Commentary Advocates Government-Funded Pharmaceutical Research

The federal government should abandon patent-supported prescription drug research, which is "no longer affordable" given "soaring drug prices," in favor of increasing public funding for research, Dean Baker, co-director of the Center for Economic and Policy Research, writes in an opinion piece in the Los Angeles Times. Baker proposes increasing federal spending on research to make up for the $5 billion to $28 billion pharmaceutical firms spend annually for research under the current system. While drug makers' research spending currently accounts for about half of annual drug research spending nationwide, "much of the industry research is wasted" on developing medications that provide treatment similar to existing drugs without infringing on existing patent protections, Baker writes. Under Baker's proposal, researchers at universities, private foundations, the NIH or drug companies would receive contracts for their work, with the results being made publicly available so pharmaceutical companies could produce any drugs they choose, similar to the current system for generic drugs. Baker writes that the government could recover most costs through lower prescription drug costs for Medicaid and other government programs, and by 2013, the private sector could save $200 billion a year in prescription drug spending. Baker maintains "drugs are cheap to produce" but some sell for "hundreds or even thousands of dollars a year" because the government grants patents for new drugs that create monopolies, allowing pharmaceutical companies to "charge as much as they want for lifesaving drugs." He continues, "Without patent protection, most prescription drugs would sell for less than a quarter of their price, and in many cases much less." By eliminating the patent-supported drug research, the system would be fueled by competition, he writes. "Competition can produce enormous benefits for society," Baker writes, concluding, "We need more of it in the pharmaceutical industry" (Baker, Los Angeles Times, 3/4).