Restore a better balance of funding for biomedical research
The pharmaceutical industry said that if the United States cuts astronomical drug prices paid by American consumers, vital innovation will be devastated.
This is not true. There are ways for the United States to reduce drug prices while maintaining and perhaps even accelerating its engine of innovation.
Over the past several decades, the United States has largely privatized its biomedical research and development not by intention but by default. A Research! America The analysis shows that the private sector accounted for two-thirds of the $ 194 billion spent on biomedical R&D in the United States in 2018, when the analysis was completed, while federal government spending was only 22%, of which most of it came from the $ 37 billion funded. by the National Institutes of Health.
The private sector dominates biomedical R&D in the United States for two reasons.
The first is that Congress tightly controls the annual appropriations for the NIH, so that it funds only a fraction of the grant applications it receives.
Take the National Institute of Allergy and Infectious Diseases, led by Anthony Fauci, who is the beating heart of the work to fight the Covid-19 pandemic and other infectious diseases. This year is funding only about a sixth requests received from researchers trying to fight the wide range of potential infectious threats to Americans: Covid-19, certainly, but also Zika, dengue, new influenza viruses, Ebola, antibiotic-resistant superbugs, etc. . .
The second reason is that businesses have money to spend. Congress has given private industry the freedom to set drug prices, which translates into huge profits. Due to federal patent protection and exclusivity grants, many drugs in the United States face virtually no price competition for decades after their release. Industry has even devised ingenious ways, building what are known as patent thickets, to delay the entry of competitors well beyond the time when the patents should have expired.
And consolidation among generic drug manufacturers reduced competition in this sector.
There is nothing wrong with strong R&D funding by the biopharmaceutical industry. On the contrary, I believe it is essential to have a dynamic health sector.
But the balance in the United States between public and private funding for R&D is shifted.
Public funding is the main driver of real scientific breakthroughs that the industry ultimately brings to market. In fact, industry biomedical R&D depends on federal research funding by those who work in universities, nonprofit hospitals and research institutes to generate the new ideas that have the potential to conquer – with l aid from industry – the country’s main killers and cripples.
Take the story of one of the most remarkable biomedical advances in human history: the mRNA vaccine, which most people now know as “Moderna” or “Pfizer”. The work that made this vaccine possible has been going on for decades at Vanderbilt University, the Massachusetts Institute of Technology, the University of Pennsylvania, and the NIH itself, mostly funded by federal dollars. No NIH funding, no mRNA vaccine.
Here’s the lurking question: How many more mRNA-like breakthroughs would be possible if the National Institute of Allergy and Infectious Diseases funded a third or half of its grant applications, rather than just a sixth?
NIHs are more likely to tackle important research that is financially unattractive to industry because application markets may appear small or target economically disadvantaged populations. The drug companies aren’t suing them because they are unlikely to be profitable, but that won’t stop the NIH. And it’s not uncommon for financially unattractive issues to yield fundamental biological information that transforms healthcare forever.
How to correct this imbalance and further support state-funded R&D? By making Medicare pay less for prescription drugs and using those savings to fund NIH research.
Here is one way it might work. The Elijah E. Cummings Drug Cost Reduction Act (HR 3), which was passed in the House of Representatives, would give the federal government new authority to negotiate Medicare drug prices for commonly used pharmaceuticals. It is expected that save around $ 500 billion over 10 years. The bill would net the NIH nearly $ 8 billion over 10 years. It’s just a down payment on what’s needed, but it’s a start.
In addition to providing additional public funding for research, curbing high prescription drug prices would provide much-needed financial assistance to Americans paying less for their drugs.
Drug prices in the United States are currently unsustainable. Americans pay multiples what citizens of other countries pay for drugs, forcing some to incur crushing debt or forgo needed drugs. It also contributes to soaring premiums that make insurance unaffordable for tens of millions of Americans.
Fears that shrinking industry profits would hurt sustainable innovation and the future health of Americans would be offset by increased federal research funding leading to more truly breakthrough scientific breakthroughs.
Industry shuns essential basic research because it does not produce short-term profits. But once state-funded innovations are sufficiently advanced, industry can develop them to make fundamental advancements in human health.
The United States needs the optimal balance between public and private research and responsible stewardship of health care dollars. By directing the funds saved from reducing drug prices to NIH and other public investments in research, we can achieve all of these things while making industry investments in research more efficient and productive, by giving him better ideas for marketing and reducing our spending on prescription drugs.
David Blumenthal is a physician and president of the Commonwealth Fund.