Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.
The current regime in the USA didn't happen for nothing. It's well-known now that pharma companies had long been exploiting the file drawer effect and p-hacking to inflate the apparent safety and efficacy of their drugs in their FDA filings. The decision a couple decades ago to cut that off did dramatically reduce the rate at which drugs win approval, and that's a very good thing.
This provides what to me is compelling evidence that the efficacy requirement by the FDA is wasteful.
Amount of homeotherapy currently on the shelves bring "penalties imposed by the marketplace on sellers of ineffective drugs" into a sharp contrast... People will take pure water if you tell them it works.
EDIT: But I suppose a complex measure of: removing efficacy requirements AND banning advertising to both consumers and doctors AND mandating pre-regisration of trials might lead to more drugs on the market with companies using efficacy trials to compete with each other and doctors selecting best drugs based on cost/benefit/harm analysis.
I'm sure there are loopholes that would be promptly exploited in this scheme given enough incentive though.
To be fair, if you tell them it works, people will take pure water and show noticable improvments over non-treatment. Personally I just take the placebo effect directly though.
I often see vague complaints about the regulations, but no one seems to have specific suggestions about how to lower drug development costs while still protecting patients.
Specific suggestion: get rid of efficacy requirement, keep safety requirement. Let doctors decide what works, as they currently do for off-label uses just fine.
Less extreme are antibiotics which can also have bad side effects, but are useful drugs because they actually kill bacteria. If they did not, the side effects would be unacceptable.
Or should the government make that decision for on-label uses and doctors make that decision for off-label uses? That's the status quo. Whatever argument you have for one half of that is an argument against the other half.
This is exactly how doctors determine what works, with or without the government. See the off-label discussion in the link above.
I'm not suggesting that current regulation by the FDA isn't flawed, or that it doesn't need an overhaul, but I think it's clear that there should be some proof that efficacy studies were done before a drug becomes widely available, especially when the potential damage done by a failed treatment is so high. The current opioid crisis has completely eroded any faith that the pharmaceutical industry is capable or willing to regulate itself.
Tons of drugs have been approved, only to be later pulled off the shelves. So despite the massive cost, delays, etc. the process has failed at least 35 (!) times:
https://prescriptiondrugs.procon.org/fda-approved-prescripti...
If nobody is marketing, that definitely might increase return on capital.
If you pass a law banning drug marketing, you may be able to get the same health outcomes with less overhead. Of course, this ignores all the hypothetical cases where marketing helps, like increasing awareness of a beneficial treatment that was not previously well known.
This does not explain the increase in cost of insulin, which was invented in 1923.
It's newer formulations that are expensive, and those are still protected by patents.
> In the United Kingdom 1,000 iu costs the NHS £7.48, while in the United States this amount is about $134.00.