Separating the cost of biopharmaceutical research and development from the final market price of medicines would misalign incentives, raise bureaucratic costs, and limit innovation.
Opponents of market-based drug development are working with intergovernmental organizations to replace intellectual property rights with government-managed prizes as the main incentive to drive biopharmaceutical innovation.
Vice President for Global Innovation Policy, ITIF
Advocates claim “delinking” drug prices from R&D investments will make innovative medicines far cheaper. But the truth is it would almost surely lead to less new drug development and slower progress in improving human health.
For prizes to work, governments would have to replace $180 billion per year in private medical R&D with taxpayer funds—unlikely, given the budget challenges many governments face and the fact many of the benefits would flow to other countries.
The true value of a new medicine is hard to measure before it is created, so prizes could be underfunded. That would lead to fewer companies taking the risk of investing in expensive R&D, and hence to fewer new medicines.
Handing over significant control of global biomedical R&D flows to government bodies would be a recipe for inefficiency and for politicizing drug development.
The current market-based system delivers a tremendous amount of biomedical innovation. Intergovernmental organizations should focus on solutions that improve it, including expanding drug access, rather than promoting flawed concepts like delinkage.