With industry developing fewer and fewer new drugs, the Obama administration has decided to start a government-run research center that would explore new remedies for diseases.

 

As part of the National Institutes of Health, the new National Center for Advancing Translational Sciences would seek to do as much research as necessary to attract drug company investment. Big Pharma has been spending less money on research and development of new medicines because of the years it takes to develop a new product, only to find in some cases that it can’t be marketed for health reasons or for reasons of limited profits. Washington hopes that by absorbing some of the R&D costs, manufacturers will be more willing to get involved in drug development.

 

Pharmaceutical companies claim that the average cost of bringing a single drug to market is $800 million and can exceed $1 billion. However, these estimates are based on a single study by the industry-funded Tufts Center for the Study of Drug Development. In a recent study, Donald Light and Rebecca Warburton discovered that the figures used in the Tufts study were grossly exaggerated and included such expenses as an assumption that a typical drug company would have earned 11% had it invested the money rather than spent it on developing a new drug. The real average cost is closer to $200 million.

 

Getting funding for the new center could prove difficult, given budget constraints and the desire of House Republicans to slash federal spending. The administration hopes to bargain with GOP lawmakers by offering to downsize the NIH’s National Center for Research Resources and giving some of its functions to the new drug center.

 

In addition, some critics worry that the research center could lead to taxpayers paying for research that brings profits to pharmaceutical companies that could have paid for the development themselves.

-Noel Brinkerhoff, David Wallechinsky

 

Federal Research Center Will Help Develop Medicines (by Gardiner Harris, New York Times)

FAQ: Proposed National Center for Advancing Translational Sciences (National Institutes of Health)

Demythologizing the High Costs of Pharmaceutical Research (by Donald W. Light and Rebecca Warburton, Biosocieties) (pdf)