Federal support is vital to U.S. leadership in drug development—but it cannot be used as an excuse for arbitrary price fixing, BIO’s Dr. Hans Sauer told a National Institutes of Health (NIH) workshop yesterday.
The strength of U.S. biotech: The United States leads the world in drug development, originating 62% of new drugs approved by the Food and Drug Administration (FDA), said BIO’s comments to NIH.
Who funds research? U.S. investment in basic and applied biomedical R&D in 2020 totaled approximately $245 billion: $61.5 billion from the federal government, $161.8 billion (66%) from the private sector, and $19.8 billion from foundations, academic institutions, etc.
What the government funds: The U.S. public sector “contributed directly to the invention of about 10-15% of new drugs over the past several decades.”
The role of NIH: “an important enabling role by funding basic research and generating new insights into biology and disease,” said Dr. Sauer, “advancing science and enriching the public domain with new knowledge.” (Biotech benefits from the results, though it’s hard to give a precise value.)
Why it matters: Some say NIH support should be repaid with arbitrarily reduced drug prices. But the private sector spends far more on research, and “the public and the private sectors, for the most part, fund research that is different but complementary.”
The bottom line: “The private sector assumes basically the entire risk that an experimental product will fail on the path of drug development,” explained Dr. Sauer. Trying to exact a price when drugs succeed “would only put brakes on the pace of biomedical innovation.”
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