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Pharma is undermining the discovery of new drugs

Written by Diane Archer

Mariana Mazzucato’s op-ed in the Washington Post offers yet another reason why the federal government should be regulating drug prices. Pharma is not investing a meaningful amount of its enormous profits on drug innovations. In fact, Pharma is undermining the discovery of new drugs that we desperately need.

According to Mazzucato, the data show that nearly 80 percent of the new drugs that the FDA approves are variations on drugs that have already been on the market. And, even when the drugs are truly new, pharmaceutical corporations are not making new drug discoveries to help people with diseases where they cannot profit handsomely. Just one in 25 approved drugs around the world between 2001 and 2011 were aimed to help people with rare diseases.

Currently, it is legal for a drug company to run out a drug’s patent over 20 years, take that drug off the market to prevent generic competition, and reformulate its drug so that it is administered differently or at different frequencies. It can then get a new patent for its reformulated drug and extend its ability to control the price of the drug. Wherever, possible, that is what drug companies do.

How can we address this problem? The government should take a mission-oriented approach for the research and development of new drugs, much as it does for the development of breakthrough technologies for national security through DARPA, the US Defense Advanced Research Projects Agency. It should use taxpayer money for the public good, to benefit taxpayers–to drive important new drug discoveries that are needed and to ensure that the new drugs are priced fairly. That’s how the Internet was created, along with the microchip and other major technological advances. 

We need the US government driving critical medical breakthroughs. The US Department of Health and Human Services (HHS) should be promoting health care innovation, targeting the kinds of discoveries we most need. A well-functioning HHS would have more leverage over how its corporate health industry partners acted for the public good. HHS would ensure more transparency among pharmaceutical companies, so that the public better understood their costs, investments, and profits. Finally, HHS would demand fair drug prices. 

Today, pharmaceutical companies have far less financial incentive to develop drugs that cure diseases than to develop drugs that people must take for the rest of their lives to control their diseases. It is usually more profitable to keep someone on a drug for decades than to provide the person with a drug that ends their disease once and for all. Goldman Sachs analysts and others should not be asking, “Is curing patients a sustainable business model?”

We need to put patients ahead of profits. It is a matter of our health security and, as such, a matter of national security. 

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