Plunder drugs: why Americans believe they have to put up with pharmaceutical profiteering.

• Author: Brownlee, Shannon

$800 Million Pill: The Truth Behind the Cost of New Drugs

By Merrill Goozner

University of California Press, $24.95

I have only two regrets over the life I led in my twenties. I should have gone on that sailing trip to the South Pacific with a group of entomologists seeking to study the insects on the exotic Marquesas Islands, instead of rushing back to "college after my year off. My other regret is once back at school, I failed to heed the advice of the fellow graduate student who told all of us in the biology department at the University of California that we should serape together every penny we had and invest in a startup biotechnology company called Amgen. Had I listened to him, I might be cruising the South Pacific in my own yacht instead of writing book reviews, because anybody who plunked down $100 in the mid-1980s on Amgen would have shares worth more than $1.5 million today.

Today, Amgen is the world's most successful biotechnology company, hailed regularly by Wall Street and the media as a shining example of the marriage between scientific ingenuity and the American entrepreneurial spirit. It is still headquartered in Thousand Oaks, Calif., the bedroom community of ranch houses and shopping malls an hour west of Los Angeles, where it was founded by a small group of scientists from UCLA in 1980. Back then, the company had no products, no warehouses, no laboratories--merely a handful of investors willing to bet that the fledgling firm could turn ideas into real drugs using recombinant DNA technology. Nine years later, Amgen launched its first product, Epogen, a genetically-engineered form of erythropoietin, one of the proteins made by the body that stimulates the production of red blood cells. Today, the company makes more than $5 billion a yeas, a third of which is profit, selling just three products. Epogen alone brings in over $1 billion, most of it from about 300,000 Americans on kidney dialysis, who would suffer debilitating anemia without it.

Epogen is truly a wonder drug. It eases many of the miserable symptoms that dialysis brings. But you don't have to be an economist to figure out that it is also incredibly expensive--among the most costly drugs on the market. The federal government picks up the tab for Epogen through the Medicare program that pays for dialysis. The company doesn't try to justify its high price on the basis of manufacturing costs; the recombinant DNA technology used to make Epogen is commonplace. And it...