"The Right Tool(s): Designing Cost-Effective Strategies for Neglected Disease Research"
Stephen Maurer, University of California at Berkeley
For the first time, there is a realistic prospect that rich nation governments and foundations will commit resources that are – just barely – adequate to fund neglected disease research. The challenge is to spend this money wisely. This paper stylizes existing proposals for how to fund research as “end-to-end” and “pay-asyou-go.” “End-to-end” models create a single reward to elicit discovery throughout the drug development pipeline. The leading end-to-end model, “AdvancedMarkets,” would use subsidies to boost the prices that LDCs pay for new drugs. AdvancedMarkets would reinvigorate incentives for private sector investment while leaving R&D decisions firmly in the private sector. The leading pay-as-you-go model, “Virtual Pharma,” would create the non-profit equivalent of private drugmakers. In this scenario, the public sector would retain control of R&D but outsource most of the work to private vendors.This paper argues that the foregoing drawbacks are generic and inescapable. Neither AdvancedMarkets nor Virtual Pharma is ever likely to be perfect. Instead, sponsors should choose whichever strategy is least imperfect. In principle, this decision is no different than the dollar-and-cents judgments that commercial businesses make every day. Cost – not ideology and sentiment – should be the determining factor.