Value of pharmaceuticals: ensuring the future of research and development.

OBJECTIVE: To analyze the current situation under which the pharmaceutical industry is criticized for the production of drugs with potential adverse effects, the high prices of medicines, and aggressive marketing practices, and to provide a proposal to rectify the situation.

DATA SOURCES: Published books, pharmaceutical journals, Web of Science database using the search terms pharmaceutical, research, development, marketing, cost, and the Food and Drug Administration (FDA) Web site.

SUMMARY: Most breakthroughs in the treatment of diseases and prolongation of lives have come about through pharmaceuticals discovered and developed by the pharmaceutical industry. While the process of discovering and developing new pharmaceuticals is lengthy, costly, and lacking any assurance of success, investment in research and development by the U.S. pharmaceutical industry has increased progressively, reaching 51.3 billion dollars in 2005. Yet the annual number of FDA approvals of new molecular entities (NMEs) has gradually decreased over the past 10 years. Additionally, a large part of the patent life of a successful NME is consumed during this lengthy development phase. Few businesses, if any, have such long product gestation lives and risks. For these reasons, the pharmaceutical industry is often in a rush to recoup its investment before the product's patent expires, and this is the root cause of many criticisms against the pharmaceutical industry. To rectify the current situation, a new system is proposed under which innovator pharmaceutical companies would be allowed royalties for their products after the expiration of patents, in a manner similar to the way in which other intellectual properties (such as books, music, films) are protected by copyright. Such a system would allow pharmaceutical companies to continue research on new pharmaceutical products unimpeded by the patent clock.

CONCLUSION: Given appropriate legislative or other facilitatory actions, a royalty-based system for the marketing of generic products after the expiration of initial patents has the potential to promote innovation, provide for more thorough clinical studies, reduce prices, and share know-how. In addition, some of the issues related to the so-called aggressive pharmaceutical marketing practices would be resolved.