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© Donald Weber

Five key facts about what is wrong with medical innovation today:

1. Global spending on health research is skewed towards wealthy markets
Global spending on medical innovation has increased dramatically from US$ 30 billion in 1986 to US$ 105.9 billion today.  This may seem good news.  But a closer look shows how 90% of this money is spent on the health problems of less than 10% of the world’s population. This is commonly referred to as the 10/90 gap.   

The overwhelming majority of pharmaceutical industry profits come from wealthy countries. 87% of the world’s pharmaceutical market – the US$ 518 billion made each year from drug sales - is made in North America, the European Union and Japan.

2. Diseases that take the heaviest toll do not attract the most investment into R&D
Between 1975 and 2004, 1,556 new chemical entities were marketed globally.  Only 20 of these – a mere 1.3 per cent – were for tropical diseases and tuberculosis, which account for 12 per cent of the total disease burden. This 1% ratio has been steady over the last three decades.  In 2003, the World Health Organization noted that less than 1% of new drugs addressed diseases that primarily afflict the poor and for which new treatments would have the greatest effect on world healthcare.

Nor is the situation changing any time soon.  In 2006 the Treatment Action Group compared the world’s response to tuberculosis, to heart disease and to cancer.  Measuring the impact of each disease on the world’s health, and contrasting the number of candidate drugs in development to tackle each disease, they found that tuberculosis was causing thirty times more death and illness for each potential new drug than cancer, and six times more than cardiovascular disease.

3. Medical innovation is steered towards drugs that give commercial rewards, not the greatest therapeutic benefits
A major consequence of this is that pharmaceutical companies will have more interest in developing a drug that they know will be lucrative, even if it doesn’t improve on medications that already exist, rather than one that may represent a greater therapeutic breakthrough but for which there is no commercial market.

The consequences of this can be seen in all wealthy countries. A 2006 WHO report showed how medical R&D spending in the United States doubled between 1995 and 2002.  During the same period, the registration of new products declined, as well as the therapeutic significance of products reaching the market.  A breakdown of the 1,035 new drugs approved by the US Federal Drug Administration between 1989 and 2000 revealed that more than three quarters are classed as having no therapeutic benefit over existing products.

An assessment of the 3,000 new products approved for the French market between 1981 and 2004 concluded that 68 per cent of them brought ‘nothing new’ compared to previously available preparations.  

In Canada, a similar study published in the ‘British Medical Journal’ rated barely five per cent of all newly-patented drugs approved by the Canadian Patented Medicines Prices Review Board as ‘breakthrough’. Alarmingly, drugs classified as ‘me-too’, or having no added therapeutic benefit, were responsible for 80 per cent of the soaring rise in prescription costs witnessed in the country.  This provides a telling illustration of the waste in a system that rewards innovations that present little or no therapeutic gain.

4. Funding for medical innovation that addresses diseases of the poor remains grossly insufficient
A recent report by the Treatment Action Group estimates at US$ 800 million the annual shortfall into funding for TB R&D
Governments are not pulling their weight.  In a 2005 study, the London School of Economics showed how governments were lagging behind philanthropic organisations – such as the Bill & Melinda Gates Foundation, or even Médecins Sans Frontières – in providing financial support to product development partnerships (PDPs) that bring together public and private sectors for medical innovation.  The report estimated that an additional US$ 200 million per year was needed for PDPs. Without this funding, the eight or nine new drugs that PDPs might be expected to bring to the market in the next five years will stay where they are – in the pipeline.

5. This happens because in today’s R&D system, investments into R&D are paid for by charging higher prices for medicines
Adapted, effective and affordable medical tools for diseases that affect the poor are lacking because of one simple reason: the current way the development of health products are financed.

Today, the R&D system relies - with huge detrimental consequences - on companies recouping their R&D investments through charging high prices, and protecting that price through patent monopolies.  Not only does this mean that some drugs remain completely out of reach for many patients, it also means that diseases like TB or paediatric HIV that mostly affect the poor don’t get anywhere near the attention and investment into research as diseases that have bigger, more lucrative markets.

Change will only happen once new financing mechanisms that reward R&D – but do not rely on charging high prices – are designed, or alternative systems that reward R&D, not through the high price of medicines, but for the impact a new drug or test has on global health are promoted.

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