[Ip-health] A Solution to Corruption and Inefficiency in Drug T rials

[Dean Baker]

Michael,

Actually there is no reason to assume that this plan for publicly funded
research would lead to lower profit rates. It would allow for lower drug
prices, but half of the industry's research costs would be eliminated.
So, it is easy to imagine scenarios in which profit rates on money
invested in R&D would be unchanged or even increased.

Also, it is not clear that this effort would require very much
bureaucracy. You would need a new or existing agency that would award
the contracts and carry through oversight, but that need not be
especially large.

Dean Baker

proclus@gnu-darwin.org wrote:
> --
> On 11 Mar, Liz Chimienti wrote:
>
>> In order to ensure full disclosure of the results of these trials, the f=
ederal contracts for testers would require that all results be available to=
 the public and posted on the internet. Public access to this data should e=
liminate needless duplication in the drug development process and also faci=
litate comparative assessments of like drugs.
>>
>> The report goes on to demonstrate how this new system could save state a=
nd local governments in excess of $120 billion dollars over the course of 1=
0 years. If comparable price reductions are applied to the private sector a=
s well, the savings would total over $900 billion.
>>
>> Other potential benefits include:
>>
>> -    Publicly funded trials may be conducted at a lower cost than indust=
ry-sponsored trials since there would be no incentive for independent contr=
actors to overpay participating physicians as a way to encourage them to pr=
escribe the company's drugs.
>>
>> -    Research could advance more quickly since all results from publicly=
 funded trials would be immediately and fully disclosed, thus allowing othe=
r researchers to benefit from this information.
>>
>> -    Lower drug prices would substantially reduce the waste associated w=
ith efforts by insurers and other third-party payers to restrict the use of=
 high-priced drugs.
>>
>
> There is possibly a good argument against handing pharmaceutical
> research over to a government agency.  Part of the incentive to develop
> new drugs is removed, an argument that would certainly be made by the
> pharma lobbies.
>
> I agree that the public interest demands that pharmaceutical research
> be done in the public eye.  An alternative to the CEPR proposal would be
> to simply mandate that all pharmaceutical research be done in the realm
> of public knowledge, which would accomplish the same goals without
> creating a new bureaucracy.  The patent system would continue assure
> profitability to the distributors of the new drugs, while public access
> would assist in the development of new drugs and encourage the
> development of generics as well.
>
> I'm definitely interested in the response to this alternative proposal
> and a defense of the CEPR proposal in light of this one.
>
> Regards,
> Michael L. Love Ph.D
> Department of Biophysics and Biophysical Chemistry
> School of Medicine
> Johns Hopkins University
> 725 N. Wolfe Street
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> Baltimore MD 21205-2185
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>
>
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--

Dean Baker (baker@cepr.net)
Co-Director
Center for Economic and Policy Research
1611 Connecticut Ave., NW
Washington, DC 20009
202-293-5380 (ext 114)
202-332-5218 (H)
www.cepr.net