Institute president says drug costs continue to climb

The Edmond Sun
June 8, 2011
By James Coburn
Copyright © 2011, The Edmond Sun, Okla.

The growth of the pharmaceutical industry is declining with slow growth progressing in the research and development areas, William Orr said.

The Edmond Rotary Club featured Orr, Ph.D., Wednesday to speak on the high cost of prescription drugs. Orr is presi-dent of Lynn Health Science Institute, is clinical professor of medicine at University of Oklahoma Health Sciences Center and is adjunct professor at the Air Force Academy.

Orr said it takes about 15 years to develop a chemical compound and get approved by the Federal Drug Administration for consumer use with a cumulative cost of about $1.5 billion. Only 22 percent of drugs are approved for the market, Orr said. Sales from products also pays for research, he added.

The cost for developing drugs will continue to increase due to technology and complex diseases such as Alzheimer’s disease, he said.

“Economic constraints of decreasing drug company profits will limit drug development,” Orr said.

Eli Lilly and Company recently lost $750 million when a drug proposed for Alzheimer’s disease was pulled during phase three of clinical trials, Orr noted. A drug was developed to arrest Alzheimer’s certainly would cost thousands of dollars a month.

Alzheimer’s disease gnaws at the core of life, robbing the memory of 70,000 Oklahomans, according to the Alzheimer’s Association.

“If you actually look at how much of the health care dollar goes toward drugs — it’s 10 percent,” Orr said. “So if you took every dollar that was spent on drugs in this country it would effect the overall cost of health care less than 10 per-cent.”

Pharmaceutical companies have exclusive rights to a patented drug for 15-17 years, Orr said. Ten of those years is spent on developing the drug.

The generic cost of a drug is about 10 percent of an original drug because research and development is avoided. There is a 35-40 percent decline of revenue worldwide by pharmaceutical companies, Orr said.

“This exactly parallels the decrease that you see in the prescriptions that are written on patent because it’s a declining revenue,” Orr said.

Orr is on the advisory board/panel of several pharmaceutical and medical service companies.

Rotary’s worldwide collaborative efforts have contributed $500 million to the polio vaccine and distributing it world-wide, Orr said.

“As a result in 1994, polio was declared eradicated to Americans,” Orr said.

Edmond Rotary meets at noon every Wednesday at Henderson Hills Baptist Church, at 15th Street and the east I-35 Service Road.

Interested parties are invited to attend weekly Rotary meetings. Lunch is available for $12.50 Reservations may be made by contacting club secretary Allison Calhoun at acalh@cox.net

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