ECONOMIC CRISIS AND ACCESS TO ESSENTIAL MEDICINES:
AWARDING PRIZES FOR DRUG INNOVATION AS A WAY OF ENDING WASTEFUL MONOPOLIES THAT PREVENT AFFORDABLE MEDICINES
“The current system is incredibly wasteful and constantly gamed by Big Pharma. The prize fund approach would radically reform the market for innovation, in the same way the Internet has radically changed the way we use telecommunications. The supply of useful innovation would be a highly competitive activity, rather than one that is crippled by irrational incentives, corrupt marketing practices and unproductive rent-seeking activities.” James Love, Knowledge Ecology International and TransAtlantic Consumer Dialogue
1. One size medical patents do not fit all social needs. Patent monopolies could be effective incentives in some areas of invention but they are very inefficient in rewarding innovation in many important fields of medical research and development. They do not stimulate investment in basic science or pre-commercial research, nor for neglected tropical diseases that tend to affect countries of the South, nor for research on the potential harmful effects of an existing drug.
2. High prices mean bitter medicine for poor. Monopolies often lead to very high prices, specially when no comparable substitute is available. This is particularly the case with regards to severe illnesses such as cancer or AIDs. The extremely high cost of medicines has a dramatic impact on the world´s poor, on patients everywhere and on the economic viability of public health systems.
3. Investing in more of the same does not meet social needs nor public health priorities. Linking large private investment in medical research and development with the price of new drugs encourages the marketing of expensive “me too” or “copy-cat” products that do very little more than existing treatments. These products are prescribed by doctors who do not pay for them and generally the price of similar drugs are driven up. In the end the marked increase in price of many new medicines often bears little relation with a substantial improved therapeutic outcome for patients. We should be paying for improved treatments and not for improved marketing campaigns of “copy-cat” products.
4. Reward medical R and D success with money instead of monopoly. The core of a Prize Innovation Scheme is to reward a significant biomedical R and D success with money from a prize fund instead of granting a legal monopoly over the eventual product. The awarding of these prizes would be rigorously based on empirical scientific evidence that proves significantly improved health results of the new drug as compared with existing treatments. These prizes, obviously, would not be oriented toward most medicines but especially toward those drugs used for treating the most severe and widespread illnesses. An innovation prize system would allow the most advanced products to be marketed at low generic medicine prices from day one meaning massive savings for health-care systems and relief for state debt that supplies public services. This could have a positive ripple effect by generally lowering the price of medicines by promoting generic competition.
5. “Openness” and sharing that fuels innovation needs to be promoted. The promotion of the sharing of medical knowledge should also be rewarded by innovation prizes. If important medical technology research on the development of a new drug is done transparently, this “open-source dividend” should be compensated economically by the proposed prize scheme.
6. De-linking the cost of medical R and D from the price of medicines is the solution. “De-linkage” of investments in research from prices is supported by both the World Health Organization and the European Union and affects the management of patent monopolies on products. De-linkage or “disassociation” (as put forth by the EU Council) is considered worldwide as a key new strategy for providing affordable medicine to the world´s population, ending wasteful investments, orienting R and D toward real health needs and confronting neglected diseases.
7. Public investment in medical R and D for public interest and affordable medicines. Existing large public investment in medical R and D does not revert back into affordable products for citizens because EU and government R and D funding is oriented to private intellectual property monopolies. If a portion of this taxpayer money was set aside for innovation prizes and the public management of patent rights over essential medicines this would result in lower prices and greater competition across the board.
8. Financing of alternative medical innovation can come from many private and public sources. The money for the Innovation Prize Fund could come from many sources, both public and private. The first pilot programmes should have strong support from the EU budget, particularly the Framework for Research. Then funding should be diversified with funding from state and private health insurances, foundations, and eventually a new tax on pharmaceutical profits, luxury goods or financial transactions.
David Hammerstein, TACD