• by Thom Forbes  @tforbes, April 4, 2011

A recently published study finds that the mean R&D cost of developing a pharmaceutical is about $76 million in today's dollars -- far less than the $1.3 billion that the Pharmaceutical Research and Manufacturers of America (PhRMA) says it takes to bring a new drug to market.

"The study's authors, Donald W. Light of the University of Medicine and Dentistry of New Jersey and Rebecca Warburton of the University of Victoria in Canada, systematically dismantle what they call 'the wholly artificial "fact" of average R&D costs per new drug' by removing inflated multipliers and calculating the tax breaks drug companies get for their R&D, among many other steps," writes columnist Michael Hiltzik in the Los Angeles Times.

The industry bases its cost projections on a 2003 study out of the Center for the Study of Drug Development, which is an industry-funded institute at Tufts University. And while the center's director of economic analysis, Joseph A. DiMasi, defends its findings, he tells Hiltzik that he is not entirely comfortable with the way PhRMA uses a "cost per drug" calculation because "people who are not familiar with the studies might make the wrong interpretation."

That would, of course, include most of us.

Hiltzik goes on to make the case that when most laymen hear the $1.3 billion figure they assume that represents the out-of-pocket cost of development. In the real world, you pay your $10 bucks and you get into "Rango." In the world of pharmaceutical R&D, as I understand it, that ticket price would be exponentially higher due to accounting legerdemain such as calculating how much you could have made if you'd not squandered the tenspot on a movie ticket but had instead invested it in some high-yielding instrument like a corner lemonade stand.

In the course of his story, Hiltzik mentions that the pharmaceutical industry has spent nearly $2.1 billion in its lobbying efforts over the last 10 years in Washington, D.C. The No. 2 big spender, insurance, spent $1.5 billion. Hiltzik's source is the aptly named OpenSecrets.com, which has been taking data such as these, which are filed with the Senate Office of Public Records, and making them accessible to the public online since 1996. It is a project of The Center for Responsive Politics, which was founded in 1983 by U.S. Sens. Frank Church (D-Idaho) and Hugh Scott (R-Pa.)

The concept of making secrets open reminded me of another story in the news -- dimly -- over the weekend. The Obama administration released its plans to require certain establishments to list the amount of calories in its food and beverage offerings on Friday, just in time for the lethargic Saturday news cycle.

When the administration blew an earlier deadline for issuing the proposed requirements, Time's Tim Newcomb wrote:  "Maybe this is just the FDA's way of treating us all with kid gloves. Or, maybe they're just scared of our eye-popping --and gut-expanding -- reaction to the new rule that requires restaurants with at least 20 chains to post calories on menus."

What the proposal is most notable for, however, is what it doesn't include: movie theaters, airplanes, bowling alleys, amusement parks, hotels and other establishments where the sale of food is not a primary business. "The agency said it excluded them in part because they generally don't present themselves to the public as restaurants," writes Janet Adamy in the Wall Street Journal.

But, as Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest tells Adamy, "As far as your waistline goes, it doesn't matter whether you're sitting at a restaurant. All those extra calories will make you fat -- and, in fact, gigantic tubs of fatty popcorn will especially make you fat."

Beer, wine and liquor is also exempted, presumably because they are regulated by the Alcohol and Tobacco Tax and Trade Bureau and not the FDA.

While we're on the subject of open secrets, here's the only sure-fire way to lose weight: expend more calories than you ingest. That's much easier to do if you've got the data at hand, of course. Calories have been listed in a lot of establishments in New York for a while now and I know I pay attention when making choices, but it appears that not everyone does.

Marketing DailyM's Karlene Lukovitz recently reported on a study by The NPD Group that found that calorie counts had a relatively small effect on how consumers ordered in fast food joints. The research found that quality -- meaning "fresh, natural and nutritious" -- is the most important attribute to people looking for healthier options when they eat out, according to Bonnie Riggs, NPD restaurant analyst and author of the report.

The Journal's Adamy cites two other studies. One, published in Health Affairs in 2009 found that menu labeling had no influence on total calories purchased by New Yorkers. And a Stanford University study of New York City Starbucks eateries found average calories per transaction fell by 6% after calorie labeling started.

Are secrets like calorie counts that should be open something that bowling alleys really want to make that much ado about? Strangely enough, they're not on the Top 20 list of D.C. lobbyists either.