The Copley News Service this week sent out a review of “The $800 Million Pill” to newspapers in the chain. Hopefully, some will run it in their weekend editions.

Click on to read the review: Biotech and Big Pharma executives challenged about the high price of prescription drugs repeatedly defend themselves and their companies by citing the high cost of research and development. It costs about $800 million and takes a decade to bring a new drug to market, an industry-funded report from Tufts University found. The industry uses these findings like a shield to deflect criticism from consumers and the insurance lobby. In “The $800 Million Pill,” Merrill Goozner, a former chief economics reporter for the Chicago Tribune, crushes the study and the executives’ arguments like a tablet in a mortar and pestle.

Using his own analysis as well as public records, independent studies and even industry insiders, he shows that the cost is more likely in the range of $71 million to $250 million. The advertising campaigns for these new drugs, often hyping new versions of treatments already on the market, add millions to the cost of drugs while bringing nothing to the consumer, Goozner says.

“If the industry-funded academic economists at Tufts had factored out the half of industry research that is more properly categorized as corporate waste, their number would have been similar to that of the Global Alliance,” a nonprofit that commissioned a team of former drug company executives to build their own model of what it costs to develop a new tuberculosis drug. The estimate: between $115 million to $240 million.

Many a businessman may scoff at Goozner’s strident assertions. Ours is a capitalist society and drug companies, like any big business, must navigate competition and regulation while worrying about shareholders and the bottom line. But his book offers an eye-opening tour of the labyrinth that is drug discovery at a crucial time, for consumers traumatized by the wallop they receive with every trip to the pharmacy counter.

Goozner takes his readers into government and private industry labs and offers insights into the decisions made in corporate boardrooms. His heroes are the researchers who toil at the bench, sometimes for decades, driven more by the prospect of scientific breakthrough than the monetary reward of commercializing their discovery.

Eugene Goldwasser spent more than 20 years pursuing a single hormone that stimulates red blood cell production, a crucial discovery for anemia. The discovery paved the way for Amgen to become a biotech success story. It also set off a patent war that serves as an example of how drug prices can often reflect much more than the cost of research and development.

The villains in this tale are the corporate executives. They fund clinical trials simply to help sell yet another blood pressure control medicine, but don’t want to spend resources on a long-shot treatment for HIV.

A government lab or researcher funded through taxpayer-supported grants can search for years before finding a molecule that effectively treats disease. Drug companies then sweep in, license the molecule and begin taking credit for all of the work and resources that went into its discovery.

In the end consumers bear the burden of research and development. And they are being double-billed: First, their taxes fund the government research grants, and, later, at the pharmacy, they pay again.

It’s unlikely price controls will win Congressional support, Goozner said. He proposes that Congress create an independent institute on clinical practice within the National Institutes of Health, letting it conduct clinical trials that compare existing medicines. It would generate best-practice guidelines for physicians and help Medicare determine which drugs offer too little benefit for too high a price.

He suggests Congress address patent laws that impede research and drive up costs by allowing people to stake claim to products of nature. And he proposes the Food and Drug Administration’s approval process for new drugs require new products to be measured against other therapies where they exist.

“Unless the government helps the pharmaceutical industry by reforming its drug approval process in a manner that fosters innovation,” Goozner concludes, “the prognosis for the industry is grim.”

- Terri Somers.

Nature Magazine, owned by London-based Macmillan Publishers Ltd., is considered one of the world’s leading science journals. As a first-time, non-academic author, I should be honored that they chose “The $800 Million Pill” for its lead book review in this week’s issue. I’ve really been looking forward to my first review by someone who comes from the world of science and understands the interplay of scientific and economic realities discussed in the book.

But one has to wonder about what has happened to standards in the scientific publishing world when they asked a “scholar” from the American Enterprise Institute — an avowedly conservative think tank in Washington, DC that takes considerable funding from the drug industry — to write the review. Funding for John Calfee’s own research, which he discloses at the end of the review, comes in part from pharmaceutical firms.

The editors must have known there no possibility that the review would be positive when they sent it out to Calfee. As they say in England, that hardly seems cricket.

Despite the many positive things Calfee says about my writing and understanding of science and medicine, the review was largely a stale rehash of industry arguments that I debunk in the book. I won’t repeat those discussions here.

Rather allow me to point out that Calfee breaks the cardinal rule of fairness in book reviewing. You may quarrel with a person’s argument, but you should at least accurately present it at the outset of the review. He failed this basic test by misrepresenting my analysis of the $800 million cost-per-drug figure put out by industry-paid researchers.

He says my analysis largely rests on a Public Citizen analysis and a study by the Global Alliance for TB Drug Development. My narrative does go over those studies and the arguments they’ve engendered (the industry trade group hired the accounting firm of Ernst and Young to debunk the Public Citizen study). But my own analysis relies on the fact that at least half of industry R&D is wasted on drugs that add nothing to physicians’ armamentarium for fighting disease, and thus can more properly be categorized as corporate waste. He also says I “defy sound economic reasoning” by ignoring the “opportunity cost” question of R&D expenditures. In fact, I discuss that at length (I argue it’s an expense funded by current drug consumers) and quote academic experts to bolster my argument.

Calfee doesn’t mention either of these discussions. He describes my arguments as rehashes of others’ studies. Indeed, he ignores the fact that I specifically state at the end of the chapter that if you take these factors into consideration, the $800 million industry figure would be “similar to the Global Alliance” figure. That’s hardly “relying” on or “accepting” the results of their study.

There are other points in the review where Calfee makes basic mistakes (he calls Gleevec a biotechnology product) and inaccurately describes what I wrote. But suffice it to say here that when reading reviews by partisans in a debate — even in the pages of a prestigious journal — consider the source.

Here’s the relevant paragraph from the June 24, 2004 Nature review:

“Relying mainly on non-scholarly critics such as Public Citizen (a lobby
group in Washington DC founded by Ralph Nader) and the Global Alliance for
TB Drug Development, Goozner argues that DiMasi and colleagues grossly
overstated the true costs of developing useful drugs. He accepts instead the
Global Alliance’s estimate that discovering and developing a new
tuberculosis drug would cost only US$115-240 million. Essentially, Goozner
argues that the editors and reviewers of the Journal of Health Economics
overlooked some basic methodological flaws in the paper. His argument is
unpersuasive, though, partly because it defies sound economic reasoning on
opportunity costs. It also ignores important limitations in the Global
Alliance’s study of developing a hypothetical drug for a single condition
(tuberculosis) and using relatively small clinical trial sizes, non-market
cost data and highly conjectural failure rates.”