In a 30-second ad airing in Iowa, Democratic presidential candidate Andrew Yang criticizes the state of drug prices in the United States.
“As president, I’ll fight for mental health coverage and eliminate the loopholes that let drug companies charge too much,” Yang says in the ad. “They say they need high prices to fund research. The truth? Most FDA-approved drugs rely on research funded by the government. That means you paid for it.”
This claim piqued the interest of a Gazette reader, who wondered how much the government — and, by extension, taxpayers — really funds the research that the Food and Drug Administration relies on to approve most drugs.
When asked for the ad’s sourcing, the Yang campaign sent the Fact Checker a 2017 study that analyzed the National Institutes of Health contributions to drug approvals from 2010 to 2016.
The study was funded by the National Biomedical Research Foundation, a nonprofit that advocates for researchers’ ability to use animals in biomedical research. Authors of the study were researchers from Bentley University in Massachusetts.
They found that funding from the National Institutes of Health — part of the U.S. Department of Health and Human Services — “contributed to published research associated with every one of the 210 new drugs” approved by the FDA in the seven-year period.
“These results demonstrate the scale of basic research involved in bringing a novel product to market and the magnitude of public sector support for this research,” the authors wrote, adding their review found more than $100 billion in federal funding buoying FDA-approved drugs.
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The vast majority of the public dollars, more than 90 percent, went to “basic research related to the biological targets” of the drugs — not the drugs themselves.
This research typically is funded by the public sector and built upon during development research in the private sector, the study said.
So although public dollars provide a foundation, private pharmaceutical companies typically conduct preclinical and clinical research, obtain regulatory approval and commercialize new drugs, the authors wrote.
That development “is funded primarily from the profits generated by earlier products as well as by capital investments.”
The research highlighted by the Yang campaign notes it took “a more expansive picture of the public sector’s contribution” to new drugs by focusing on published research — not patents, as previous studies had.
One of those studies, from Columbia University researchers and published in 2011, found that government funding played an indirect role in almost half of drugs approved by the FDA between 1988 and 2005.
An analysis of drugs approved from 1981 to 1990, from Tufts University in 1993 that relied on new drug filings, found the pharmaceutical industry was the source of 92 percent of them.
The authors of the 2017 study cited by the Yang campaign point out that other case studies have found a public sector contribution involved in 50 to 75 percent of new drug approvals.
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One of those case studies, published in the American Journal of Therapeutics in 2010, reviewed private sector contributions to 35 drugs and concluded that “all or almost all of the drugs discussed would not have been developed — or, at best, would have been delayed significantly — in the absence of private sector scientific discoveries.”
Yang is right that publicly-funded research is behind most FDA-approved drugs — it’s behind all of them, according to the study cited by his campaign.
But the same researchers said the pharmaceutical industry — using profits from other products — plays an important role in the development of those drugs.
So did you, the taxpayer, really pay for it? Yes — but not all of it. That caveat earns Yang a B.
The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder about Iowa, or in ads that appear in our market.
Claims must be independently verifiable. We give statements grades from A to F based on accuracy and context. If you spot a claim you think needs checking, email us at firstname.lastname@example.org.
This Fact Checker was researched and written by Molly Duffy of The Gazette.