The majority of American taxpayers' money is poured into basic biomedical research that eventually supports the development of drugs that pharmaceutical companies charge for exorbitant prices - and in other countries, for much less.

This seems unfair to Americans, but according to Bruce Stillman, president of Cold Spring Harbor Laboratory, if the United States does not underwrite the research, nobody else will.

"I see it, partly, as an altruistic thing by this country," Stillman said. "I know it costs the taxpayers money. But I think that's a good thing. If the United States doesn't do it, it ain't going to happen. Canada doesn't do it."

Cost of marketing drugs are too expensive


Stillman's lab played a key role in the development of one of the most expensive medicines on the marker, Spinraza, the first drug for spinal muscular atrophy - which was recently approved. The drug costs USD750,000 for the first year of treatment and USD375,000 for subsequent years.

"The drug price, we have no control over that, obviously," said Stillman, noting that not many would actually pay the list price. However, he acknowledged that the bridge between research laboratories and drug companies has to be closer as the question of who pays is an important dilemma.

But it is only because the cost to make drugs is too expensive for a research institute to handle therefore the stage when pharmacology and toxicology testing begins is usually the hand-off point from the lab to the company.

"In fact, the biopharmaceutical sectors spend more on R&D than the entire National Institutes of Health operating budget, with all biopharmaceutical companies investing more than USD70 billion in R&D," said Holly Campbell, director of communications for the Pharmaceutical Research and Manufacturers of America (PhRMA).

This debate was reignited due to a potential deal between the Trump administration and French pharmaceutical company Sanofi that grants them exclusive patents for a Zika vaccine.

Pharmaceutical industry is a risky business to be in


There are concerns that Sanofi will overcharge for the vaccine, which is common within the pharmaceutical industry. But drug development is expensive and furthermore, a decade ago, United Nations officials made it a requirement for the pharmaceutical industry to expand access to medicines to low- and middle-income countries.

This places the pharmaceutical industry in a fragile position as the companies try to aid the disadvantaged while maintaining profits and patent rights. Some countries have also attempted to test their rights under World Trade Organisation rules, dismissing patents to encourage production of lower-cost generics. Patient advocacy groups have also filed patent challenges against some companies.

Many companies heeded the UN call, but a new analysis has shown that there is not enough evidence to evaluate and report the effectiveness of these initiatives. This also makes it seem unfair to American taxpayers.

Greater transparency is a must


In an attempt to hold the industry accountable, the Access to Medicine Foundation, a nonprofit based in the Netherlands, regularly compiles an index to rank the progress made by each large drug maker. But the number and quality of evaluations for the effectiveness of these programs is lacking.

Despite the increase of the number of initiatives, only published evaluations could be found for seven initiatives, and the rest were not of great quality. This "raises questions about whether the resources involved are being allocated in line with the countries' national priorities," experts say.

It is also what makes it such a contentious issue as there is a lack of transparency and rigour in monitoring and evaluating the access-to-medicines initiatives as well as the link between prices and development costs. Experts urge for greater transparency from manufacturers to disclose R&D costs for drugs and evaluation of the initiatives.

“A market cannot function when purchasers have limited information and, in the case of prescription drugs, pricing is a black box. Prices for drugs are clearly rising at rates that far exceed inflation and the level of any rebates or discounts offered by manufacturers," Holley said. MIMS

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Sources:
http://www.healthline.com/health-news/taxpayers-fund-research-for-drugs#1
https://www.statnews.com/pharmalot/2017/04/06/access-medicines-evidence-lacking/
https://www.statnews.com/2017/04/06/drug-development-price