Universities and Hospitals Repurpose Generic Drugs Through Late-Stage Trials at 90% Lower Cost Than Industry
Key Insights
Research from King's College London reveals a "hidden" drug repurposing system where hospitals and universities conduct late-stage clinical trials at less than 10% of pharmaceutical industry costs.
The parallel innovation system operates outside the patent framework, using cheap generic drugs to find new therapeutic applications for conditions including blindness, breast cancer (search) prevention, and COVID-19 (search).
Lower barriers to innovation—reduced expertise requirements, lower financial risk, and minimal capital needs—enable this alternative research model to flourish once generic competition enters the market.
A parallel drug innovation system operating largely outside the pharmaceutical industry is conducting substantial numbers of late-stage clinical trials at funded costs up to 90% lower than those of major drug companies, according to new research from King's College London published in the Cambridge Law Journal.
This "hidden" research ecosystem—driven by universities and hospitals repurposing existing generic drugs—has demonstrated its potential through several notable successes: using a cancer drug to treat a leading cause of blindness, converting a breast cancer (search) treatment into a preventive therapy, and deploying an old anti-inflammatory drug against COVID-19 (search).
Dr Johnathon Liddicoat, Reader in Law at King's College London, characterized the significance of the findings: "This alternative research system offers enormous potential to help patients at a fraction of the cost, and governments around the world are starting programmes to formally recognise the research in the system. The drugs are already cheap because they are generic and the programmes will ensure patients have access."
The Three Barriers to Innovation
The research identifies three principal barriers in drug research and development: expertise, risk, and capital. For organizations developing novel drugs, these barriers remain prohibitively high. However, when repurposing generic medicines—drugs no longer protected by patent that can be manufactured and sold by multiple companies at lower cost—each barrier diminishes substantially.
Expertise requirements are reduced because repurposed drugs are already well studied and manufactured. Investigators select projects aligned with their existing expertise, and trials receive approval through established grant and ethics bodies. Financial risk is lower because no single organization's viability depends on the authorization and sales of any particular repurposed drug. Capital requirements are similarly constrained, with universities and hospitals able to execute these trials using fewer resources than industry counterparts.
Motivations Beyond the Patent System
The study also highlights how clinicians and scientists operating within this alternative system are driven by incentives distinct from those offered by the patent framework. These include helping patients recover more quickly and publishing studies that advance academic careers—motivations that align research priorities more directly with patient needs than with commercial returns.
The Lifecycle Dynamic
Early in a drug's lifecycle, pharmaceutical companies actively pursue repurposing opportunities. Recent data cited by the researchers indicates that companies obtain regulatory authorizations for an average of 32 new uses annually, permitting drugs to be marketed for additional indications alongside their original purpose.
However, once generic versions enter the market, industry interest in repurposing wanes due to competitive pressures. It is precisely at this juncture that the university-hospital system flourishes, leveraging cheap, generic versions of drugs to explore new therapeutic applications that would otherwise go uninvestigated.
The findings suggest that formally integrating this parallel system into national healthcare strategies could unlock a sustainable pipeline of affordable treatments, particularly for conditions where commercial incentives for new drug development remain insufficient.