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Science 303 (5665): 1729-

Copyright © 2004 by the American Association for the Advancement of Science

Drug Discovery

Donald Kennedy
Editor-in-Chief

In this special issue, we pay some serious attention to drugs and how they are made available for the myriad of useful purposes they serve in the world's health care system. The process of drug discovery is not only of scientific interest, it entails a fascinating interplay among a variety of economic, social, and political institutions. These include government or private nonprofit funders of basic research, such as the National Institutes of Health in the United States or the Wellcome Trust in the United Kingdom; academic scientists; multinational pharmaceutical firms and smaller biotech companies; and, at the end of the line, government regulatory agencies responsible for drug approval. And of course tax policies, intellectual property rules, and other national policies arch over the entire venture.

In many respects, what is happening to drug development in the United States mirrors the situation in other nations of the Organisation for Economic Co-operation and Development. The rate of introduction of new chemical entities has slowed despite the wealth of new technologies described in this issue on p. 1795. Mounting new discovery platforms, doing more combinatorial chemistry, and taking advantage of the new genomics revolution are promising, all right, but they are also expensive. So U.S. and multinational firms are increasingly responding with mergers, partnerships, and intensified promotion.

What they are apparently not prepared to do is to raise prices, and thereby hangs a tale that demonstrates why, in other respects, the U.S. situation is unique. Domestic U.S. prices for proprietary patented drugs are substantially higher than those in other developed nations. As was pointed out earlier in this space (Science, 15 August 2003), those price differentials have become a sharp political issue, with many U.S. consumers buying medicines online from different countries or traveling to import them directly. The origin of the disparity is straightforward. A government in control of a single-payer health care system can exert monopoly power against a manufacturer to drive prices down, but the fragmented set of insurers and health plans in the United States can't do the same. The result is that, to a large extent, U.S. health care consumers are subsidizing the cost of pharmaceuticals elsewhere in the world.

Figure 1

CREDIT: RUSSELL THURSTON/PHOTODISC/GETTY IMAGES

Of course, the rest of the world does not consist merely of other industrial nations, and poor countries in the grip of the AIDS crisis want antiretroviral therapies at a price they can afford. The world is finding it hard not to listen: The Gates Foundation and other funders have provided welcome subsidies for this work. But the pressure is on, either for big pharma to lower prices or for others to breach intellectual property protections so that the drugs can be made for less. The combination of developing-country demand and the desire of U.S. consumers for importation makes it politically difficult for the companies to raise prices: The response may be price control.

So here's the situation confronting the drug firms: The drugs cost more to make, but they can't charge more for them. What do they do? Increasingly, the U.S. market is driving them toward drugs aimed at the diseases of richer, older Americans and away from antimicrobials, vaccines, and the like. The effort to drive research toward AIDS and other infectious diseases drew a creditable response when it first began, but it now faces a premature death unless something is done.

A few remedies have been suggested. (i) Some would urge that U.S. Food and Drug Administration (FDA) requirements, sometimes viewed as a roadblock to drug development, be reduced. But it hasn't been shown that FDA is blocking the critical path, and most consumers would not stand for reducing its role. (ii) The government could increase its support for basic research and for development, especially for drugs targeted to infectious disease and "orphan diseases." That would shift a consumer subsidy into a taxpayer subsidy. But it will also give government more control over an industrial policy, and some won't like that. (iii) Finally, some revision could be undertaken of FDA's law as it defines the intellectual property regime. Any change would need to preserve innovation incentives for the research-intensive firms while offering more space for generic competition. And it would require a change in the Food, Drug and Cosmetic Act. That's difficult; we tried it once in my day and failed. That's why I tend to favor some version of (ii).



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