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Epilogue: New Drugs for Neglected Diseases

Published online by Cambridge University Press:  25 March 2011

THOMAS POGGE  and
AIDAN HOLLIS
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Extract

In a widely cited 2003 article, DiMasi, Hansen, and Grabowski estimated the cost of pharmaceutical research and development to be $1.1 billion (year 2000 U.S. dollars) per new medicine coming onto the market in 2001. They also estimate that this cost is going up at a real (inflation-adjusted) rate of 7.4% annually. According to these estimates, the innovation cost per new medicine today is about $2.1 billion (year 2000 U.S. dollars) or $2.65 billion (year 2010 U.S. dollars).

Type
Symposium on Global Bioethics
Information
Cambridge Quarterly of Healthcare Ethics , Volume 20 , Issue 2 , April 2011 , pp. 329 - 334
Copyright
Copyright © Cambridge University Press 2011

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References

1. DiMasi, JA, Hansen, RW, Grabowski, HG.The price of innovation: New estimates of drug development costs. Journal of Health Economics 2003;22:51–185.CrossRefGoogle Scholar

2. See note 1, DiMasi et al. 2003:181. The article explains why the cost is so high. One factor is risk: successful drug launches must bear the cost of unsuccessful efforts. Another factor is discounting: companies must pay for the work long before they reap any rewards. The authors report that companies value their capital at a real discount rate of 11% per annum. This means, for example, that a reward of $1000 in 2010 justifies an investment of $513 in 2003. Taking inflation into account, a reward in 2010 of $1000 (year 2010 U.S. dollars) justifies an investment in 2003 of only $433 (year 2003 U.S. dollars).

3. See note 1, DiMasi et al. 2003:181.

4. UNITAID was established by the United Nations to scale up access to drugs for HIV/AIDS, malaria, and tuberculosis in an effort to reach the Millennium Development Goals.

5. GlaxoSmithKline. Creating a pool of intellectual property to fight neglected tropical diseases, 2009; available at http://www.gsk.com/collaborations/patentpool.htm (last accessed 31 Jul 2010).

6. Hollis, A, Pogge, T.The Health Impact Fund: Making New Medicines Accessible for All. Oslo and New Haven, CT: Incentives for Global Health; 2008. Also available at www.healthimpactfund.org (last accessed 25 Jul 2010).Google Scholar

7. Pogge, T.World Poverty and Human Rights: Cosmopolitan Responsibilities and Reforms, 2nd edition. Cambridge, UK, Polity Press; 2008:202–221.Google Scholar

8. See Wikipedia for a good discussion, available at http://en.wikipedia.org/wiki/Financial_transaction_tax (last accessed on 25 Jul 2010).

9. For a detailed discussion, see Flynn, S, Hollis, A, Palmedo, M.An economic justification for open access to essential medicine patents in developing countries. Journal of Law, Medicine & Ethics 2009;37:184–209.CrossRefGoogle ScholarPubMed

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12. Schroeder, D, Singer, P.Access to life-saving medicines and intellectual property rights: An ethical assessment. Cambridge Quarterly of Healthcare Ethics, this issue, 279–289.Google Scholar

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14. Beetson, J.Collaborating with the pharmaceutical industry: An Aboriginal perspective. Cambridge Quarterly of Healthcare Ethics, this issue, 326–328.Google Scholar