Healthy Skepticism Library item: 20194

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

New framework needed for drug development
PharmacoEconomics & Outcomes News 2004 Feb 28; 447:

Full text:

The current business model that is used to fund researcher and development (R&D) of new medicines must change, say Dr Tim Hubbard from the Wellcome Trust Sanger Institute, Cambridge, UK, and Dr James Love from the Consumer Project on Technology, Washington, US.

They argue that, under the existing system, new drugs are unaffordable for many people in both the developed and developing world; this is directly attributable to the business model using a single payment to cover both the cost of manufacture of a drug and the manufacturer’s expenditure on R&D to discover this drug. Intellectual property rules protect the financial interests of pharmaceutical companies; a 20-year marketing monopoly on a patented invention prevents competition from manufacturers of generic medicines.

Other failings associated with this business model include the lack of free exchange of information between researchers and a consequent reduction in the progress of research, note Drs Hubbard and Love. The existing system also rewards products that offer little if any increase in efficacy over existing drugs; so-called ‘me too’ products. An additional problem is that pharmaceutical companies focus their R&D priorities on the more lucrative health markets, in preference to researching diseases that primarily afflict the poor.

These problems could be overcome by the creation of separate competitive markets for R&D and sales, suggest Drs Hubbard and Love. They say that a new virtual market in R&D could provide incentives to develop new drugs, with nationally directed R&D funds compensating researchers and drug developers through various means, such as large cash prizes to successful firms or non-profit drug developers, direct public sector involvement in drug development, or government imposed research mandates.

If we can change the trade framework for global healthcare and move away from marketing monopolies, we will have a system of drug development that addresses real health priorities and one that enables medicines to be accessible for everyone, conclude Drs Hubbard and Love.