Reengineering the Value Chain of Pharmaceutical Innovation

Award Year: 2011	Investigator: Anthony So	Budget: $335,000	Categories: Pharmaceutical Policy
Abstract: Pharmaceutical innovation has been the engine behind an industry, where U.S. companies account for nearly 40% of global pharmaceutical production. Yet R&D productivity has declined, and innovation has faltered over the past decade and a half. During that same period, the estimated cost of bringing a new drug to market has ballooned to $800 million, updated more recently to $1.3 billion. With an economic recession and a patent cliff faced by many large pharmaceutical firms, financial capital available to help reverse this trend will only be scarcer. This project analyzes the sharing of the 3Rs of pharmaceutical innovation - resources, risks and rewards - studying how these factors work (or do not work), to reengineer the value chain of pharmaceutical innovation. The specific aims of the project are to: 1) identify and investigate how best to structure collective approaches to sharing resources that may help reduce the risk of pharmaceutical R&D; 2) study approaches to sharing risks for pharmaceutical R&D across public and private sectors; and 3) develop models for sharing rewards, both to ensure sufficient incentive to bring products to market and to provide fair returns on public investment. This project seeks to identify and evaluate promising, crossover approaches among neglected tropical diseases, rare diseases, antibiotics, and other therapeutic areas of public health significance that might enhance U.S. pharmaceutical innovation.