Even before manufacturing costs set in, the costs of research and development for new life-saving medicines is astronomical, they say. What is not mentioned is that a significant amount of that research is paid for by the government through the National Institutes of Health. Scientists at NIH, for example, played such a crucial role in the development of AZT that it took a complicated federal lawsuit to make sense out of various claims to the patent rights to the powerful AIDS medication. The court finally decided on technical grounds that NIH employees could not be owners of the patent. But all parties admitted that a test developed at NIH had provided the proof AZT maker Burroughs Wellcome needed that its product increased patients' resistance to the AIDS virus.
Companies claim one reason drug prices arehigh is that they do research to find new medicines.
All of the AIDS organizations have challenged the industry to name any drug for any disease that a company has been the primary funder for. And figures from two large drug firms, Merck and Pfizer, show that in 1997 only 11.2 percent of their revenues went for research and development, while a much larger percentage, 28.9, went for administration and marketing. The pharmaceutical industry has grown rich on the backs of its American customers partly because it has managed to avoid dealing with them through more powerful entities, such as the government. Because the U.S. government's Medicare program does not pay for prescription drugs, for example, its officials have never taken on the job of bargaining with the pharmaceutical companies over prices. That's one of the reasons why the American health care consumer pays the highest prices in the world for drugs.