SOMO: Overpriced drugs developed with tax money

SOMO        

Photo: MaxPixel.freegreatpicture.com_.jpg
Share Menu
Share this

News / May 10, 2019
Overpriced drugs developed with tax money
Research shows major Dutch public investment in drug development

Overpriced, a report published today jointly by SOMO and Wemos examines the extent of Dutch public funding of drug development, through donations, loans and/or investments. This funding occurs both directly by financing development of new medicines, and indirectly through investments made into biotech companies, but channelled through universities, public research bodies, and national and regional investment funds. The report reveals, however, that because no conditions are set on these investments, the Government loses its chance to curb subsequent high drug prices. Recent research in United Kingdom and Spain has uncovered a similar pattern of public funding and drug development. In Overpriced, SOMO and Wemos argue the need for European legislation to ensure affordable medicines and a public return on public investment.

    Publication / May 9, 2019
    Overpriced
    Drugs Developed with Dutch Public Funding

    Esther de Haan (Senior Researcher, SOMO): ’Pharmaceutical companies argue that the reason their drugs are so expensive is because research and development is expensive, but this is simply not true. Much of the cost of research and development is borne by unconditional public investment. Because of this, the Government loses its chance to influence drug pricing’.

For this report, SOMO, in collaboration with Wemos, investigated the level of direct and indirect public investment into drug research and development. The compelling evidence comes from desk research, interviews with experts. and detailed examination of case studies.
Video / May 9, 2019
How public money goes into drug development
Public money invested in medicine research and development

In addition to funding fundamental research conducted by universities, national and regional governments also invest heavily in start-upand spin-off biotech companies (companies founded by researchers wanting to commercially develop promising scientific findings). This public capital is often invested in these businesses and companies at their initial development phase when the risk of failure is high. Large private investors usually begin investing later on in the company’s ‘life-cycle’ when the medicine looks more promising and the risk to investors is therefore lower. These private investors then make a huge profit by selling their shares at a high price to other companies in? the pharmaceutical industry.

    Ella Weggen (Global Health Advocate, Wemos): “In effect, the public pays twice for medicines; once via their health insurance premiums and then again through their taxes. This happens even though the evidence demonstrates that there is insufficient public return on these investments to justify the practice?. Moreover, as this report shows, some medicines developed with taxpayers’ money are sold on the market at exorbitantly high prices, undermining the principle of equal access to medicines and, therefore, threatening public health.’

No transparency and criteria for investment

Because information on public contribution to drug development via investment funds is not publicly available, it is difficult to ascertain the level of these investments. In addition, no criteria are set for such financing, because investors believe that this would have a negative effect impact on their investment return.

    Ella Weggen: “There can only be great tension between one government policy that promotes economic growth, and another that aims to keep medicines (and therefore healthcare) affordable. To ensure that public health always remains the priority, action is not only needed in The Netherlands, but also at European level. We recommend that the EU introduces laws to ensure that all public investment into drug development are transparent and insists that conditions are attached to any public funding of biomedical research and development, so that people can benefit from, and afford?, medicines developed with their money.”

Contact
Esther de Haan
00 31 (0) 20 639 12 91
e.de.haan@somo.nl
Partners

    Wemos

Related topics

    Pharmaceutical industry

Related companies

    Acerta Pharma Kiadis Pharma N.V. MSD/ Merck & Co Novartis International AG

Sign up
Stay up-to-date with SOMOs Newsletter

related content
Publication / May 9, 2019
Overpriced
Drugs Developed with Dutch Public Funding
Download
Sign up
Stay up-to-date with SOMOs Newsletter

Video / May 9, 2019
How public money goes into drug development
News / May 8, 2019
Affordable medication leaves biggest Dutch insurers cold
Statement / June 19, 2018
Common call to improve access to medicine

In the run-up to the general debate on Medicines policy on Thursday June 21st 2018, eight organizations in the Netherlands jointly sent a letter to the Dutch Parliament to inform them abouth their position concerning…
Statement / December 7, 2017
Organisations call for greater social impact of the European Commission’s medical research and innovation investments

Together with 22 civil society organisations, SOMO calls on the European Commission to seize the opportunity during the preparation of  the 9th Framework Programme The 9th Framework Programme is the follow up of the Horizon…
News / April 3, 2017
Roche intimidates clinical drug trial participant following report
Result / March 22, 2017
EMA must report its activities on protecting clinical trial participants
Result / December 4, 2016
Dialogue and questions in response to report on clinical trials in Egypt
News / June 21, 2016
Egyptian patients targeted in clinical drugs trials from which they do not benefit
Publication / June 21, 2016
Industry-sponsored clinical drug trials in Egypt
Ethical questions in a challenging context
Download
SOMO Logo
Come and visit us
Centre for Research on Multinational Corporations (SOMO)
Sarphatistraat 30
1018 GL, Amsterdam
Nederland
view on google maps
Contact us
Tel: +31 (0)20 639 12 91 (9 AM - 5 PM)
info@somo.nl
Visit our twitter page Visit our facebook page Visit our linkedin page Visit our youtube page
Practical details

Bank name: Triodos
Account number: NL 56 TRIO 0198 4077 77
BIC / SWIFT code: TRIONL2U
VAT number: NL 002 954 631 B01
Chamber of Commerce registration: 412 233 08

    Disclaimer Privacy statement

ANBI Logo ISO Logo