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Analysis Achieving Fair Pricing of Medicines

New business models for research and development with affordability requirements are needed to achieve fair pricing of medicines

BMJ 2020; 368 doi: https://doi.org/10.1136/bmj.l4408 (Published 13 January 2020) Cite this as: BMJ 2020;368:l4408

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  1. Fatima Suleman, professor12,
  2. Marcus Low, postgraduate student2,
  3. Suerie Moon, director of research3,
  4. Steven G Morgan, professor4
  1. 1Prince Claus Chair of Development and Equity, Affordable (Bio) Therapeutics for Public Health, Utrecht University, Netherlands
  2. 2Discipline of Pharmaceutical Sciences, School of Health Sciences, University of KwaZulu-Natal, Durban, South Africa
  3. 3Global Health Centre, Graduate Institute of International and Development Studies, Geneva, Switzerland
  4. 4School of Population in Public Health, University of British Columbia, Vancouver, Canada
  1. Correspondence to F Suleman sulemanf{at}ukzn.ac.za

For research and development to systematically deliver fairly priced medicines, new approaches to financing and organisation are needed, and affordability must be integrated into push, pull, and pooling mechanisms, say Fatima Suleman and colleagues

The health of populations depends, in part, on the development and appropriate use of new drugs, diagnostics, vaccines, and other biological medicines (broadly referred to as medicines).1 Realising the social value of pharmaceutical innovation, however, is difficult. Policies must promote investment in research and development in areas of significant unmet health need while also ensuring access to resulting innovations.2

Pharmaceutical R&D relies heavily on the monopoly pricing enabled by patents or other forms of market exclusivity. This threatens the goals of innovation and access and can result in “unfair” prices.2 A fair price for medicines is one that is affordable for health systems and patients while providing sufficient market incentive for industry to invest.3

Concerns about the high and rising prices of new medicines4 have prompted increased interest in the possibility that changing the way in which R&D is financed and organised might result in fairer prices for innovative medicines. In particular, “delinkage,” where the financing of R&D is decoupled from the price of medicines by removing market exclusivity as a driving incentive, has attracted growing attention as an alternative business model for pharmaceutical R&D. This idea was recently endorsed in the political declaration of the United Nations high level meeting on tuberculosis.5

The range of policy tools that can facilitate fair pricing falls into three broad categories: (1) “push” mechanisms, which typically provide grants for research projects in advance; (2) “pull” mechanisms, which provide rewards for research accomplishments at various stages of the drug development process; and (3) “pooling” mechanisms, which facilitate access to knowledge to advance scientific progress, …

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