Unitaid study looks at delinking cost of R&D from price of medicines

UNITAID has published a report that asks how best to separate the costs of research and development for vaccines, medicines and diagnostics from their prices – a concept known as “delinkage”.

The study focuses on how to finance research in pharmaceuticals, while respecting intellectual property rights of companies, without burdening consumers with unnecessary costs. The authors use economic models to compare the financial implications of delinkage with the current market situation; where medicines tend to be sold by patent-holders at prices higher than competitive generic prices.

Delinkage is both technical and a demand for the R&D system to be reformed to accommodate universal access to knowledge.

The paper presents models of the likely economic effects of delinkage in a range of hypothetical scenarios: in a single country, in multiple countries, and in markets with incomes segmented within countries, among others. It concludes that delinkage can vastly expand access to medicines as the costs of the knowledge component of health products falls to zero.

The authors argue that under delinkage, governments can better:

• Optimize allocation of R&D funding between direct funding and providing incentives for development
• Better fund and reward upstream R&D
• Eliminate the waste of resources associated with marketing of patented medicines

Read the report: “Discussion paper: An economic perspective on delinking the cost of R&D from the price of medicines.” UNITAID. February 2016. [PDF, 250 KB]