This blog discusses latest trends and the role technology plays in the life sciences industry. It focuses on Infosys life sciences services and solutions and how they can help accelerate business.

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How Smarter Manufacturing Can Drop Drug Prices to Mere Cents

I think it's safe to say that much of what we do in the marketplace and much of what we demand as consumers is predicated on the old saying "time is money." We're willing to pay a premium to go faster, wait in shorter lines, and to get responses in the flick of an eyelid. 

But what if I told you that in certain cases, those premiums were enormous? Would you be willing to slow down a process or take a bit more time if it meant saving a considerable amount of money? Before you answer this question, consider what the CEO of a discount airline recently said during an interview. What consumers say is often a lot different from how they act. 

This airline executive made the statement in response to questions that suggested his airplanes had less legroom than any of his competitors, that stewardesses charged $3 for a cup of water, and that the overhead bins had billboard advertisements on them. Over chat rooms on the Internet and in consumer magazines, customers said they overwhelmingly loathed the airline. But it seems it was also one of the most successful such airlines in the business. People claimed they didn't like the airline's cost-cutting tactics ... until it came time to buy a ticket!

I think the same dynamics apply to the pharmaceutical industry. In my recently published book, Pharma's Prescription: How the Right Technology Can Save the Pharmaceutical Business, I suggest that the industry needs to re-think its manufacturing practices. If it did, the benefits to the consumer would be readily apparent. Here's what I mean: Imagine you can obtain a list of ingredients that, when mixed according to the company's specifications, produces the proper dose of a drug you were recently prescribed? 

You would be dealing with a handful of ingredients that would cost collectively far less than the pharmaceutical in final pill or liquid form. By far less I mean really, really less - one thousandth of what you normally pay. What I've just described might sound familiar because it's how druggists used to operate a century ago, and before that, how many people made home remedies. But in its modern incarnation, this plan would involve space-age materials that simply leave the mixing to the end user. Doing so can reduce the cost of a drug to one-thousandth its current price.

Think if you could buy a steaming hot cup of coffee readily brewed at Starbucks for $4,000. Or if you could take the beans home, grind them, and brew them for $4 a cup. Which scenario would you likely choose? This stark contrast would be unthinkable anywhere but the modern pharmaceutical industry. The U.S. Department of Commerce recently put out a highly disputed (by Big Pharma) report that attempted to show the true cost of a person's prescription drugs. For example, the cost of Celecoxib, the active ingredient in Celebrex, is 61 cents although the retail price of a 100 mg tablet in a 100-tablet package is $130.27. The active ingredient in Claritin is 71 cents although a 100 mg tablet of Claritin in a 100-tablet package costs $215.17. 
So I ask the question: Would a typical consumer be willing to buy his medicine for 61 cents plus $5 shipping and handling and then take the time it would take to brew a pot of coffee in order to prepare the final form of the drug? Or, using the time-is-money reasoning, would that consumer prefer to buy the drug ready-made for $130.27? In fact, in my book, I say that if I were working in a pharmaceutical manufacturing plant, I'd be starting a pilot program to do just this. My hunch is that smart pharmas will begin to consider this minuscule, home-based manufacturing alternative in the near future.

When a pharma company ships its drug, along with any necessary binders, preservatives, etc. directly to the patient or caregiver, there's no shipment and storage hold-up at the formulation plant, or at distribution companies and retailers. The person who needs the drug and who holds the prescription receives the drug directly.

I know what some of you are thinking: This solution to the runaway cost of prescription drugs is an old solution and calls on Victorian notions of mixing together remedies. But my response is: So be it. Do consumers criticize IKEA for selling their furniture in a form that requires a final assembly step after the customers takes it home? Of course not. They value the cost-savings and convenience of the overall product.
It wouldn't be such a bad thing for consumers and enterprises alike to re-think many of the accepted norms in the pharmaceutical industry. It's high time we begin to come up with a new prescription and mode of treatment for what's ailing that business.

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