drug approved for marketing is between $140 million and $194 million (in 1990 dollars).16 Industry executives maintain that these features are compounded in HIV/AIDS drug development. The following are among the reasons cited: the ultimate market and commercial lifetime of a given drug may be limited and the research and development process is accelerated, which means that substantial resources must be invested in a compressed time frame. Pharmaceutical companies, then, are reluctant to enter into collaborations with government that they believe may hinder this already complex enterprise.

Government and industry representatives agree that although federal policies governing collaborative research were generally implemented with good intentions, these policies have sometimes led to contentious negotiations or inhibited research collaboration altogether. The single most significant obstacle cited by pharmaceutical executives is the role that government has assumed in setting prices for jointly developed products. A second major impediment is the possibility that government may assign rights to new intellectual property developed during the collaboration in ways that benefit a company's competitors or lead to uncertain licensing arrangements. Other obstacles include the federal government's operating policies for the management of clinical trials under the auspices of the AIDS Clinical Trials Group (ACTG)—a network of academic clinical research centers under the control and funding of the National Institute of Allergy and Infectious Diseases—and the burdensome, lengthy, and bureaucratic process of establishing cooperative research and development agreements.

Underlying these specific barriers there exists an environment of uncertainty and instability fueled by the periodic shifts in federal policies governing research collaborations. There is also what many observers regard as a mutual lack of trust between government and industry. Workshop participants agreed that collaborative relationships would be improved by measures that each party might adopt to become more trusting and reliable partners.

“Reasonable Pricing” Considerations

As described earlier, NIH adopted the “reasonable pricing” clause as a means of achieving a balance between its dual statutory missions to conduct and promote biomedical research and education for the benefit of public health and to foster the transfer of federal technology. It is one of several mechanisms that NIH uses to help protect the public investment in collaborative research and

16  

U.S. Congress, Office of Technology Assessment, Pharmaceutical R & D: Costs. Risks and Rewards, Report OTA-H-522 (Washington, D.C.: U.S. Government Printing Office), February 1993.



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