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Epilogue: New Drugs for Neglected Diseases

Published online by Cambridge University Press:  25 March 2011

THOMAS POGGE  and
AIDAN HOLLIS
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Extract

In a widely cited 2003 article, DiMasi, Hansen, and Grabowski estimated the cost of pharmaceutical research and development to be $1.1 billion (year 2000 U.S. dollars) per new medicine coming onto the market in 2001. They also estimate that this cost is going up at a real (inflation-adjusted) rate of 7.4% annually. According to these estimates, the innovation cost per new medicine today is about $2.1 billion (year 2000 U.S. dollars) or $2.65 billion (year 2010 U.S. dollars).

Type
Symposium on Global Bioethics
Information
Cambridge Quarterly of Healthcare Ethics , Volume 20 , Issue 2 , April 2011 , pp. 329 - 334
Copyright
Copyright © Cambridge University Press 2011

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References

1. DiMasi, JA, Hansen, RW, Grabowski, HG.The price of innovation: New estimates of drug development costs. Journal of Health Economics 2003;22:51–185.CrossRefGoogle Scholar

2. See note 1, DiMasi et al. 2003:181. The article explains why the cost is so high. One factor is risk: successful drug launches must bear the cost of unsuccessful efforts. Another factor is discounting: companies must pay for the work long before they reap any rewards. The authors report that companies value their capital at a real discount rate of 11% per annum. This means, for example, that a reward of $1000 in 2010 justifies an investment of $513 in 2003. Taking inflation into account, a reward in 2010 of $1000 (year 2010 U.S. dollars) justifies an investment in 2003 of only $433 (year 2003 U.S. dollars).

3. See note 1, DiMasi et al. 2003:181.

4. UNITAID was established by the United Nations to scale up access to drugs for HIV/AIDS, malaria, and tuberculosis in an effort to reach the Millennium Development Goals.

5. GlaxoSmithKline. Creating a pool of intellectual property to fight neglected tropical diseases, 2009; available at http://www.gsk.com/collaborations/patentpool.htm (last accessed 31 Jul 2010).

6. Hollis, A, Pogge, T.The Health Impact Fund: Making New Medicines Accessible for All. Oslo and New Haven, CT: Incentives for Global Health; 2008. Also available at www.healthimpactfund.org (last accessed 25 Jul 2010).Google Scholar

7. Pogge, T.World Poverty and Human Rights: Cosmopolitan Responsibilities and Reforms, 2nd edition. Cambridge, UK, Polity Press; 2008:202–221.Google Scholar

8. See Wikipedia for a good discussion, available at http://en.wikipedia.org/wiki/Financial_transaction_tax (last accessed on 25 Jul 2010).

9. For a detailed discussion, see Flynn, S, Hollis, A, Palmedo, M.An economic justification for open access to essential medicine patents in developing countries. Journal of Law, Medicine & Ethics 2009;37:184–209.CrossRefGoogle ScholarPubMed

10. Pang, T.Developing medicines in line with global public health needs: The role of the World Health Organization. Cambridge Quarterly of Healthcare Ethics, this issue, 290–297.Google Scholar

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12. Schroeder, D, Singer, P.Access to life-saving medicines and intellectual property rights: An ethical assessment. Cambridge Quarterly of Healthcare Ethics, this issue, 279–289.Google Scholar

13. Leisinger, KM, Schmitt, KM. Access to healthcare and the pharmaceutical sector. Cambridge Quarterly of Healthcare Ethics, this issue, 309–325.Google Scholar

14. Beetson, J.Collaborating with the pharmaceutical industry: An Aboriginal perspective. Cambridge Quarterly of Healthcare Ethics, this issue, 326–328.Google Scholar