The pandemic of coronavirus disease 2019 (COVID-19) has brought to light the various funding mechanisms accessible in the biological sciences for researching, development, manufacture, and commercialization. Scientific research, funded by governmental and charitable funds, was followed by incentives for the development, funded by pharmaceutical industry earnings, in the traditional process innovation.
As per Benjamin Gordon Palm Beach, regulatory and philanthropy grants support roughly one-third of total life sciences investment (estimated total investment of $194.2 billion in 2018), with the rest coming from the sector.
Before the outbreak of the COVID-19 pandemic, medical costs in the United States were always a topic of scrutiny due to the financial strain they put on governmental and non – governmental budgets. Congress and the Trump administration presented a drug pricing law that was significantly more stringent than prior proposals, but it was still far less severe than regulations in other elevated countries.
During the early phases of the pandemic, condemnation of the pharmaceutical sector did not surface, but it is again. President Biden’s healthcare legislative agenda includes allowing Medicare to renegotiate pricing with medication producers, linking US prices to prices in other high-income nations, and prohibiting post-launch price hikes.
Benjamin Gordon Palm Beach on Funding From the Public and Private Sectors
The broad contours of funding for COVID-19 diagnostics and therapies are beginning to emerge. Government entities have financed a considerable portion, if not the bulk, of global investments, with the US government contributing the most.
These efforts go well beyond scientific and medical research. Through Mission Warp Speed and the Biomedical Advanced Research and Development Authority, the US federal government invested $11 billion in late-stage vaccine development and manufacturing capacity in 2020.
Therapeutics is another area where the government is investing heavily. The two most well-known monoclonal antibodies (developed by Regeneron and Lilly) have received significant government funding for commercialization. Both drugs are the result of medicinal research platforms that were built with government funding before the COVID-19 pandemic. However, in 2020, product commercialization and production will receive significantly more funding.
A Reconsideration of Pricing
The COVID-19 epidemic is compelling the healthcare system to try new things, including using drug pricing as a source of finance for innovation. As the pandemic ends, some of the new programs will fade away. The observed alterations, on the other hand, indicate longer-term patterns that are expected to continue. The pricing that can be paid and the income made in these categories do not meet the pharmaceutical industry’s capital partners’ return on investment standards.
During the pandemic, there was also a significant shift in the financing of product commercialization. Government bodies and philanthropic organizations are pledging huge sums to support research and delayed product development, production capability growth, and effective distribution systems.
Previously, the pharmaceutical sector was primarily responsible for funding these operations. The policy concerns whether the shift toward public funding and away from private funding will be maintained when the COVID-19 pandemic has passed or whether life science spending will return to its previous level. Given the scope and significance of medication development and marketing, this has far-reaching consequences for medicine and health care in the long term.