As public R&D funding surges, so do drug costs

Written by Ilana Landau, Editor

The results of three pilot studies demonstrate that, despite large pubic funding for drug research and development (R&D), drug prices remain high.

Newly approved drugs are of increasingly high costs. Following the adoption of a resolution calling for greater medicinal pricing transparency by the WHO in May 2019, the Ludwig Boltzmann Institute for Health Technology Assessment (LBI-HTA; Vienna, Austria) developed methods for determining the extent of public and private funding for the research and development processes of approved drugs. The results of three pilot studies, in which the developed protocol was implemented, demonstrate that drug prices remain high despite large amounts of public funding.

The LBI-HTA sought to shed light on the transparency of R&D funding and the reasons for increasingly high drug costs. Claudia Wild, Head of LBI-HTA, explained: “High R&D costs are often cited by manufacturers as a reason for the high costs of their drugs, therefore transparency about public research funding contributions should be very important. However, this is precisely not the case.”

The LBI-HTA were driven to develop their own methodology for assessing and compiling the multiple information sources concerning public funds. The protocol was categorized into three stages: (1) the names of all constituent drug components were identified, (2) trial and patent databases were scoured to determine each drug’s approval pathway and (3) based on the information gleaned from stages 1 and 2, a systematic review of research grants was conducted.

Wild stated: “…we have piloted our method on three drugs and have been able to prove that all three drugs have received grants to the value of millions of Euros in several digits. These funds were provided at different stages of discovery and development of the drug by public or philanthropic sources.”

Despite various challenges encountered in the project, such as difficulties in obtaining discreet information of exact funding amounts, the LBI-HTA method signifies a significant step towards transparency concerning drug R&D funding and the investigation into the true reasons behind ever-rising drug costs.


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