There’s a lot of talk and research about the drug industry, including its levels of innovation, its pricing patterns, transparency of clinical trials, industry changes over time, and how the industry is and should be regulated. But one thing that usually flies way under the radar is the question of actually making drugs – cranking out capsules, tablets, aerosols, gels, and liquids day after day. We tend to think that manufacturing can be taken for granted, that it’s high quality, cheap, easy, high-tech, and unproblematic.
In a new paper up on SSRN and forthcoming in BC Law Review next year, I argue that these widely-held assumptions are wrong. Drug companies tend to spend about twice as much on manufacturing as they do on R&D, and a lot of that is unnecessary. Essentially, the industry wastes tens of billions of dollars per year on inefficient manufacturing techniques which have stayed largely unchanged for decades. Increasing drug shortages, higher drug prices, and higher levels of drug recalls are the unfortunate result. Read More