behind the Cost of New Drugs

Eugene Goldwasser retired in 2002 after a forty-seven-year career as a biochemistry professor at the University of Chicago. Like most academicians, he spent most of his working years laboring in obscurity. The primary focus of his research, his obsession really, resulted in just one major discovery. His colleagues admired his dedication. But some whispered about what he didn’t receive over his long career—the fame, the glory, and the money that rightfully should have been his from being one of the leading medical pioneers of the second half of the twentieth century. His discovery has prevented tens of thousands of...

In the waning days of World War II, President Franklin D. Roosevelt asked Vannevar Bush, the former dean of the Massachusetts Institute of Technology and his science adviser, to draw up a blueprint for how government should fund science in the postwar world. InScience, the Endless Frontier, which came out after Roosevelt’s death, Bush argued that government should limit its support to basic research, leaving use-oriented applied research to the private sector.¹ This would give university-based scientists freedom to pursue their intellectual curiosity. The report assured the president that if scientists came up with something novel and useful, the...

Monday, June 26, 2000—Human Genome Day in the nation’s capital. The rhetoric inside the White House East Room rivaled the steamy weather outside as an ebullient President Clinton welcomed the three scientists who symbolized the race to complete the Human Genome Project: James Watson, the cantankerous geneticist who had codiscovered the double helix structure of DNA a half-century earlier; Francis S. Collins, a gene hunter whose discovery of the cystic fibrosis gene a decade earlier had catapulted him into the front ranks of the nation’s genetic scientists and atop the massive federal program; and J. Craig Venter, the erstwhile...

The discovery of a drug combination capable of controlling the human immunodeficiency virus (HIV) was one of the great triumphs of biomedical research in the postwar era. Over the last quarter of the twentieth century, no disease spread greater havoc across the globe than HIV-caused AIDS (Acquired Immune Deficiency Syndrome). At century’s end, more than forty million people were infected, with AIDS threatening to devastate large swaths of the developing world, especially in sub-Saharan Africa. It is a mark of progress that public health officials and activists—who fought to bring the drugs to control AIDS into existence—have turned...

Hoffmann–La Roche’s AIDS scientists weren’t alone in dealing with executive suite problems. As the winter of 1991 melted into a typically slushy Chicago spring, the handful of researchers working on Abbott Laboratories’ protease inhibitor project suddenly found themselves operating in an environment dominated by corporate scandal.

Abbott, one of the largest employers in the suburbs north of the city, took pride in its conservative ways. Its sprawling Abbott Park campus had expanded steadily in the postwar years, fueled more by marketing acumen than a drive to produce medicine. The company traced its origins to a family-run pharmacy started by...

Combination therapy wasn’t on the minds of Abbott, Hoffman–La Roche, or Merck as they moved their most promising protease inhibitor candidates into full-scale clinical trials. They wanted block-busters, a billion-dollar seller. For AIDS, where the ultimate market size was thought to be limited, that meant monotherapy.

By the summer of 1993, Abbott Laboratories had already dropped its intravenously administered protease inhibitor that European physicians had presented in Berlin. Earlier that year, Kempf and his small chemistry team had come up with an analogue of the huge molecule that passed its initial test-tube experiments. Leonard quickly approved it for clinical...

If the government’s role in reducing AIDS mortality represents a great victory for the idea that directed research campaigns can substantially affect the history of an epidemic, the war on cancer is an entirely different matter. For more than half a century, all the weapons of directed medical research—extramural grants to academic researchers, intramural programs of research and drug development, public-private partnerships, and outright support of industry—have been deployed against cancer with far less satisfactory results.

It has been more than three decades since President Nixon signed the National Cancer Act. The government over those years spent more...

President Franklin Delano Roosevelt had every reason for optimism in the winter of 1936. He had just won reelection in a landslide, and the prospects for the more far-reaching of his New Deal reforms never looked brighter. But just before Christmas, close aides brought word that his only son, Franklin Delano Jr., had a bad case of tonsillitis. With her son’s fever soaring, Eleanor Roosevelt called in White House physician George Tobey Jr. He feared the worst. The infection had seeped into the blood, which in those days was a potentially fatal condition.

More out of desperation than any sense...

By the late 1990s, the pharmaceutical industry’s penchant for pursuing drugs of limited incremental value had reached a tipping point.

The Food and Drug Administration (FDA) approved anywhere from twenty-five to fifty new drugs (new molecular entities in FDA parlance) per year throughout the 1990s. In 2001 and 2002 the pace fell off sharply to fewer than twenty new drugs a year. While there was a handful of legitimate medical advances in any given year, the FDA designated the majority of new drugs as having “limited or no clinical improvement” over existing drugs. In 2002, for instance, just seven of...

On December 17, 2002, some of the nation’s leading heart physicians gathered at the National Press Club in downtown Washington, D.C., to unveil the latest news from the frontlines of antihypertensive research. Heading the panel of thought leaders were physicians from the federal government’s National Heart, Lung, and Blood Institute, which had just completed an eight-year-long test of four different bloodpressure control medications. Each drug in the trial represented a major class of antihypertensives. The trial enrolled more than forty thousand older Americans, making it by far the largest and best-controlled study of antihypertensive drugs in medical history.

The results...