What if the cost of clinical studies was covered by reduced payments for drugs under Medicare Part D and other government programs? And what if the approach could save $120 billion over ten years? Would it be worth considering? That, of course, depends upon how such a gambit is structured. Ina paper, Dean Baker of the Center for Economic Policy and Research offers some ideas that, he argues, will ultimately lead to improved public health.
To accomplish this goal, private firms would be contracted to run trials, which could be recovered by paying lower prices for drugs purchased through Medicare, which negotiate prices. "Removing the conflict of interest inherent in the current system of clinical trials and bringing drug prices closer to marginal costs would eliminate much of the inefficiency of the current system," Baker writes.
He argues that publicly funded trials would eliminate the incentive and the opportunity to conceal evidence that a drug may have harmful side effects or to exaggerate evidence of the drug’s effectiveness, and could lead to lower costs because it would eliminate the incentive to carry duplicative drugs through the trial process in the hope of recovering sunk research costs.
Baker also maintains "publicly funded trials may be conducted at a lower cost...since there would be no incentive for independent contractors to overpay participating docs as a way to encourage them to prescribe a company’s drugs," and that research could advance more quickly since all trial results would be immediately and fully disclosed allowing other researchers to benefit from the info. He also argues such trials would eliminate data exclusivity which, he says, raises prices in many developing countries, and that lower prices would eliminate the incentive for most industry marketing.
You can read the full report here.