European pharmaceutical companies ahead of US in drug discovery
11 September 2009
A new analysis of 20 years of data contradicts previously published
claims that United States pharmaceutical companies are better innovators
than their European counterparts, and questions whether Americans
actually benefit from the higher prices they pay for many prescription
The re-analysis by Dr Donald W Light, a professor of social medicine
and comparative health systems at the UMDNJ-School of Osteopathic
medicine, appears in the current Health Affairs-web exclusive.
The study shows that, dollar for dollar, European pharmaceutical
researchers outdo their American colleagues in "innovative performance
or the introduction of first-in-class, biotech, and orphan products," a
finding that could have enormous implications for the current debate
over the cost of reforming healthcare in the United States.
"One implication is simply that American research teams need to
figure out why they are not as productive," said Light, who is also the
current Lorry Lokey Visiting Professor at Stanford University.
"Another is that robust European research and development takes place
at about half the US prices for patent-protected drugs. Without
jeopardizing domestic research or the development of new drugs, US drug
prices could be about half their current level, which would help
significantly to hold down rising healthcare costs and the amount of
out-of-pocket costs that consumers have to pay for medications."
In his re-analysis, Light examined data on new chemical entities (NCEs)
introduced between 1982 and 2003. NCEs are drugs introduced in a
majority of the world's largest markets. He compared the percentage of
the drug research funds invested by companies to the percentage of NCEs
credited to the United States, Europe and Japan to measure each area's
research productivity. For example, an area that received 33% of
research investment should be expected to produce 33% of NCEs, a ratio
of one-to-one (1.0).
He found that while the United States' share of research funding
increased dramatically between 1990 and 2000, its research productivity
remained at a relatively constant ratio of about 0.75. Over the same
period, Europe's share of research funding plummeted, but its research
productivity ratio increased from 0.99 to 1.17.
Along with this growing productivity gap, Light points out that
little evidence exists to support claims that most new drugs are of high
quality or "important" to patients. He cites the example of "me-too"
drugs, such as Nexium, Lipitor, and new cancer drugs that generate large
revenues at high prices but generally have not been clinically proven to
be superior to existing drugs. According to Light, this allows drug
companies to generate profits at the expense of patients who get little
if any benefit from the development of these drugs.
"The real innovation crisis for patients is not the decline in the
discovery of new molecules, but that the vast majority of new drugs
offer few therapeutic advantages and greater risks than already
available medications," Light said. "High prices enable companies to
spend 2.5 times more on marketing than on research and development. It's
a system that rewards better marketing over discovery, innovation and
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