Dispelling myths about drug research

Abstract

The widely held belief that US firms dominate drug research discovery compared with their European counterparts is challenged in a paper published online on Aug 25 by Health Affairs. Donald Light analysed data from a 2006 study by Henry Grabowski and Richard Wang, which examined the discovery of new drugs between 1982 and 1992 and between 1993 and 2003. Grabowski and Wang concluded that US firms had outshone European companies in terms of productivity. But when Light measured research productivity by comparing the percentage of research and development funding for the USA, Europe, and Japan with the proportion of new drugs discovered by each, he found that the USA discovered far fewer drugs than its proportional share of funding. So, on a dollar-for-dollar basis, European research teams proved more productive than US ones. Furthermore, when it came to global or first-in-class new chemical entities, European research productivity was about the same as US output between 1982 and 1992 and increased by 30% between 1993 and 2003, while US research productivity dropped 26%. Light also asserts that Grabowski and Wang's study has several biases that favour US productivity. For example, if the study had not ruled out first-in-class new drugs launched in Europe or Japan but not yet available in the USA, Europe's productivity would be even higher. Light concludes that contrary to industry and official reports, the USA never overtook European drug research productivity. With the current debate over US health-care reform reaching boiling point, this analysis is timely. The US drug industry has long claimed that the high prices they place on new products are necessary to support research. But Light's results indicate that European drug prices, which are heavily negotiated and subsequently lower than US prices, are more than sufficient to cover companies' research and development costs and produce profits. The Obama administration should seriously consider price controls for new drugs to bring down the country's exorbitant health-care costs. It can do so without harming national research and innovation.