A new report by The Centre for Research on Multinational Corporations (SOMO) and Wemos in the Netherlands shows that, in part, the research and development of expensive drugs is funded through taxpayer contributions.
The report’s authors argue that drug prices could be lower, bearing in mind that the R&D costs are not always borne entirely by the pharmaceutical companies. SOMO researcher Esther de Haan said:
“Pharmaceutical companies argue that the reason their drugs are so expensive is because research and development is expensive, but this is simply not true. Much of the cost of research and development is borne by unconditional public investment. Because of this, the government loses its chance to influence drug pricing.”
The report discusses case studies of expensive drugs for which research was carried out at universities with public grant funding, and then go on to claim a high price in health services worldwide.
Cautionary MAP Insights
It is important to understand that most national governments contribute in some way to medical research including the research and development of medicines, diagnostics and devices; therefore any single country may find it difficult to quantify to what extent that have exclusively supported a single technology’s development. However, individual countries already have sophisticated pricing and reimbursement mechanisms in place, so it could be argued that country contributions are already fully accounted for.
Read the full report here.