Pharmaceutical Industry Project

This project comprises a number of individual intersecting and overlapping projects, which have as their common goal, the objective of improving the knowledge base of the pharmaceutical industry, in both a global and Australian context, with the aim of developing policy options, which seek to satisfy the sometimes competing objectives of accessibility, efficiency and industry development. Most countries seek access for all their citizens to the health benefits delivered by the latest range of innovative drugs at the minimum cost. They also generally provide an intellectual property regime and sometimes a range of other incentives, to encourage the development of the pharmaceutical and biotechnology sectors, through the discovery of new medicines and other medical devices. At the same time, pharmaceutical and biotechnology companies and other stakeholders, such as investors and the scientists themselves, require adequate financial incentives to devote the necessary resources to the task.

Various aspects of each of these themes have been addressed in this project. For instance the project has examined the following.

• International pricing regimes with particular reference to Australia. A detailed database of drug prices has been developed allowing the price of most major drugs to be tracked over time and compared internationally.
• The role of generics in reducing the overall cost of medicines, particularly in the context of the rapid increase in the number of major drugs going off patent has been examined in some depth.
• The returns to innovation for pharmaceutical companies from their drug portfolios has been considered amid apparently declining productivity of R&D investment in the pharmaceutical industry.
• The implications for business strategies and business models of the rapidly evolving structure of the industry, arising from the radical transformation in its technological basis have been considered. A particular focus of this work has been to document the increasing importance of alliance formation in the diffusion and adoption of these new technologies.

The results of much of the work undertaken to date is contained in the Centre’s Pharmaceutical Industry Working Paper Series.

The project is ongoing and the insights gained from this intensive analytical phase will be used to inform the development of policy options to help address the identified pricing, regulatory and industry development issues of the industry.

Financial support for this project has come from a diverse range of industry and government sources. Of particular importance however to the Centre’s ability to commit resources to the project has been its success in winning a major 3-year grant through the Merck Company Foundation’s Program on Pharmaceutical Industry Issues with matching funding provided by the Victorian Government. The Merck program involves an international group of centres researching the pharmaceutical industry, which meets biennially.