Monday, July 18, 2005


Let me propose a scenario. Some drug company spends billions of dollars and develops a cheap, effective, and reliable vaccine for HIV. What would happen? Would the drug company then proceed to rake in the dough as everyone in the world was vaccinated (beginning with high-risk populations)? In my scenario, the drug company that creates this drug and attempts to sell it anything more than production cost (not development cost, production cost), with even a tiny sliver of profit, will be mauled in the press and popular opinion for consigning some to death for the lust of lucre. Share prices will plunge and the company will go under, selling off its patents to other drug companies to cover the debts incurred during the research to create the vaccine. Generic version will dominate the world. Let's back this scenario up a few years, to when the board of this drug company is contemplating the pursuit of such a vaccine. Unless altruism has driven out their business sense, the board will realize that the real money in HIV is in spin-offs (such as drugs to manage the disease, once contracted), and not in the cure.

So how can we counter-act this scenario? How were we able to put a privately-funded craft into space? In addition to funding current research, (which will most likely produce spin-off technology), we should create an X-prize for an HIV vaccine. Set the rules for exactly what the drug has to accomplish, and start piling up money. The drug company that first achieves the goal gets to claim the prize in exchange for surrendering its patent, thereby covering much of the research costs and perhaps (if the pot is large enough) providing a little profit, while still allowing that company to produce and sell it. We could even allow partial awards for treatments that meet part, but not all, of the criteria.

Such prizes could be applied to other things as well, such cures for various strains of malaria, in such areas were profit-taking causes (justified or not) moral outrage.


Anonymous Anonymous said...

This idea has in fact been picked up and developed by the Centre for Global Development, and features in the G8 summit declaration which commits G8 members to:

Building on the valuable G8 Global HIV/AIDS vaccine enterprise, increasing direct investment and taking forward work on market incentives, as a complement to basic research, through such mechanisms as Public Private Partnerships and Advance Purchase Commitments to encourage the development of vaccines, microbicides, and drugs for AIDS, malaria, tuberculosis and other neglected diseases.

2:04 PM  
Blogger Noumenon said...

Please sign your post next time, knowledgeable anonymous person!

8:23 AM  

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