In a press release issued on July 17, 2023, the Information Technology and Innovation Foundation, the top think tank for science and technology policy, stated that drug price controls in non-OECD countries that are not the United States. Reduce biopharmaceutical research and development by more than $56 billion annually, depriving the world of 25 new medicines each year.
“It is ironic that many countries are willing to sacrifice economic welfare by paying higher energy prices to address climate change," Stephen Ezell, director of the Center for Life Sciences Innovation, said. "Yet, when it comes to addressing another urgent global challenge—curing diseases—they are happy to free ride on the investments of others.”
According to a new study by the Information Technology and Innovation Foundation, the premier think tank for science and technology policy, drug price controls in non-U.S. OECD countries cut biopharmaceutical research and development by more than $56 billion annually, depriving the world of 25 new drugs each year. Pharmaceutical revenues would increase by $254 billion (in 2018) if countries paid their fair share rather than free-riding on the United States, of which $56.4 billion would have been invested in R&D, according to ITIF's analysis of prescription drug prices in 32 OECD countries where data was available. The world would profit from 12 new pharmaceuticals per year, according to an ITIF research, if just five wealthy countries—Japan, Italy, Germany, France, and the UK—lifted restrictions to put pricing in line with those in the United States.
The study of pharmaceutical pricing controls in OECD nations reveals that, after accounting for GDP per capita, 30 of the 32 OECD nations had prescription drug costs that were lower than those in the United States. Without adding the United States, the regulations in 32 OECD nations decreased manufacturing sales income in 2018 by 77 percent, or $254 billion. Pharmaceutical income and R&D spending are almost inversely connected, meaning that when revenues fall, so do spending levels. Pharmaceutical R&D spending might have expanded by an additional $23.9 billion, producing at least 11 new medications yearly, if industrialized nations permitted drug prices to rise to just 75% of American levels.
According to the research, there are two possible directions to go. Countries that have price limitations may stop paying more and "join the club," which would result in even fewer new pharmaceuticals being produced. Instead, the United States and other countries that have traditionally contributed to the cause might begin to "name and shame" the governments that are taking a backseat and put pressure on them to start prioritizing global health. ITIF contends that the United States must make it plain to countries in the global "North" and "South" that it is playing an excessively large role in fostering pharmaceutical innovation. This should be done through the U.S. State Department, U.S. Trade Representative, and other officials, according to ITIF. It's time for other wealthy nations to contribute their fair part as well because doing so will improve global health.
