The accusation that pharmaceutical companies in the US are taking a “free ride” on public investments in scientific research is not supported by the evidence, a new report argues.

Case studies of 35 drugs and drug classes identified in the scientific literature as important and/or among the most prescribed in the US during 2007 show that, while basic research occurs in both the public and private sectors, the applied science of drug development and clinical refinement is conducted almost entirely by the private sector, says the Manhattan Institute, a pro-free market think tank.

“It is those efforts that ultimately allow new scientific discoveries to be translated into new medicines,” adds the report by Benjamin Zycher, senior fellow at the Manhattan Institute for Policy Research, Joseph DiMasi, director of economic analysis at the Tufts Center for the Study of Drug Development and Chistopher-Paul Milne, the Tufts Center’s associate director.

In particular, the report takes aim at prominent industry critic Marcia Angell, former editor-in-chief of the New England Journal of Medicine, who has claimed that most of the innovation in the drug sector comes from academic research supported or conducted by government agencies – notably the National Institutes of Health.

In her book The Truth About Drug Companies, Angell asserts that learning about a disease or condition “is usually the beginning of the ‘research’ part of R&D, and it can take a very long time – sometimes decades. There is no question that this is the most creative, and the least certain, part of the R&D process. Contrary to industry propaganda, it is almost always carried out at universities or government research labs, either in this country or abroad. In the United States, most of it is supported by the National Institutes of Health”.

For the Manhattan Institute, this claim is a step towards drug price controls. “If the centrality of pharmaceutical research funded by the NIH is the reality – if private-sector research and development investments do not yield important scientific advances – then policy questions surrounding drug prices (federal negotiation of prices for Medicare Part D; importation of price-controlled medicines from abroad; FDA regulation of the industry) might be easier to resolve,” the report comments.

On the contrary, it maintains, the available literature “makes it clear that the scientific contributions of the private sector were crucial for the discovery and/or development of virtually all of the 35 drugs and drug classes examined in this study”.

Central advances
More specifically, the authors found that private-sector research was responsible for “central advances” in basic science (biological processes, etc) for seven of the drugs/classes studied, in applied science (compounds exploiting targets, etc) for 34 of the drugs/classes and in improved clinical performance/manufacturing processes for 28. “In short”, they comment, “all or almost all of the drugs and drug classes examined in this study would not have been developed – or their development would have been delayed significantly – in the absence of the scientific or technical contributions of the pharmaceutical firms.”

The intention, the authors insist, is not to downplay the contribution of research conducted at universities and government laboratories, which has been “an indispensable component of the advance of pharmaceutical science and the development of new medicines”. But research efforts funded by the NIH and the pharmaceutical industry occupy “very different – but complementary – niches in the process of drug development”.

Research conducted at government or university laboratories “tends to be concentrated in the basic science of disease biology, biochemistry, and disease processes”, the report says. “A major goal of that work is the identification of biologic targets that could prove susceptible to future drug candidates. Basic research often yields advances that cannot be patented and that often are made long before the subsequent scientific and clinical work that leads to viable new therapies.”

For their part, the scientific contributions of the private sector “have been weighted heavily, though not exclusively, toward the applied science of discovering ways to exploit the findings of basic science. This scientific work can be characterised as the discovery, synthesis, testing, and (often complex) manufacturing of candidate compounds intended to exploit biologic targets for the purpose of curing medical conditions or mitigating their adverse effects”.

The high rates of economic return seen from publicly funded pharmaceutical research and development “depend in substantial part on subsequent investment by private companies, without which most of the pharmaceutical products offering those benefits would not be developed”, the report argues. Policies threatening that investment could “reduce sharply the economic benefits of NIH research efforts, as well as the immense medical benefits derived from the continuous development of new and improved medicines”, it warns.