UNITAID Report On Delinking R&D Costs From Medicines Prices

Delinkage of research and development costs from medicines prices could “vastly expand” access to medicines by drastically dropping costs of the knowledge component of health products, innovative medicines R&D facility UNITAID says in a new report.

The report, entitled: “An economic perspective on delinking the cost of R&D from the price of medicines,” [pdf] was published on 26 February. The report summary from UNITAID is available here.

“The report, which touches on IP issues, asks how best to separate the costs of research and development for vaccines, medicines and diagnostics from their prices – a concept known as “delinkage,” according to a UNITAID source.

“The study focuses on how to finance research in pharmaceuticals, while respecting intellectual property rights of companies, without burdening consumers with unnecessary costs,” UNITAID said in the report summary. “The authors use economic models to compare the financial implications of delinkage with the current market situation; where medicines tend to be sold by patent-holders at prices higher than competitive generic prices.”

“The paper presents models of the likely economic effects of delinkage in a range of hypothetical scenarios: in a single country, in multiple countries, and in markets with incomes segmented within countries, among others,” it said. “It concludes that delinkage can vastly expand access to medicines as the costs of the knowledge component of health products falls to zero.

According to UNITAID, “the authors argue that under delinkage, governments can better:

• Optimize allocation of R&D funding between direct funding and providing incentives for development
• Better fund and reward upstream R&D
• Eliminate the waste of resources associated with marketing of patented medicines”

The full UNITAID report is available here [pdf]. The report was written by public health expert James Love with support from UNITAID, the report states.

UNITAID was established in 2006 by Brazil, Chile, France, Norway and the United Kingdom to “provide an innovative approach to global health.” Its mission is “finding new ways to prevent, treat and diagnose HIV/AIDS, tuberculosis and malaria more quickly, more cheaply and more effectively.”