All other R&D initiatives fail without a well-functioning market

Jose Luis Valverdea, and Eduardo Pisanib, “The Globalisation of the Pharmaceutical Industry,” Pharmaceuticals Policy and Law, Volume 18, 2016, https://www.ifpma.org/wp-content/uploads/2016/11/The-Globalisation-of-the-Pharmaceutical-Industry-Monograph.pdf#page=51

While some proposed measures have their theoretical and/or practical merits, and can complement the current privately funded R&D model, they cannot replace it. From a pragmatic point of view, charitable R&D initiatives, state-directed R&D, and/or public-private partnerships could not sufficiently finance the development of needed innovative medicines in an efficient and sustainable way as through the current capital-market based R&D model (Fig. 1). No alternative R&D models could replace the private pharmaceutical R&D model with its functioning patent system, without severely affecting the development of new life-saving medicines. The often discussed “de-linkage” of the price for a medicine and R&D costs remains academic as none of the suggested models could provide the continued supply of resources for research as the financial markets do. Especially with regard to NTDs, where market incentives are not available, the further fostering of collaboration between WHO, industry, national authorities and other stakeholders – complementing rather than replacing private-sector funded research – can be expected to continue to produce encouraging results in the future. New models should therefore be seen as complementary, as add-ons to current collaborations, rather than as radical changes to the current innovation ecosystem.