The Economics of Contraceptives R&D

Science  28 Jun 1996:
Vol. 272, Issue 5270, pp. 1857c-1861c
DOI: 10.1126/science.272.5270.1857c

A recent report by an Institute of Medicine (IOM) committee on contraceptive research and development (R&D) (Robert F. Service, News & Comment, 31 May, p. 1258) clearly defines the global unmet need for contraception. It decries the withdrawal of the pharmaceutical industry from the contraceptive field and considers it important “to show drug companies the massive need and potential market for new contraceptives.” That massive need may well exist, but not the potential market. Of the eight largest pharmaceutical companies in the world, not one is active in contraceptive R&D; not one seems to sell contraceptive drugs or devices. The pharmaceutical market, which has changed dramatically during the past decade, has spoken. It now focuses on blockbuster drugs dealing with diseases of aging or deterioration in the increasingly geriatric populations of affluent Japan, North America, and Europe, not the needs of the poor pediatric societies of Latin America, Asia, and Africa.

An item in the same issue (Random Samples, 31 May, p. 1269) features the ominous trends for infectious diseases, listing the four biggest global killers: acute respiratory infections, diarrheal diseases, tuberculosis, and malaria. If we again consider the minute fraction of the huge R&D budgets of the top eight pharmaceutical companies dedicated to these fields, we see that unmet burning societal needs do not necessarily equal financial returns.

The most important point missed by the IOM committee is that the features of a truly novel contraceptive (say, a contraceptive vaccine or a once-a-month anti-implantation or menses-inducer pill) associated with major societal advantages (for example, low cost and long duration for a vaccine; short action and minimal pill consumption involving 13 pills per year for a menses-inducer versus 250 or more pills per year for current oral contraceptives) are precisely the economic disincentives keeping companies, which search for billion-dollar drugs used daily, from reentering the contraceptive field. The proposal “that commitments [by international aid agencies] to buy large volumes of contraceptives would induce companies to develop low-cost products” is a pipe dream. The only reason why some of the current oral contraceptive manufacturers will sell monthly pill regimens at 20 cents a package in lots of multimillion units to the Agency for International Development is the fact that an affluent American woman buying the same product in a drugstore pays more than 100 times that price. Absent that latter market, a pharmaceutical company would go broke if it focused on the low-cost public-sector market for a new contraceptive. More realistic, though politically unpopular, incentives for industrial involvement have been suggested earlier (1).


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