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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Page viii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Page xiii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. The Role of NIH in Drug Development Innovation and Its Impact on Patient Access: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25591.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

The Role of NIH in Drug Development Innovation and Its Impact on Patient Access PROCEEDINGS OF A WORKSHOP Francis K. Amankwah, Alexandra Andrada, Sharyl J. Nass, and Theresa Wizemann, Rapporteurs Board on Health Care Services Board on Health Sciences Policy Health and Medicine Division PREPUBLICATION COPY: UNCORRECTED PROOFS i

THE NATIONAL ACADEMIES PRESS 500 Fifth Street, NW Washington, DC 20001 This activity was supported by Arnold Ventures (formerly the Laura and John Arnold Foundation). Any opinions, findings, conclusions, or recommendations expressed in this publication do not necessarily reflect the views of any organization or agency that provided support for the project. International Standard Book Number-13: 978-0-309-XXXXX-X International Standard Book Number-10: 0-309-XXXXX-X Digital Object Identifier: https://doi.org/10.17226/25591 Additional copies of this publication are available from the National Academies Press, 500 Fifth Street, NW, Keck 360, Washington, DC 20001; (800) 624-6242 or (202) 334-3313; http://www.nap.edu. Copyright 2019 by the National Academy of Sciences. All rights reserved. Printed in the United States of America Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2019. The role of NIH in drug development innovation and its impact on patient access: Proceedings of a workshop. Washington, DC: The National Academies Press. https://doi.org/10.17226/25591. PREPUBLICATION COPY: UNCORRECTED PROOFS ii

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, nongovernmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.nationalacademies.org. PREPUBLICATION COPY: UNCORRECTED PROOFS iii

Consensus Study Reports published by the National Academies of Sciences, Engineering, and Medicine document the evidence-based consensus on the study’s statement of task by an authoring committee of experts. Reports typically include findings, conclusions, and recommendations based on information gathered by the committee and the committee’s deliberations. Each report has been subjected to a rigorous and independent peer-review process and it represents the position of the National Academies on the statement of task. Proceedings published by the National Academies of Sciences, Engineering, and Medicine chronicle the presentations and discussions at a workshop, symposium, or other event convened by the National Academies. The statements and opinions contained in proceedings are those of the participants and are not endorsed by other participants, the planning committee, or the National Academies. For information about other products and activities of the National Academies, please visit www.nationalacademies.org/about/whatwedo. PREPUBLICATION COPY: UNCORRECTED PROOFS iv

WORKSHOP PLANNING COMMITTEE1 JEFF BINGAMAN (Chair), Former U.S. Senator, New Mexico AMITABH CHANDRA, Ethel Zimmerman Wiener Professor of Public Policy, Harvard Kennedy School of Government; Henry and Allison McCance Professor of Business Administration, Harvard Business School PATRICIA DANZON, Celia Moh Professor Emerita, Wharton School, University of Pennsylvania STEVEN GALSON, Senior Vice President, Global Regulatory Affairs and Safety, Amgen STEPHEN MERRILL, Senior Research Fellow and Former Executive Director, Duke Law Center for Innovation Policy JENNIFER MOORE, Executive Director, Institute for Medicaid Innovation; Research Professor, University of Michigan Medical School JOHN NIEDERHUBER, Former Director, National Cancer Institute; Executive Vice President, Inova Health System; Chief Executive Officer, Inova Translational Medicine Institute AMEET SARPATWARI, Instructor in Medicine, Harvard Medical School; Assistant Director, Program on Regulation, Therapeutics, and Law, Brigham and Women’s Hospital NEERAJ SOOD, Vice Dean for Research, Price School for Public Policy and Director of Research, Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California REED TUCKSON, Managing Director, Tuckson Health Connections, LLC; Former Executive Vice President and Chief of Medical Affairs, UnitedHealth Group GABE TZEGHAI, Chief Executive Officer, Summit Innovation Labs, LLC Project Staff Board on Health Care Services FRANCIS K. AMANKWAH, Program Officer, ALEXANDRA ANDRADA, Associate Program Officer (from September 2019) CAROL SANDOVAL, Senior Program Assistant ANNALEE GONZALES, Administrative Assistant MICAH WINOGRAD, Financial Officer SHARYL J. NASS, Senior Board Director Board on Health Sciences Policy EESHAN KHANDEKAR, Associate Program Officer, CAROLYN SHORE, Director, Forum on Drug Discovery, Development, and Translation ANDREW M. POPE, Senior Board Director 1 The National Academies of Sciences, Engineering, and Medicine’s planning committees are solely responsible for organizing the workshop, identifying topics, and choosing speakers. The responsibility for the published Proceedings of a Workshop rests with the workshop rapporteurs and the institution. PREPUBLICATION COPY: UNCORRECTED PROOFS v

PREPUBLICATION COPY: UNCORRECTED PROOFS vi

Reviewers This Proceedings of a Workshop was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies of Sciences, Engineering, and Medicine in making each published proceedings as sound as possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the charge. The review comments and draft manuscript remain confidential to protect the integrity of the process. We thank the following individuals for their review of this proceedings: ROBERT COOK-DEEGAN, Arizona State University FRED LEDLEY, Bentley University LANA SKIRBOLL, Sanofi BARI TALENTE, National Multiple Sclerosis Society Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the content of the proceedings, nor did they see the final draft before its release. The review of this proceedings was overseen by BRUCE CALONGE, The Colorado Trust. He was responsible for making certain that an independent examination of this proceedings was carried out in accordance with standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the rapporteurs and the National Academies. PREPUBLICATION COPY: UNCORRECTED PROOFS vii

PREPUBLICATION COPY: UNCORRECTED PROOFS viii

Acknowledgments We are grateful to the chair and members of the planning committee for the Workshop on the Role of NIH in Drug Development Innovation and Its Impact on Patient Access, who collaborated to ensure a workshop with informative presentations and rich discussions. We also thank the speakers and moderators, who generously shared their expertise and time to make the workshop a success. We are also grateful for the support of Arnold Ventures (formerly the Laura and John Arnold Foundation), without which we could not have undertaken this project. PREPUBLICATION COPY: UNCORRECTED PROOFS ix

PREPUBLICATION COPY: UNCORRECTED PROOFS x

Contents ACRONYMS AND ABBREVIATIONS xv PROCEEDINGS OF A WORKSHOP 1 OVERVIEW OF THE WORKSHOP 1 THE TRANSLATIONAL RESEARCH LANDSCAPE 5 Bridging the Valley of Death, 5 Eroom’s Law, 6 Translational Science: Increasing Efficiency, Decreasing Failure, 9 NCATS Rare Disease Research Programs, 11 Models for Drug Discovery, 12 Moving Forward, 12 FEDERAL BIOMEDICAL RESEARCH FUNDING AND NEW DRUG DEVELOPMENT 13 Perspectives on the Federal Role in Advancing Drug Development Innovation, 13 Accounting for Public Funding in Drug Pricing, 15 Direct and Indirect Effects of Public-Sector Funding on Drug Development, 16 Gauging the Returns on Federally Funded Basic Research, 18 Quantifying the Impact of Targeted, Disease-Specific NIH Extramural Funding, 19 Improving Data Resources, 20 Reforming the Patent System, 21 IMPACT OF PATENT AND TECHNOLOGY TRANSFER POLICIES ON NIH-FUNDED INNOVATION 22 Patent-Eligible Subject Matter in Biomedical Research, 23 Technology Transfer at U.S. Academic Institutions, 24 March-In Rights, 25 Stakeholder Feedback on the Technology Transfer Process, 26 Interpreting the Bayh-Dole Act, 28 Standardizing the Licensing Process, 29 THE ECONOMICS OF DRUG PRICING 29 Pricing and Reimbursement of Pharmaceuticals in the United States, 30 Consumer Perspective on Prescription Drug Price Trends, 33 Providing Access and Value for Low-Income Persons with Complex Medical Needs, 35 Financing Antibacterial Drug Discovery and Development, 36 STRATEGIES AND POLICIES TO FACILITATE TRANSLATION 40 Reducing Risks and Costs and Improving Returns in Drug Development, 40 Meeting U.S. Department of Defense Medical Support Needs, 41 C-Path: Collaborating to Accelerate Medical Product Development, 42 Repurposing Compounds for New Therapeutic Uses, 43 Infrastructure for Drug Development Innovation, 43 Partnering for Translational Research Success, 44 Additional Strategies to Facilitate Translation, 46 POTENTIAL POLICIES TO ENSURE AFFORDABLE ACCESS 46 Pricing of Taxpayer-Funded Drugs, 46 Improving System Performance and Supporting Emerging Innovative Companies, 49 REFERENCES 53 APPENDIX A: STATEMENT OF TASK 57 APPENDIX B: WORKSHOP AGENDA 59 PREPUBLICATION COPY: UNCORRECTED PROOFS xi

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Boxes and Figures BOXES 1 Observations and Suggestions Made by Individual Workshop Participants, 2 2 Definitions, 9 3 Case Examples of the Patenting of Federally Funded Drugs, 22 4 Some Findings from the NIST Report Return on Investment Initiative for Unleashing American Innovation, 27 5 Reimbursement Prototypes Outside the United States, 31 FIGURES 1 Drug discovery, development, and deployment maps (4DM) for small molecules and biologics, 7 2 Overall trend in R&D efficiency (inflation-adjusted), 8 3 Costs increase as translation proceeds (using small molecule drugs as an example), 9 4 U.S. post-launch price growth for branded versus generic drugs, 2008–2016, 32 5 The antibiotic tripod, 39 PREPUBLICATION COPY: UNCORRECTED PROOFS xiii

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Acronyms and Abbreviations BARDA Biomedical Advanced Research and Development Authority CAP cross-agency priority CMS Centers for Medicare & Medicaid Services CRADA cooperative research and development agreement CTSA Clinical and Translational Science Awards DoD U.S. Department of Defense EHR electronic health record ERP external reference pricing FDA U.S. Food and Drug Administration HCV hepatitis C virus HHS U.S. Department of Health and Human Services ICER incremental cost-effectiveness ratio IND investigational new drug application iPSC induced pluripotent stem cell IRB Institutional Review Board MeSH Medline Subject Headings NCATS National Center for Advancing Translational Sciences NIAID National Institute of Allergy and Infectious Diseases NIH National Institutes of Health NIST National Institute of Standards and Technology (U.S. Department of Commerce) PBM pharmacy benefit manager PI principal investigator PrEP pre-exposure prophylaxis QALY quality-adjusted life year R&D research and development ROI return on investment SBIR Small Business Innovation Research program STTR Small Business Technology Transfer program UAEM Universities Allied for Essential Medicine USPTO U.S. Patent and Trademark Office WHO World Health Organization PREPUBLICATION COPY: UNCORRECTED PROOFS xv

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To explore the role of the National Institutes of Health (NIH) in innovative drug development and its impact on patient access, the Board on Health Care Services and the Board on Health Sciences Policy of the National Academies jointly hosted a public workshop on July 24–25, 2019, in Washington, DC. Workshop speakers and participants discussed the ways in which federal investments in biomedical research are translated into innovative therapies and considered approaches to ensure that the public has affordable access to the resulting new drugs. This publication summarizes the presentations and discussions from the workshop.

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