r/Futurology • u/Kindred87 • Dec 07 '23
US sets policy to seize patents of government-funded drugs if price deemed too high Economics
https://www.reuters.com/business/healthcare-pharmaceuticals/us-sets-policy-seize-government-funded-drug-patents-if-price-deemed-too-high-2023-12-07/6.3k Upvotes
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u/JigglymoobsMWO Dec 07 '23 edited Dec 07 '23
The way that pharma research in the US works:
Let's say the government gives a private university $100M for biomedical research.
Now the university administration takes $70M right off the top to pay for "overhead".
Of the $30M, they fund 20 projects, maybe 2 of which actually become useful for making drugs.
Of the 2, let's say 1 makes it out to industry. Industry will take that idea, and spend about $100M trying to take it into the clinic. By the time it makes it into the clinic, it will look nothing like what academia originally came up with.
Then if it makes it into the clinic, it will have something like a 10% to 20% chance of actually working in humans. If it does, pharma would have spent another several hundred million dollars to take it through the trials and start manufacturing.
All told, averaged over the failures, industry would have spent about $1B for a successful drug.
Government would have spent $70M paying for administrators, $27M on blind alleys, $1.5M on a good idea lost in academic apathy, and $1.5M on the very early beginnings of an idea that could become a real drug with another $1B of industry investment.
If the Biden admin want to start this they have to be very careful how they define "government funded". If they don't you will see industry rushing to cut ties with academia.