Medicine for Tomorrow: Some Alternative Proposals to Promote Socially Beneficial Research and Development in Pharmaceuticals
Abstract
The current models of pharmaceutical drug discovery display significant inefficiencies. One inefficiency is the widespread prevalence of me-too drugs. Second, some patents can act as barriers to knowledge, by slowing down the pace of new discoveries. Third, there are higher costs for the public, who end up paying double costs — subsidizing or funding research and development (R & D) that leads to new discoveries on the one hand, and, on the other, paying the social costs of restricted access to knowledge when the discoveries are privatized. Fourth, when the market returns are the sole guide to R & D of new drugs, diseases that are prevalent in markets with weaker buying power are neglected. Thus, policymakers need to identify a new, more cost-effective and innovative productive system for R & D. Policymakers are faced with very complex choices in designing their regulations. They want to promote access to medicines, to lower costs and to encourage research. Politically, they have to balance pressure from the industry with increasingly forceful demands from health advocacy groups. The article looks at four different sorts of policies that may be used to address some of the inadequacies in the current system, especially with regard to the management of R & D: promoting prizes over patents; directing innovation toward socially beneficial outputs by adopting some form of value-based pricing; publicly funding clinical trials to reduce conflicts of interest while reducing costs; and actively managing frontier technologies to maximize positive social spillovers.
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References and Notes
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33. Needless to say, there are other issues that we have not addressed here, which are also important in promoting global health outcomes, notably remedying some of the excesses of the TRIPS agreement and bilateral trade agreements.
Biographies
Is a professor at Columbia University, the winner of the 2001 Nobel Memorial Prize in Economics, and a lead author of the 1995 IPCC report, which shared the 2007 Nobel Peace Prize. He was chairman of the US Council of Economic Advisors under President Clinton, and chief economist and senior vice president of the World Bank for 1997–2000. He received the John Bates Clark Medal, awarded biennially to the American economist under 40 who has made the most significant contribution to the subject. He is a member of the National Academy of Sciences and a corresponding Fellow of the British Academy and the Royal Society.
Is an assistant professor of Economics at the University of Massachusetts Boston. He has been a research fellow at the Committee on Global Thought at Columbia University and is currently a fellow at the Roosevelt Institute. Among his interests is the development of an effective and fair global intellectual property regime. He has published in specialist economics journals such as the Journal of Development Economics and Economics Letters, as well as in policy-oriented journals such as Health Affairs.
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Article first published online: July 1, 2010
Issue published: July 2010
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This article was published in Journal of Generic Medicines: The Business Journal for the Generic Medicines Sector.
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