Who is actually paying for the development of new medicines?
The public sector, in other words, , we citizens, are a major contributor to research and development of new drugs. Numerous grants, subsidies and tax credits are offered to manufacturers making up nearly half of the total R&D expenditure. According to The Lancet, 30% of the estimated $240 billion yearly total global investment across all health R&D comes from the public sector. On top of that, an additional 10% comes from other sources including philanthropic contributions.
The share of public funding is even greater in early-stage research where risks of failure are high. It is estimated that more than four-fifths of all funds for basic research to discover new drugs and vaccines come from public sources. Although tax-payers are contributing to a big part to the research and development of new drugs, through tax credits, direct public funding to R&D and other incentives, we still have to pay often unaffordable prices for their medicines. We actually pay for our drugs twice or even three times over (when co-payment & other forms of out-of-pocket expenditure are added).
The substantial contribution of public funds to medical R&D needs to be acknowledged and public return must be guaranteed. To this end, affordability and transparency conditions should be attached to public funding, so that medicines can be accessed at affordable prices, guaranteeing a dividend for the public.