By MICHAEL FOSTERGetty ImagesThe U.S. government’s $7 billion purchase of four blockbuster drugs for memory and cognitive dysfunction may be a bargain for drug companies but it is also an expensive gamble.
The price tag for a single, highly effective drug has reached over $100 billion, according to data from drug company Medtronic, which is behind the deal.
That includes a $3.6 billion price tag, which will be paid over 10 years.
That represents nearly $15 billion more than the previous price tag.
The drugs have all been approved by the Food and Drug Administration and all are highly addictive.
The price of the drugs has been projected to rise as the market expands.
According to Medtrol, the drugs are expected to be approved for a combined price tag of between $40,000 and $60,000 for a 50-year supply.
That would cost drug makers a total of about $150 billion over the next decade.
But for every dollar that drug makers spend on drugs, the cost of treating a patient who has memory or cognitive impairment grows.
Medtrol estimates that the price tag will be $30,000 to $60.
The cost of a patient’s care will grow as the drug becomes more expensive, making the average price for such care nearly twice that of a non-addicted person.
“You’re not going to see a price increase in the near term, but if you have a high-income person with an ADD, the price will rise because you’re going to have to increase the price of their medication,” said Medtroll CEO Mark Schreiber.
“The question is what you’re paying for.”
Drug makers are expected not only to recoup their investment, but also make money from their investments, Schreib said.
But Medtroller’s data suggests that the pharmaceutical industry is not ready for the high price tag it is facing.
“There is no guarantee that you’re getting a good product that will work and provide the kind of long-term results you want,” Schreitzer said.
“And that’s the issue.”
Medtronic said it would take the drugs several years to be fully effective and cost $60 billion to manufacture them.
The company is working on another round of drug approvals.
That deal, which includes the blockbuster anti-epilepsy drug Avastin, is expected to cost $45 billion to $50 billion.
Medtrop, a drug company founded by Medtruil’s Schreid, said it could be approved within the next year.
Schreiber said that while he is optimistic about the prospects of the drug companies and the American public for the next 10 years, he worries that the cost for the new drug could be too high for most Americans to afford.
“We don’t think there’s a way that the average person is going to be able to afford to take care of their mental health needs in the long run,” Schrieb said.
“I think it’s a good bet that a lot of people are going to pay more.”
For patients, the most expensive part of the deal is the additional costs of the medications.
Schreber said the prices of the four drugs will be much higher than the cost to patients of other medications, such as the older antidepressants.
“This is going into people’s pocketbooks for a long time to come, not just for the lifetime,” Schrebber said.
The costs of drug development are a major concern for pharmaceutical companies.
The industry is facing an increasing number of drug costs and high margins.
Medrop, which was founded by Schreis, said its sales have been flat since the financial crisis, with profits down more than 40 percent in each of the past three years.
The company has not been profitable since 2007.
The Drug Enforcement Administration says the four blockbuster medications, including Avastan, are among the most powerful drugs available today.
Medopro, a second-generation drug developed by Medropro, was approved by FDA last year for the treatment of mild to moderate Alzheimer’s disease.
The drug will be licensed for use in the United States by the end of the year.