What Are The Respective Roles Of The Public And Private Sectors In Pharmaceutical Innovation?

Department of Health Policy and Management, School of Public Health, Columbia University, New York City, NY, USA.
Health Affairs (Impact Factor: 4.97). 02/2011; 30(2):332-9. DOI: 10.1377/hlthaff.2009.0917
Source: PubMed


What are the respective roles of the public and private sectors in drug development? This question is at the heart of some policy proposals, such as those that would give the government a share of profits from drugs at least partly developed with federal research dollars. This paper provides empirical data on these issues, using information included in the patents on drugs approved between 1988 and 2005. Overall, we find that direct government funding is more important in the development of "priority-review" drugs-sometimes described as the most innovative new drugs-than it is for "standard-review" drugs. Government funding has played an indirect role-for example, by funding basic underlying research that is built on in the drug discovery process-in almost half of the drugs approved and in almost two-thirds of priority-review drugs. Our analyses should help inform thinking about the returns on public research funding-a topic of long-standing interest to economists, policy makers, and health advocates.

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    • "The question is upon the method of procuring and administering them. (Burke 1790/ 1987, p. 53.) Proponents of the Intellectual Property Forgiveness theory claim that pharmaceutical companies could effectively release intellectual property rights in developing and 10 Recently, Sampat and Lichtenberg (2011) reported an even greater role for the relative importance of 'indirect' public funding in pharmaceutical drug development, using patent citation data as a surrogate indicator for public sector influence. In their analysis of 379 drug approvals (1998–2005), approximately 25 % cite at least one at least one publicly funded patent (p. "
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    ABSTRACT: Many people believe that the research-based pharmaceutical industry has a ‘special’ moral obligation to provide lifesaving medications to the needy, either free-of charge or at a reduced rate relative to the cost of manufacture. In this essay, I argue that we can explain the ubiquitous notion of a special moral obligation as an expression of emotionally charged intuitions involving sacred or protected values and an aversive response to betrayal in an asymmetric trust relationship. I then review the most common arguments used to justify the claim that the pharmaceutical industry has a special moral obligation and show why these justifications fail. Taken together, these conclusions call into question the conventional ideologies that have traditionally animated the debate on whether the pharmaceutical industry has special duties of beneficence and distributive justice with respect to the impoverished in dire need of their products.
    Journal of Business Ethics 07/2013; 122(3). DOI:10.1007/s10551-013-1773-4 · 1.33 Impact Factor
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    • "The information and electronics sector ranked second in intensity at 7.0 percent. " Moreover, new drugs often build on upstream government research (Sampat and Lichtenberg (2011)). "
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    ABSTRACT: We examine the impact of pharmaceutical innovation, as measured by the vintage of prescription drugs used, on longevity, using longitudinal, country-level data on 30 developing and high-income countries during the period 2000-2009. We control for fixed country and year effects, real per capita income, the unemployment rate, mean years of schooling, the urbanization rate, real per capita health expenditure (public and private), the DPT immunization rate, HIV prevalence and tuberculosis incidence. Life expectancy at all ages and survival rates above age 25 increased faster in countries with larger increases in drug vintage. The increase in drug vintage was the only variable that was significantly related to all of these measures of longevity growth. Controlling for all of the other potential determinants of longevity did not reduce the vintage coefficient by more than 20%. Pharmaceutical innovation is estimated to have accounted for almost three-fourths of the 1.74-year increase in life expectancy at birth in the 30 countries in our sample between 2000 and 2009, and for about one third of the 9.1-year difference in life expectancy at birth in 2009 between the top 5 countries (ranked by drug vintage in 2009) and the bottom 5 countries (ranked by the same criterion).
    Health Policy and Technology 07/2012; 3(1). DOI:10.1016/j.hlpt.2013.09.005
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    • "One source for funding such research could be the National Institutes of Health (NIH), a leading source of federal grant funding and the organization charged with ensuring that the resulting intellectual property in the biomedical sciences is properly managed (Sampat and Lichtenberg 2011). The NIH's director, Francis Collins, recently announced the creation of a new institute to enhance drug development, called the National Center for Advancing Translational Science (NCATS) (Collins 2011). "
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    ABSTRACT: With the development of transformative drugs at a low point, numerous commentators have recommended new legislation that uses supplementary market exclusivity as an incentive to promote innovation in the pharmaceutical market. This report provides an historical perspective on proposals for encouraging drug research. Four legislative programs have been primarily designed to offer market exclusivity to promote public health goals in the pharmaceutical or biomedical sciences: the Bayh-Dole Act of 1980, the Orphan Drug Act of 1983, the Hatch-Waxman Act of 1984, and the pediatric exclusivity provisions of the FDA Modernization Act of 1997. I reviewed quantitative and qualitative studies that reported on the outcomes from these programs and evaluated the quality of evidence generated. All four legislative programs generally have been regarded as successful, although such conclusions are largely based on straightforward descriptive reports rather than on more rigorous comparative data or analyses that sufficiently account for confounding. Overall, solid data demonstrate that market exclusivity incentives can attract interest from parties involved in drug development. However, using market exclusivity to promote innovation in the pharmaceutical market can be prone to misuse, leading to improper gains. In addition, important collateral effects have emerged with substantial negative public health implications. Using market exclusivity to promote pharmaceutical innovation can lead to positive outcomes, but the practice is also characterized by waste and collateral effects. Certain practices, such as mechanisms for reevaluation and closer ties of incentives programs to public health outcomes, can help address these problems.
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