Development of a National Public Pharmaceutical Research and Development Institute

Abstract

The high cost of prescription drugs has featured prominently in the 2020 presidential campaign, reflecting the challenge millions of Americans face in affording their medications. Of greatest concern have been routine price increases of existing brand-name drugs and rapidly escalating launch prices of novel brand-name drugs. For example, of 36 top-selling brand-name drugs available in 2012, 16 (44%) more than doubled in cost by 2019, while the average annual cost of a new brand-name cancer drug now exceeds $150,000.

Many of these products would not have made it to market without taxpayer-funded support. The US National Institutes of Health (NIH) alone accounts for more than half of the research and development (R&D) spend reported by major pharmaceutical companies each year.5 This funding was linked at some level to the development of all 210 novel brand-name drugs approved between 2010 and 2016.6 Other public entities, such the Department of Defense and state organizations like the Cancer Prevention and Research Institute of Texas,7 also offer important support. Traditionally, funding from such institutions has covered basic and early-stage translational science, but a quarter of novel small-molecule brand-name drugs approved over the past decade were based in part on key late-stage publicly-supported contributions.

To better account for these contributions, some policymakers have proposed instituting fair pricing terms on applicable drugs. In August 2019, for example, Sen. Chris Van Hollen (D-MD) and Sen. Rick Scott (R-FL), introduced the We Protect American Investment in Drugs Act (We PAID) Act, which would establish a Drug Affordability and Access Committee to determine reasonable prices for drugs with patents disclosing federal funding.