Public vs. Private Sector R&D Investments

In 2011, National Institutes of Health (NIH)-funded discoveries contributed $69 billion to the nation’s gross domestic product (GDP) and supported seven million jobs. In 2020 alone, the US biomedical and pharmaceutical private sector generated more than $1.4 trillion in economic output. From Reece et al. (Health Affairs 2025) In addition to economic output, private-sector R&D…

Do first-in-class cancer drugs receive a pricing premium?

According to a paper by Miljković et al. (2023), the answer is ‘no‘. The authors examine oncology treatments with FDA approvals between 2015 and 2020 and identify average wholesale prices from Redbook. Drugs were classified into three categories: (i) first approval of a new mechanism of action compound, (ii) next-in-class approval regardless the tumor type,…

Quantifying the Long-Run Economic and Health Impact of Reduced Intellectual Property Protections for New Drugs

That is the title of a new working paper written by myself, any my FTI Consulting colleagues Sabiha Quddus and Suhail Thahir. The abstract is below. Some policymakers have called for weakening of intellectual property protections for vaccines and other pharmaceutical products, with the aim to reduce the price and improve access to existing medical…

Effect of pharmaceutical innovation on longevity

Using data from 2006-2018 across 26 high-income countries, Lichtenberg et al. (2022) measures the relationship between pharmaceutical innovation and longevity. Innovation is measured by “mean vintage…of the drugs used to treat each disease in each country” where vintage is defined as the year of worldwide launch. For the U.S., the authors found that: …the diseases…