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Sally Pipes: Not That the Obama Administration Has Noticed, But Drugs Are Expensive to Develop May 14, 2012

Last week, pharmaceutical company Roche announced that it was scrapping work on a once-promising cholesterol medicine at the recommendation of its independent data and safety monitoring board. Had the drug proven successful, it would have likely delivered sales of a billion dollars a year. Instead, Roche lost millions researching something that will never reach patients.

This episode underscores just how difficult and expensive the innovation process for drug-development is.

Not that anyone in the Obama Administration has noticed. Obamacare will hit pharmaceutical firms with more than $20 billion in new taxes over the next ten years. Some firms may conclude that they can’t shoulder both a hefty tax bill and the risk of a multimillion-dollar research failure.

That would be tragic news not just for patients waiting for cures but for the American economy, which benefits tremendously from the massive sums that pharmaceutical companies sink into research and development.

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