Delinking Pharmaceutical R & D Costs to Promote Innovation and Access to Affordable Medicines
The pharmaceutical industry often defends shameful price gouging of consumers by arguing that their high profits fund the research and development of tomorrow’s new miracle cures. There is robust debate about the degree to which lowering drug prices would hurt pharmaceutical innovation. The current system holds consumers and governments hostage to pharmaceutical company business models in a manner that is inherently unethical. Think of the cancer patient who has to shell out $30,000 in co-insurance to live, and if not, then die.
The concept and practice of “delinkage,” in which the invention of new medicines is delinked from high drug prices transcends this old debate and envisions a brighter more humane future…one with robust pharmaceutical innovation.
This concept comes across as hyper-complicated, intellectual and pie in the sky but it’s not at all. Delinkage occurs when new medications are not subject to monopoly prices. Today, using private and public financing, biopharmaceutical companies create new drugs on which they own a patent, meaning no one else can make and sell that drug. Pharmaceutical companies then charge the highest possible price they can get away with, which will yield the greatest profits for their executives, shareholders and, to be fair, to make new drugs. Delinkage proposals envision pharmaceutical funding that leads to new drugs, which can be made by multiple companies and manufacturers so that competition keeps prices lower.
There are “push” and “pull” mechanisms that de-link the cost of research and development from drug prices. The “push” model includes public funding, grants, subsidies and tax credits. The U.S. already provides a lot of “push” through its public funding for pharmaceutical research via the National Institutes of Health, but that funding does not delink the research from prices: it actually foots the bill for pharmaceutical companies’ R&D. Where publicly financed new drugs lead to patents in the public domain, allowing generic firms to market and sell the new drugs, we find delinkage.
Grants and subsidies, for example, enable research teams to create new molecular entities that lead to clinical trials on prospective medications, which are also funded by grants and subsidies. The new medications will not be owned by one pharmaceutical company. Instead, many pharmaceutical companies could compete to manufacture and market the new drugs.
In the “pull” model of delinkage, prize funds would be available for innovators that develop a new medicine based on the importance of the new drug to the field of health. The innovator would be paid directly and the medicine could go to market at a low price.
U.S. Senator Bernie Sanders has been a major proponent of delinking R & D from drug prices. To lower HIV/AIDS drug costs around the world, Sen. Sanders put forth a plan that would “establish a multibillion-dollar prize fund to incentivize drug development. This prize fund would replace our country’s broken system that drives drug prices up through government-sanctioned monopolies.”
Delinking R & D from drug pricing has gained global support including from the Kingdom of the Netherlands, the Government of India, and the Human Rights Council, which recently adopted a resolution for States to apply and support the principle of delinkage.
The United Nations High-Level Panel on Access to Medicines published a landmark report which calls for delinking drug prices from R&D costs. The panel urged governments to ensure increased access to essential medicines through greater transparency in drug pricing, citing estimates of drug prices between $150 million and $4 billion per medicine. The panel also wants disclosure on the real prices paid by insurers and governments for drugs, after discounts. To read the full UN report, click here.
The current model of pharmaceutical R&D, based on drug company profits is not wiped away by new and untested delinkage efforts. They can co-exist and potentially overlap with the goal of an increasing share of pharmaceutical innovation arising from new models associated with delinkage.
In the U.S., the organization, Knowledge Ecology International, has taken the leading role in promoting delinkage. To educate the public, KEI launched the website www.delinkage.org at which you can find more information.