Your current web browser is outdated. For best viewing experience, please consider upgrading to the latest version.

Donation - Other Level

Please use the quantity box to donate any amount you wish.

Contact Heather Mac Donald

Send a question or comment using the form below. This message may be routed through support staff.

Email Article

Password Reset Request


Add a topic or expert to your feed.


Follow Experts & Topics

Stay on top of our work by selecting topics and experts of interest.

On The Ground
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed

Manhattan Institute

Close Nav
Share this report on Close

The Truth About Drug Innovation: Thirty-Five Summary Case Histories on Private Sector Contributions to Pharmaceutical Science


The Truth About Drug Innovation: Thirty-Five Summary Case Histories on Private Sector Contributions to Pharmaceutical Science

Dr. Benjamin Zycher, Christopher-Paul Milne, Joseph A. DiMasi June 1, 2008
Urban PolicyCrime

The increasingly important role of prescription medicines
as both complements to and substitutes for other medical
procedures, as well as rising costs for newer and more effective
medicines, has precipitated an array of proposals for reducing
private and public spending on drugs. Some prominent observers
have questioned whether the current system of research and
development is as cost-effective as alternatives might be,
and, in particular, whether the central role of private
pharmaceutical firms in drug research and development produces
commensurate social benefits. One contention that recently
has attracted considerable attention can be summarized as
follows: most of the scientific advances that yield new
and improved medicines are the fruit of research financed
or conducted by public agencies, the National Institutes
of Health (NIH) foremost among them, rather than the pharmaceutical
companies that produce and market them.

The goal of this study is to test the accuracy of this
proposition. To do so, we compiled summary case histories
of thirty-five drugs and drug classes (a group of drugs
used to treat a given medical condition in similar ways)
identified in the scholarly literature as important and/or
that were among the most prescribed in 2007. Our conclusions
can be described as follows: the literature on the histories
of drugs makes it clear that the scientific contributions
of the private sector were crucial for the discovery and/or
development of virtually all of the thirty-five drugs and
drug classes examined in this study. Such scientific advances
can be classified as the basic science of biology and disease
processes relevant for given medical conditions; the applied
science of discovering compounds that treat particular conditions;
and the development of compounds with improved clinical
(medical) effects, of large-scale manufacturing processes,
and the like.

Three examples of advances yielded by private-sector research
are, respectively, the discoveries in basic science that
led to the development of the modern drugs used to treat
serious bacterial infections; the discoveries in applied
science yielding drugs used to treat hypertension; and the
advances in recombinant genetic science that allowed largescale
production of such drugs as Epogen (used in treatment of

More generally, among our thirty-five drugs and drug classes,
private-sector research was responsible for central advances
in basic science for seven, in applied science for thirty-four,
and in the development of drugs yielding improved clinical
performance or manufacturing processes for twenty-eight.
In short, all or almost all of the drugs and drug classes
examined in this study would not have been developed—or
their development would have been delayed significantly—in
the absence of the scientific or technical contributions
of the pharmaceutical firms.

Table S1 summarizes these findings, derived from
the thirty-five summary case histories presented in this

Scientific research efforts funded, respectively, by the
NIH and by pharmaceutical firms occupy very different—but
complementary—niches in the process of drug development.
Research conducted at government or university laboratories
(often funded by the NIH or other agencies) tends to be
concentrated in the basic science of disease biology, biochemistry,
and disease processes. A major goal of that work is the
identification of biologic targets that could prove susceptible
to future drug candidates. Basic research often yields advances
that cannot be patented and that often are made long before
the subsequent scientific and clinical work that leads to
viable new therapies.

The scientific contributions of the private sector have
been weighted heavily, though not exclusively, toward the
applied science of discovering ways to exploit the findings
of basic science. This scientific work can be characterized
as the discovery, synthesis, testing, and (often complex)
manufacturing of candidate compounds intended to exploit
biologic targets for the purpose of curing medical conditions
or mitigating their adverse effects.

In short, although basic research occurs in both the public
and private sectors, the applied science of drug development
and clinical refinement of compounds occurs almost exclusively
in the private sector. It is those efforts that ultimately
allow new scientific discoveries to be translated into new