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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    • "In other instances, the terms pioneering and me too are invoked without a clear sense of the relationship between these terms and the US Food and Drug Administration's (FDA) NDA classifications. Some researchers focus on the development of new molecular entities (NMEs) (or new chemical entities) (DiMasi, Hansen, and Grabowski 2003; Sampat and Lichtenberg 2011), while others focus on drugs granted FDA " priority review " status (Light and Lexchin 2012). However, FDA classifications allow for more fine-grained distinctions than have previously been utilized by researchers. "
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