Federal R&D, Drug Discovery, and Pricing: Insights from the NIH-University-Industry Relationship [June 10, 2011]   [open pdf - 323KB]

From the Summary: "Public interest in approaches that might provide prescription drugs at lower cost, particularly for the elderly, has rekindled discussion over the role the federal government plays in facilitating the creation of new pharmaceuticals for the marketplace. In the current debate, some argue that the government's financial, scientific, and/or clinical support of health-related research and development (R&D) entitles the public to commensurate considerations in the prices charged for any resulting drugs. Others view government intervention in price decisions based upon initial federal funding as contrary to a long-term trend of government promotion of innovation, technological advancement, and the commercialization of technology by the business community leading to new products and processes for the marketplace. […] The particular nature and expense of health-related R&D have focused attention on the manner in which the National Institutes of Health (NIH) undertakes research activities. Critics maintain that any need for technology development incentives in the pharmaceutical and/or biotechnology sectors is mitigated by industry access to government-supported work at no cost, monopoly power through patent protection, and additional regulatory and tax advantages such as those conveyed through the Hatch-Waxman Act, the Biologics Price Competition and Innovation Act, and the Orphan Drug Act. Supporters of the existing approach argue that these incentives are precisely what are required and have given rise to robust pharmaceutical and biotechnology industries. It remains to be seen whether or not decisions related to federal involvement in issues related to pharmaceutical R&D will change the nature of the current approach to governmentindustry- university cooperation."

Report Number:
CRS Report for Congress, RL32324
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