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New (pharmaceutical) products are getting increasingly more expensive. As a result of this trend accessibility of pharmaceuticals decreases. However, not all innovation can be attributed to private companies. Subsequently, the role of public institutions like universities, university spin-offs, and publicly funded biotech start-ups is largely being disregarded at the price negotiations. Public funding in the form of research grants, tax incentives, utilisation of clinical infrastructure or regulatory measures make a major contribution.

Article 57 of the proposed Pharmaceutical Legislation (PL, Directive) will require market authorization applicants to publicly declare any direct financial support for R&D received from public authorities. The aim of our research (funded by EU Horizon Europe Grant Agreement Number 101095593) is to increase transparency in (pharmaceutical) R&D to mitigate the risk of market failure associated with information asymmetry by analyzing pharmaceutical R&D expenditures of bringing a new medicine to the market and which factors influence these expenditures and to identify the categories needed to capture direct or indirect public contributions to R&D, to provide a framework for standardized reporting of public contributions and to reduce ambiguity in the interpretation of “direct” and “indirect” public contributions.

The report is the first output of the project HI-PRIX (WP2, sub-deliverable 2.2).