The Revenue Effect

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ACSH Founders Circle member Dr. Henry Miller wrote the New York Times July 10, 2005 about approving drugs for narrow groups of patients:

To the Editor:

Although better targeting of drugs to appropriate patient groups will let drug companies be more efficient in clinical trials, the approach could have a downside in post-marketing revenues ("Blockbuster Drugs Are So Last Century," July 3).

The approach will likely lead to product labeling that designates a drug for smaller patient populations. For example, more than 70 million Americans suffer from some form of arthritis, so drugs approved today for that condition would have a vast market. But we know that arthritis is more than a hundred different conditions, and if these were better differentiated and drugs were specifically aimed at only one or a few of these subpopulations, the market for each drug could shrink.

A complementary goal must be to reform governmental oversight of drug development, so that both the direct and indirect costs of regulation are more moderate and more in line with those in the rest of the world.

Henry I. Miller, M.D.
Stanford, Calif., July 5
The writer, a fellow at the Hoover Institution, was a Food and Drug Administration official from 1979 to 1994.