Delinkage of the cost of research and development from drug prices
James Love, Director of Knowledge Ecology International
This was a fascinating talk that proposed an alternative model for R+D of new drugs that would reduce the cost of new drugs and improve access for all.
Love outlines how the current drug patent and monopoly for funding the R+D of new drugs has many challenges. Pharmaceutical companies invariably set prices for maximum profitability and costs have risen dramatically even over the past 10 years. The current trajectory means that high and middle-income countries will likely limit access and impose restrictions on those who receive these treatments, and resource-limited settings will face further inequities.
Love proposes an alternative model that funds R+D by “delinkage” of the cost or R+D of new drugs, from the final price of the product. Alternative funding models for R+D have been proposed; drug research grants and contracts, R+D subsidies, incentives and innovation prize funds.
Some of the above initiatives already exist. There are NIH and EU framework grants, R+D subsidies such as the Orphan Drug tax-credits which are funds available for R+D on drugs for rare diseases (apparently 47% of new US drug approvals in 2015 fell under this model).
Love proposes expansion of current incentives, and progressively switching from the current system of monopolies to alternative models of funding. Progressive delinkage mechanisms could be introduced by governments over time that sequentially move prices closer to the marginal cost of production of the drug.
Love talked about the $15 billion spent on HIV drugs in the US annually with the return of on average one new HIV drug per year. Recently Bernie Sanders in his US election campaign proposed that $3 billion of this money be set aside to fund R+D for new HIV drugs and at the same time eliminate monopolies. He also advocated setting aside funds to reward scientists and researchers who contributed to the development of a drug via open source platforms.
There seems to be growing support for Love’s model with many seeing the current system as unfair and ridiculously expensive. Apparently several members of the European parliament have expressed interest in the delinkage model, the Human Rights Council has asked states to support the principles of delinkage, India and the World Health Assembly have endorsed the model, the CEO of GSK has endorsed the delinkage model in the context of expensive drugs for rare diseases and several companies have endorsed it for the development of new antibiotics.
This issue has repercussions the world over, and is pertinent at a conference being hosted in sub-Saharan Africa that addresses the HIV and viral Hepatitis epidemics. While we come from a relatively privileged position in Australia, we do face shortages in provision of access to many of the new cancer medications, and one wonders how our health budget will fund the escalating pharmaceutical costs in the future. This talk outlined an elegant alternative model of funding R+D that would be more equitable and allow universal access to new drugs for all.