A Novel Perspective on Pharmaceutical R & amp;D Costs; Opportunities for Reductions

Expert Rev Pharmacoecon Outcomes Res. 2021 Oct 1. doi: 10.1080/14737167.2022.1987219. Online ahead of print.ABSTRACTINTRODUCTION: R&D costs as an element of medicines' pricing play a prominent role in the discussions regarding the affordability of medicine. This paper investigates details of R&D costs and potentials for reductions.AREAS COVERED: The manuscript focuses on the constitution of R&D costs in relation to medicines' pricing and its potential developments. The manuscript builds on a cost of opportunity approach to explore the results of potential changes in drug development and its possible economic, political, and societal impacts.EXPERT OPINION: The cost of capital is the largest cost category that could be affected by authorities. Public institutions can affect these costs by increasing public investments in R&D and reducing the amount of development time that is associated with a high capital need. In order to affect the cost of failure, it is key to understand its drivers. A government taking risk as the funder of early innovation yields an opportunity to introduce an alternative model for medicine development. Next to control pricing, it is important to adequately reward innovation in order to ensure improving quality of care, access, and affordability of systems. Innovation, high-quality care, access, and affordability require an entrepreneurial and changing positions of governments, authorities, public institutions, and the pharmaceutical indu...
Source: Expert Review of Pharmacoeconomics and Outcomes Research - Category: Health Management Authors: Source Type: research