Here's a departure from the industry line for you. GlaxoSmithKline ($GSK) CEO Andrew Witty says that, one fine day, new drug prices should drop--sometimes even below the cost of the older drugs they replace.
That's saying something. These days, new-drug launches go hand-in-hand with sticker shock. It's increasingly common to see new cancer treatments costing more than $100,000 per year. As Reuters notes, drugmakers blame high prices on the exorbitant costs of drug development--with $1 billion per new drug being the general rule of thumb.
But Witty called that $1 billion figure "one of the great myths of the industry," Reuters reports, because it includes the cost of R&D for failed drugs, too. "If you stop failing so often you massively reduce the cost of drug development," Witty went on to say.
So, as pharma grows more efficient about R&D, it should be able to lower prices, rather than raise them. "It's not unrealistic to expect that new innovations ought to be priced at or below, in some cases, the prices that have pre-existed them," Witty figures. "[I]t is completely normal in other industries."
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