Researchers have identified ongoing problems in the U.S. health system where investment in drug development is often guided by market potential rather than medical necessity. This issue is highlighted in a new report from the National Academies of Sciences, Engineering, and Medicine. The report was co-authored by Stanford Law School Professor Lisa Larrimore Ouellette and included input from Stanford Health Policy Professor Joshua Salomon.
The report, titled “Aligning Investments in Therapeutic Development with Therapeutic Need: Closing the Gap,” states that drug development frequently prioritizes commercially promising areas over conditions that cause significant suffering and death, such as heart disease and mental illness. This misalignment can deepen health disparities and result in missed opportunities for lifesaving treatments.
Ouellette, who is also a Senior Fellow at the Stanford Institute for Economic Policy Research, contributed her expertise on how patent law, federal research funding, and regulatory frameworks influence incentives for drug development and pricing. She has discussed these topics further in a recent essay for Stanford Lawyer magazine.
“Despite billions in public and private funding, therapeutic development in the United States remains poorly aligned with the country’s most pressing health needs,” says Ouellette. “As the report shows, the data we rely on to assess disease burden and track therapeutic development are often fragmented, insufficient, and inaccessible. That makes it hard to set evidence-based priorities. That is just one of the challenges we worked to address in a highly interdisciplinary way.”
The committee behind the report found two main reasons for underinvestment in certain diseases: scientific challenges—such as limited understanding of some diseases or difficulty measuring outcomes—and market forces that limit profit potential for rare diseases or those requiring short treatment courses.
The report recommends developing strategies to better align drug development investments with unmet healthcare needs to help lower societal costs and improve overall health outcomes.
“As the U.S. confronts widening health disparities and prepares for new scientific frontiers such as cell and gene therapies, the case for realignment is only growing stronger,” according to the researchers.
This article was first published by Stanford Law School.
