More than 20 drugs produced by Pfizer, Eli Lilly and AstraZeneca that failed to treat the diseases they were originally designed for will be tested against other illnesses in a new, $20m programme.
US-sponsored scientists will conduct the tests which, if found effective, will reduce the time to market to treat the disease. Pharmaceutical companies will retain ownership of the compounds, but profits will be shared with the researchers.
The programme has been initiated by the National Institutes of Health (NIH) and has received $575m of funding in US President Barack Obama's 2013 budget.
While announcing the agreements, NIH director Francis Collins cited HIV treatment AZT as a particular success story, as the drug was originally designed to treat cancer, but failed.
"We need to generate more of these success stories in a more systematic manner," added Collins.
Compounds released for the tests by Pfizer, Eli Lilly and AstraZeneca have already been found safe in humans and the pharmaceutical companies will give scientists access to chemicals and related data in order to aid the research.
The drug makers could also be forced to provide costs for the maintenance of patents and gathering and transmitting clinical data to scientists, but this is set to be considerably smaller than the traditional cost of developing new therapies.
The $2bn cost associated with bringing new therapies to market has made pharmaceutical companies cautious about deciding which illnesses to target, with rare diseases often overlooked by companies looking to turn therapies into big profits.