Pub­lic funds help late-stage de­vel­op­ment of about 25% of new drugs, study finds

One in four new drugs ap­proved in the US be­tween Jan­u­ary 2008 and De­cem­ber 2017 re­ceived di­rect fund­ing from pub­lic re­sources for late stage re­search or through spin-off com­pa­nies cre­at­ed from pub­lic re­search in­sti­tu­tions, a study pub­lished in the BMJ on Wednes­day found.

As the drug pric­ing de­bate has ac­cel­er­at­ed in re­cent months, the de­bate over whether pub­lic or pri­vate en­ti­ties do the ma­jor­i­ty of drug de­vel­op­ment work has con­tin­ued, with the gen­er­al as­sump­tion that the Na­tion­al In­sti­tutes of Health (NIH) funds much of the ear­ly-stage re­search (the Con­gres­sion­al Re­search Ser­vice ex­plained in April how NIH aids ba­sic re­search that trans­lates in­to phar­ma­ceu­ti­cal de­vel­op­ment) while bio­phar­ma­ceu­ti­cal com­pa­nies most of­ten fund the lat­er clin­i­cal stages that lead to the ap­proval and mar­ket­ing of new drugs.

Re­searchers at the Pro­gram On Reg­u­la­tion, Ther­a­peu­tics, And Law (POR­TAL) at Har­vard Med­ical School in­ves­ti­gat­ed 248 nov­el drugs in the 10-year win­dow and found that 62 (25%) had doc­u­ment­ed late-stage re­search con­tri­bu­tions from a pub­licly sup­port­ed re­search in­sti­tu­tion or spin-off com­pa­ny. Most of the drugs were iden­ti­fied as hav­ing pub­licly spon­sored re­search or spin-off con­tri­bu­tions through patent da­ta avail­able through the Or­ange Book.

In ad­di­tion, 48 of the drugs (19% of all new ap­provals) had ev­i­dence of di­rect pub­licly sup­port­ed re­search, and all but one re­ceived fund­ing re­lat­ed to the drug’s “ini­tial dis­cov­ery, syn­the­sis or oth­er key in­tel­lec­tu­al prop­er­ty lead­ing to a patentable in­ven­tion.” Of these 48 drugs, 38 (80%) had at least one patent held by a pub­licly sup­port­ed re­search in­sti­tu­tion or spin-off com­pa­ny.

“These pub­licly spon­sored drugs were more like­ly to re­ceive ex­pe­dit­ed reg­u­la­to­ry des­ig­na­tion and be first in class, sug­gest­ing high ther­a­peu­tic im­por­tance,” the re­searchers wrote.

And the oth­er 14 (6%) drugs de­vel­oped by spin-off com­pa­nies were based whol­ly or in part on pub­licly sup­port­ed re­search, ac­cord­ing to the study. For a spin-off ex­am­ple, the study dis­cuss­es Gilead’s he­pati­tis C treat­ment So­val­di (so­fos­bu­vir), which orig­i­nat­ed at Phar­mas­set (ac­quired lat­er by Gilead), but was orig­i­nal­ly a spin-off com­pa­ny based on fed­er­al­ly fund­ed re­search from Emory Uni­ver­si­ty in At­lanta.

“Iden­ti­fi­ca­tion of drugs with late stage, pub­licly sup­port­ed re­search con­tri­bu­tions, par­tic­u­lar­ly those for which such in­sti­tu­tions hold key patents, could rep­re­sent a use­ful pol­i­cy lever. Such drugs in­clude nusin­ersen (Spin­raza, for spinal mus­cu­lar at­ro­phy; list price US$750,000 (£610,400; €685,000) in the first year of use), eliglu­s­tat (Cerdel­ga, for Gauch­er dis­ease; $310,250/year), and en­za­lu­tamide (Xtan­di, for prostate can­cer; $129,000/year). The prices of these drugs, each of which re­lied on sub­stan­tial aca­d­e­m­ic de­vel­op­ment, have been crit­i­cized in the US and all are sub­stan­tial­ly low­er in oth­er coun­tries,” the au­thors note.

They al­so ex­plain how us­ing so-called “march-in” rights, which could al­low the gov­ern­ment to use a patent­ed prod­uct for its own pur­pos­es and which pres­i­den­tial hope­ful Eliz­a­beth War­ren has said she would use, could help fight “crit­i­cal drug short­ages or ex­treme price hikes.”

The au­thors wrote in the con­clu­sion: “These find­ings pro­vide ad­di­tion­al da­ta for the on­go­ing de­bate on sup­port for pub­lic sec­tor bio­med­ical re­search, and the best ways to take these key con­tri­bu­tions in­to ac­count in de­ter­min­ing the own­er­ship of and fair prices for new drugs, es­pe­cial­ly those priced at very high lev­els.”

Re­search


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