Researchers say pharmaceutical 'innovation crisis' is a myth

Two professors, including one from the Philadelphia area, wrote this week in the British Medical Journal that cries from the pharmaceutical industry over an "innovation crisis" borne of government intervention is a myth.

The real innovation crisis, say Donald Light and Joel Lexchin, stems from current incentives that reward companies for developing large numbers of new drugs with few clinical advantages over existing medicine.

A link to the paper is here.

Light is a psychiatry professor at the University of Medicine and Dentistry of New Jersey, a visiting researcher at Princeton, a network fellow at Harvard and a senior fellow at the University of Pennsylvania's Center for Bioethics. Lexchin works at the School of Health Policy and Management at York University in Toronto.

Using their own work and citing others, Light and Lexchin argue that pharmaceutical companies, especially large ones, have a "hidden" strategy of producing safely profitable drugs that buffer patent cliff losses on new and distinct medicine, though they are not always safe for patients. They argue innovation has not been slowed by FDA approval rates, that costs of producing new drugs are inflated to serve industry needs, that too much of company budgets go toward marketing and legal defense, including to protect patents.

Like others, they argue that national governments should fund regulatory agencies such as the FDA and European Medicines Agency completely since it is necessary for public health, and not rely on industry fees to fund operations.

On patents, they argue for, well, eliminating them on drugs. The rewards for true innovation would be cash bonuses for inventors. The government and private insurance costs of the bonuses would be more than offset by the lower costs paid to drug companies through current reimbursement programs.

"Finally, we should consider new ways of rewarding innovation directly, such as through the large cash prizes envisioned in U.S. Senate Bill 1137, rather than through the high prices generated billion dollars a year from all federal and non-federal health by patent protection," the authors wrote.

"The bill proposes the collection of several billion dollars per year from all federal and non-federal health reimbursement and insurance programs, and a committee would award prizes in proportion to how well new drugs fulfilled unmet clinical needs and constituted real therapeutic gains. Without patents new drugs are immediately open to generic competition, lowering prices, while at the same time innovators are rewarded quickly to innovate again. This approach would save countries billions in health-care costs and produce real gains in people’s health."