Affordable innovation: future directions in pharmaceutical policy

In 2009, Jayadev and Stiglitz [1] proposed ‘two ideas’ to increase innovation and reduce pharmaceutical costs and prices. These were the use of value-based pricing and promoting public funding of clinical trials. Since then, NICE has tried and not yet succeeded to introduce value-based pricing, Persson and Jonsson [2] suggest that international reference pricing should cease, Gilead has made billions on the basis of exorbitant pricing of new products for hepatitis C, and prices for new products for cancer are causing concern even in the US [3]. At the same time, there has been considerable work on how to promote research and development to meet health needs in developing countries [4], the reported cost of drug development seems to continue to increase [5], the structure of the multinational industry has changed significantly [6], there are major area of market failure such as antibiotics, and investment in public-private partnerships to promote innovation continues to grow. Given this complex landscape, this abstract briefly reviews the current ideas and strategies to promote innovation in pharmaceutical development. It provides a review of some of the issues about pricing and affordability of new medicines, and some options for ensuring that innovation is affordable. These options are likely to require some significant changes in our current approaches to negotiating pharmaceutical prices with suppliers, increased global and regional collaboration as well as increased transparency about clinical effects that are relevant to patients, costs of research and development and explicit consideration of willingness to pay by different countries. The problem of declining innovation in the pharmaceutical industry has been well described [6]. Trouiller et al. summarised the problem in 2002 [7], showing how few molecules had been approved by the FDA that were of relevance to neglected tropical diseases. The Priority Medicines for Europe and the World Report in 2004 [8] was one response, to identify priority products for potential development by European pharma. The regulatory framework for orphan drugs in both the USA and Europe was another mechanism [9] and similarly, the push for paediatric medicines tried to use incentives (patent protection) as well as sanctions to encourage needed product development. In 2012, the report [4] by the Consultative Expert Working Group on Research and Development identified a group of proposals that they considered most likely to promote innovation in research for products relevant to low and middle income countries. These were: a ‘Global Framework’ on research and development, open approaches to research and development and innovation, pooled funds, direct grants to companies, milestone prizes and end prizes and patent pools. They made recommendations on how much they thought countries should contribute to financing research and development activities, and also suggested that the WHO should take a coordinating role, including a global health research and development observatory. Another example of promoting innovation may be the increasing number of public-private partnerships. There are the well-established entities, such as MMV and DNDi who have a portfolio of products for malaria and neglected tropical disease respectively. New products from both are on the market. Another venture, the Innovative Medicines Initiative is the biggest public-private partnership to date, and is also hoping to promote the development of innovative medicines.