Pharmaceutical Accountability Foundation

Solution #1: Better Innovation Models

Better innovation models: Solution overview

Innovation need not always be incentivised by potential profit. Alternative innovation models have been proposed that would take further the idea that medical research should serve primarily health needs.

See below for details on the following relates solutions:

  • Product development partnerships
  • Advanced market commitments
  • Direct support
  • Delinkage
  • Prize funds

Issues addressed

Medicines development is currently incentivised by profit. Because of this incentive structure, products that are important for public health but unlikely to be profitable are often not developed.  This means that some places of acute need are underserved, if the market they provide is not sufficiently profitable to motivate companies to develop medicines.

Learn more about these issues here.

Product Development Partnerships

Product development partnerships (PDPs) are a type of public/private partnership designed to address unmet medical needs by combining for- and non-profit models. A notable examples of a PDP is the Drugs for Neglected Diseases initiative (DNDi), which in 15 years managed to develop 8 new treatments for five different neglected diseases through a network of public and private research institutions.

Another is GAVI (formerly, the Global Alliance for Vaccines and Immunization), which brings private sector vaccine developers together with donors, development experts and health systems experts to improve availability of and access to vaccines. GAVI is currently part of the international response to the Covid-19 pandemic. PDP’s can also be a way to reduce the cost of research, and to make use of unused innovation that sits within different organisations.

Examples of PDPs

  • DNDi
  • GAVI Alliance
  • Medicines for Malaria Venture
  • GARDP

Related Cases

  • Case study on XXYY
  • Case study on YYZZ
  • Legal action on AABB
  • Legal action on BBCC

Impact

  • XX diseases without proper medicine
  • XX patients waiting for better treatment options

Further Resources

  • External Link 1
  • External Link 2
  • External Link 3

Advanced Market Commitments

Advanced market commitments (AMCs) are a promise to purchase a certain amount of a product if it is created. This effectively creates a market where there might not have previously been one. Perhaps the most widely recognized example of an AMC was the initiative to increase access to pneumococcal vaccines in developing countries. This model is currently being replicated with the COVAX facility that is working to develop Covid-19 products.

Examples of AMCs

  • Example 1
  • Example 2
  • Example 3

Related Cases

  • Case study on XXYY
  • Case study on YYZZ
  • Legal action on AABB
  • Legal action on BBCC

Impact

  • XX diseases without proper medicine
  • XX patients waiting for better treatment options

Further Resources

  • External Link 1
  • External Link 2
  • External Link 3

Direct Support

Public financing today already supports significant amounts of base research, though it is often not linked to provisions that ensure public benefit from that research.   For example, a recent study found that every one of the 210 products approved by the Food and Drug Administration between 2010-2016 had benefitted from research conducted by the publicly financed National Institutes of Health.

Governments could decide to directly support research through the product development phase, either through grants or other forms of financing. Tax credits for the development of particular products. Direct financing currently occurs through public research institutions such as the National Institutes of Health and the Biomedical Advanced Research and Development Authority (BARDA). Tax credits can also be a form of direct support from governments, for example tax credits offered to companies in the US who develop medicines for “orphan” diseases [diseases with a very small patient population, insufficient to incentivise research under normal circumstances].

 

Related Cases

  • Case study on XXYY
  • Case study on YYZZ
  • Legal action on AABB
  • Legal action on BBCC

Impact

  • XX diseases without proper medicine
  • XX patients waiting for better treatment options

Further Resources

  • External Link 1
  • External Link 2
  • External Link 3

Delinkage

“Delinkage” is the general concept that the cost of research and development should be unrelated to the eventual price of a potential medical product. How much it costs to develop a medicine is a matter of some disagreement, with pharmaceutical companies often claiming it costs $2.6 billion while non-profit drug development entity the Drugs for Neglected Diseases initiative has said it paid a fraction of that [$65-205 million] for a new chemical entity. But in any case, the high cost of research is the oft-cited reason for the high cost of medicines. The profit motive is also why there is systematic under-investment in medicines for which no significant market exists.

Delinkage proposes to separate incentives for medical development from profits, allowing for a more public-health focused agenda. There are many ways to delink the price of a product from the cost of its development, including prize funds, direct financing and tax credits.

Related Cases

  • Case study on XXYY
  • Case study on YYZZ
  • Legal action on AABB
  • Legal action on BBCC

Impact

  • XX diseases without proper medicine
  • XX patients waiting for better treatment options

Further Resources

  • External Link 1
  • External Link 2
  • External Link 3

Prize Funds

Prize funds offer prizes (generally a large sum of money) in lieu of monopoly as a financial reward for companies that are able to create products meeting a pre-defined set of specifications. Often intermediary prizes are offered for making a critical step forward towards meeting those specifications, or for sharing technology that might help others meet them.

“Grand challenge” funds are a sub-type of prize fund where a financial reward is offered for solving a clearly defined problem (where a novel solution is required but not yet defined), such as “preventing deaths during childbirth.”

Examples of prize funds include InnoCentive, which crowdsources solutions to pre-defined challenges and the X Prize Foundation, which runs competitions to find the best solution to solve a challenge such as how to build private spaceships or better clean up oil spills.

Related Cases

  • Case study on XXYY
  • Case study on YYZZ
  • Legal action on AABB
  • Legal action on BBCC

Impact

  • XX diseases without proper medicine
  • XX patients waiting for better treatment options

Further Resources

  • External Link 1
  • External Link 2
  • External Link 3