NCPA - National Center for Policy Analysis

Most Drugs Developed by Drug Makers, Not Academic Scientists

November 4, 2003

Proponents of allowing prescription drug reimportation often suggest price controls could be "imported" through prescription drug legislation without affecting drug industry research and development. To support this, they use the argument that much of basic pharmaceutical research is actually conducted by academic institutions with government-sponsored funding through the U.S. National Institutes of Health, says Sidney Taurel, president, chairman, and chief executive officer of Eli Lilly.

However, closer examination of drug research funding shows most is performed by the pharmaceutical companies themselves. Ninety-three percent of the 284 drugs approved in the 1990s originated with the pharmaceutical industry. By contrast, government involvement was small.

  • Government, academic and the nonprofit center originated only 7 percent of drugs approved in the 1990s.
  • Of drugs with sales exceeding $500 million in 1991, the NIH was involved in research on 47.
  • Of those, the NIH contributed to the discovery or development of only four.

Some assume that public and private scientists are competitors in basic research. In reality, they pursue very different objectives. Academic research generally is not focused on drug discovery. Rather these scientists make ground breaking observations about biology. These generate ideas and hypotheses about the biochemistry of a disease - which may offer a new target for drug discovery. This process generally takes many years and costs, on average, about $800 million dollars per drug, says Taurel.

Source: Sidney Taurel, "Hands Off My Industry," Wall Street Journal, November 3, 2003.

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