The future of drug development

February 17, 2004

In this month's essay, Tim Hubbard and Jamie Love argue that we need a better way to research and develop new drugs. They contend that the existing system for drug development--rooted within the pharmaceutical industry--is inefficient and unsustainable. Drugs are too expensive and are beyond the reach of many people in the developed as well as the developing world.

The inadequacies in the current system, suggest Hubbard and Love, are a consequence of a business model that uses a single payment to cover both the costs of manufacture, marketing and sales of a drug and the cost of the research and development (R&D) carried out by manufacturers to discover it. The current system is supported by a vigorously-enforced intellectual property regime, which protects the financial interests of companies and reaches across borders so that poorer countries cannot develop cheaper versions of the drug.

Aside from the inadequate availability and high price of drugs, other unwelcome side-effects of the existing business model are a lack of information sharing amongst researchers, and a consequent reduction in the pace of discovery. There are also strong incentives to develop drugs that have little if any increase in efficacy over existing drugs--so-called me-too drugs. And it is not surprising that many of the major global health challenges, which tend to affect poorer nations, receive short shrift from companies that focus their attention on more lucrative health markets.

So what's to be done? Hubbard and Love propose that the markets for R&D and the markets for products should be separated. Researchers and drug developers would be compensated, but not through a marketing monopoly. Large cash prizes to successful firms or non-profit drug developers, direct public sector involvement in drug development, new open collaborative development models, or government imposed research mandates would be possible economic models for funding drug development. Money could be raised and managed through taxes and traditional government institutions like the NIH, or through "bottom up" mechanisms such as employee contributions to competitive intermediates that fund R&D--analogous to pension funds--or through other approaches.

Such a system would reduce the influence of intellectual property rights, and lead to much greater openness in the area of drug research. Competition would still exist for the manufacture and distribution of drugs, but prices would inevitably drop. There are many obstacles and challenges to the development of the new drug R&D market, but Hubbard and Love believe that the economics can be worked out and will "change the world," by greatly expanding access to new medicines and promoting a more efficient system of drug development that addresses real health priorities.
citation: Hubbard T, Love J (2004) A New Trade Framework for Global Healthcare R&D. PLoS Biol 2(2): e52 DOI: 10.1371/journal.pbio.0020052.

link (not active during embargo):

Tim Hubbard
Wellcome Trust Sanger Institute
Cambridge, Cambridgeshire CB10 1SA
United Kingdom


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