Taxpayers foot the bill for medical research, but companies profit. We're paying for drugs twice [View all]

Pharmaceutical companies often reap the rewards of public spending. In fact, in the U.S, every new drug approved by the FDA between 2010 and 2019 has relied on grants from the NIH. Meanwhile, the companies sometimes turn around and charge the public exorbitant prices for the same drugs their tax dollars helped create.

Part of the problem is an outdated licensing system that allows private companies to buy exclusive rights to use publicly funded research, with few strings attached. Many of these issues stem from the way intellectual property, or IP, is licensed in the U.S. and some other wealthy countries. Making changes to the way we fund research and license drugs could help treat millions of people, particularly in developing nations.

Typically, when a scientist conducts research at an institution, the IP — meaning any novel innovations they produce, such as a new drug — belongs to the institution, rather than the scientist who did the work or the funder who paid for it. This arrangement is in large part thanks to the 1980 Bayh-Dole Act, which allows universities to patent inventions even when taxpayers funded the research. After the research is done, the institution can sell the IP to a corporation through a technology transfer agreement, and the company can bring it to market. After that point, as owners of the IP, companies have the freedom to set prices and make other key sales decisions.

This model has been championed as a way to encourage innovation, but those private companies are obliged to deliver the maximum return to shareholders rather than to ensure the greatest possible reduction in human suffering.

https://www.zmescience.com/science/taxpayers-foot-the-bill-for-medical-research-but-companies-profit-were-paying-for-drugs-twice-and-this-needs-to-change-now/