Box 1. Public research and products

Several lines of evidence support the commercial nature of the uses to which publicly funded research is put by for-profit entities. What empirical research exists largely stands for the proposition that the majority of drugs identified by government health agencies, public interest groups and, importantly, firms themselves as "the most medically and commercially significant" in the years since the second world war were developed using substantial public resources⁶⁸. This research also demonstrates that public research is responsible for the riskiest and most costly research, with firm entry largely after identification of a marketable target.

For example, a Massachusetts Institute of Technology (Cambridge) study⁶⁹ of the 21 most important drugs introduced from 1965–1992 demonstrated that public funds were used to discover and develop 14 of the 21 compounds, and an investigation by the Boston Globe⁷⁰ demonstrated that public research funds were involved in 45 of the 50 best-selling drugs in the United States from 1992–1997. Similarly, a prominent NIH study⁶⁸ revealed that public research was responsible for development of the five best-selling drugs of 1995 with sales in excess of $1 billion per year. Eighty-five percent of the research on the compounds was done at public institutions, and publicly funded researchers contributed to product development by discovering basic phenomena and concepts, developing new techniques and assays, and participating in clinical applications of the drugs. Finally, a study by the Center for Study of Responsive Law⁶⁴ demonstrated that the US government funded clinical trials and other research for 34 of the 37 cancer drugs approved for marketing in the United States from 1955–1992, and that half of all FDA 'priority drugs' approved for marketing between 1987–1991 benefited from significant federal funding.

Although data from these and other^{43, 64, 71, 72, 73} reports cannot be used to make quantitative statements about what fraction of the resulting products were funded by the public purse, they do illustrate that a significant proportion of the funds and risk necessary to underwrite strong firm innovation and product development are derived using public resources. Consequently, there appears little question that publicly funded research remains a substantial, if not major, source of risk-intensive innovative biomedical products, notwithstanding shifting patterns in public and private research funding⁷⁴.