ideasIdea
Disclose R&D and manufacturing costs of publicly funded cancer drugs to get coverage
Taxpayers fund much of the science behind new cancer drugs but never learn what they cost to develop. Disclosure should be a condition of public payment.
The WHA 2019 transparency resolution called for disclosure of R&D costs and public funding, but implementation has been minimal. Many oncology drugs originate in publicly funded research (NIH, CRUK, national academic centres). The proposal is that public payers require, as a condition of coverage for any oncology drug that received public research funding or tax credits, audited disclosure of clinical development costs, manufacturing cost of goods and public contributions, published in a standard format and used as one input to price negotiations.
Hypothesis
Disclosure requirements are followed by lower launch price growth for disclosed products relative to non-disclosed products in the same markets and by public support for reinvestment conditions on publicly funded discoveries.
Rationale
Negotiation over price without knowledge of cost is negotiation in the dark; audited cost disclosure is routine for public procurement in defence and infrastructure, and public funding creates a legitimate claim to it.
What would test it
Adopt the requirement in one country for oncology products launched over three years; assess compliance, disclosed figures and price trajectories against other countries.
Maturity
speculative
Who has to act
policy
Cost to try
Small (under $1M)
Years to first evidence
4
Bottlenecks it attacks
- Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.
- Incentives reward me-too drugs and marginal gains · The system pays the same for a drug that adds two months as for a cure, so companies race to copy rather than to cure.