[Economics] The Global Pharmaceutical Industry Isn’t Investing in Products for the Greatest Burden of Human Disease - Are Non-Profits a Solution?

[GL HERO SHIMA]

Programs for expedited review may be preferentially reducing the development costs for conditions with lesser disease burden, potentially making investments in addressing the most significant disease burdens even less appealing and exacerbating the market failure further.

he World Health Organization (WHO) estimates that 1.7 billion people around the world are in need of measures to prevent or treat neglected tropical diseases (NTDs), conditions that collectively account for as many as 200,000 deaths/year and a burden of disease running in the hundreds of billions of dollars per year. This vast unmet medical need reflects the global pharmaceutical industry’s focus on developing products for US markets, where efficient channels for product sales and few limits on drug pricing provide companies with the opportunity for robust returns on investment and profit. US markets, however, account for less than 4% of the global burden of disease. The greatest disease burden is associated with conditions prevalent in low- and middle-income countries, where the available market is typically inadequate to justify the investment cost; a classic instance of market failure.

From 1975-1997, less than 1% of new drug approvals in the USA and EU were indicated for tropical communicable diseases. A decade later, from 2000-2011, only 1% of new drug approvals (New Chemical Entities) were indicated for NTDs, and only 1% of all clinical trials involved products that might address this unmet medical need. A new report in the British Medical Journal Open (BMJ Open) from the Center for Integration Science and Industry at Bentley University demonstrates that this trend continued through the decade before COVID (2010-2019) with only 1.8% of the new drugs indicated for tropical diseases. The BMJ Open study further demonstrates that, while half of the new product approvals were for conditions in the top quartile of US disease burden, there was no association between the number of product approvals and conditions contributing the most to the global disease burden.

https://www.ineteconomics.org/perspectives/blog/the-global-pharmaceutical-industry-isnt-investing-in-products-for-the-greatest-burden-of-human-disease-are-non-profits-a-solution