At the Intersection of Health, Health Care and Policy Cite this article as: Ernst R. Berndt, Deanna Nass and Murray Aitken Pharmaceutical Innovation: The Authors Reply Health Affairs, 34, no.5 (2015):883 doi: 10.1377/hlthaff.2015.0281
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Pharmaceutical Innovation: The Authors Reply In response to Pricivel Carrera’s letter regarding our article (Feb 2015), we note that our analysis was intended as an objective economic assessment of both revenue received and costs incurred by the pharmaceutical industry over time. We therefore included in revenue all net sales accrued by pharmaceutical companies in commercializing their products, regardless of source. On the cost side, we similarly aimed to include all operating costs incurred by pharmaceutical companies in commercializing their products, regardless of the nature of the cost. We used estimates from other researchers’ published work, which typically extrapolated from industry fi-
nancial statements. We did not seek to differentiate or categorize the different types of costs beyond conventional classifications of cost of goods sold and selling, general, and administrative costs. The operating costs we used were necessarily averages and therefore do not apply to any particular company or group of companies. Research and development costs, also derived from published research, similarly included all costs, regardless of purpose or source. Any costs not considered operating costs would not have been included in our economic analysis. Ernst R. Berndt Massachusetts Institute of Technology CAMBRIDGE , MASSACHUSETTS Deanna Nass and Murray Aitken IMS Institute for Healthcare Informatics PLYMOUTH MEETING , PENNSYLVANIA
May 2 015
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