Perspectives from Law, Economics and Political Economy
Edited by Meir Perez Pugatch
Chapter 7: Encouraging Cooperation Among the Academic, Government and Private Sectors in US Biomedical R & D
7. Encouraging cooperation among the academic, government and private sectors in US biomedical R&D Richard P. Rozek and Bridget A. Dickensheets* I. INTRODUCTION Engaging in biomedical research and development (R&D) is risky since it requires substantial investments in both spending and time (over $800 million and 12 to 15 years to develop a pharmaceutical product) with no guarantee of a successful outcome. Many R&D projects fail to yield safe and eﬀective products. Further, the social returns from the investments in biomedical R&D often exceed the private returns.1 As a result, the market system alone cannot solve the problem of allocating the optimal amount of resources to biomedical R&D. To address the market failure, an R&D infrastructure has evolved that combines the academic, government and private sectors in the search for solutions to health care problems that aﬀect people throughout the world. Each sector contributes to the biomedical R&D process. The government provides the legal framework for encouraging R&D. In the US, the federal government, primarily through the National Institutes of Health (NIH), also conducts basic and applied R&D and provides funds to academic institutions and private companies to carry out biomedical R&D projects. Scientists at academic institutions conduct R&D without regard to immediate commercial potential and train students to meet future manpower needs in the scientiﬁc community. Companies in the private sector pursue a broad range of R&D projects; identify commercially promising technologies; conduct large-scale...
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