In the current issue of Health Affairs :

February 2015; Volume 34, Issue 2 Biomedical Innovation
http://content.healthaffairs.org/content/34/2.toc

Outterson, K., J. H. Powers, G. W. Daniel and M. B. McClellan (2015). “Repairing The Broken Market For Antibiotic Innovation.” Health Affairs 34(2): 277-285. http://content.healthaffairs.org/content/34/2/277.abstract

“…Good public health practices curb inappropriate antibiotic use, making return on investment challenging in payment systems based on sales volume. We assess the impact of recent initiatives to improve antibiotic innovation, reflecting experience with all sixty-seven new molecular entity antibiotics approved by the Food and Drug Administration since 1980. Our analysis incorporates data and insights derived from several multistakeholder initiatives under way involving governments and the private sector on both sides of the Atlantic. We propose three specific reforms that could revitalize innovations that protect public health, while promoting long-term sustainability: increased incentives for antibiotic research and development, surveillance, and stewardship; greater targeting of incentives to high-priority public health needs, including reimbursement that is delinked from volume of drug use; and enhanced global collaboration, including a global treaty.”

Berndt, E. R., D. Nass, M. Kleinrock and M. Aitken (2015). “Decline In Economic Returns From New Drugs Raises Questions About Sustaining Innovations.” Health Affairs 34(2): 245-252. http://content.healthaffairs.org/content/34/2/245.abstract

An analysis of “…the economic returns for four cohorts of new prescription drugs launched in the United States (in 1991–94, 1995–99, 2000–04, and 2005–09) and compared fluctuations in revenues with changing average research and development (R&D) and other costs to determine patterns in rewards for pharmaceutical innovation. We found that the average present values of lifetime net economic returns were positive and reached a peak with the 1995–99 and 2000–04 new drug cohorts. However, returns have fallen sharply since then, with those for the 2005–09 cohort being very slightly negative and, on average, failing to recoup research and development and other costs. If this level of diminished returns persists, we believe that the rewards for innovation will not be sufficient for pharmaceutical manufacturers to maintain the historical rates of investments needed to sustain biomedical innovation.”

Kesselheim, A. S., Y. T. Tan and J. Avorn (2015). “The Roles Of Academia, Rare Diseases, And Repurposing In The Development Of The Most Transformative Drugs.” Health Affairs 34(2): 286-293. http://content.healthaffairs.org/content/34/2/286.abstract

“Transformative drugs, [are] pharmaceuticals that are both innovative and have groundbreaking effects on patient care, are the “holy grail” of drug research and development”
A study of “the developmental histories of twenty-six drugs or drug classes approved by the Food and Drug Administration between 1984 and 2009 that were judged by expert physicians to be transformative (in two cases, the first drug in a transformative class was approved before 1984). Most of the twenty-six were first approved early in the study period; only four were approved in 2000 or later. Many were based on discoveries made by academic researchers who were supported by federal government funding. Others were jointly developed in both publicly funded and commercial institutions; the fewest number of drugs had originated solely within pharmaceutical industry research programs. Nine of the twenty-six (35 percent) were repurposed from products developed for other indications, and ten (38 percent) were developed for rare diseases before much broader applicability was found.”