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Should Global Health be Tailored Toward the Rich? Altruism and Efficient R&D for Neglected Diseases

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  • Jena Anupam B.

    () (Department of Health Care Policy, Harvard Medical School; and Massachusetts General Hospital; and National Bureau of Economic Research)

  • Mechoulan Stéphane

    (School of Public Administration, Dalhousie University)

  • Philipson Tomas J.

    (Irving B. Harris Graduate School of Public Policy Studies, University of Chicago; and National Bureau of Economic Research)

Abstract

We analyze the problem of incentivizing research and development (R&D) into developing world disease from an economic efficiency perspective. We view the problem as how to best promote R&D into goods with positive external effects in the sense that medicines that directly affect the health of the poor also indirectly affect the utility of the altruistic “rich.” We demonstrate why existing policy proposals – such as price concessions by manufacturers – adversely impact the poor by placing the burden of R&D only on innovators rather than all altruists in the rich world. We offer policy solutions that are based on economic efficiency and therefore rely on a broad sense of how the world values the treatment of developing world disease. We estimate that global altruism toward those with malaria is, at a minimum, valued between $835 million and $2.4 billion annually and for HIV/AIDS, between $9.1 billion and $26.6 billion annually. We argue that future policies toward neglected diseases need to better incorporate how efficient R&D meets the need of this global altruism.

Suggested Citation

  • Jena Anupam B. & Mechoulan Stéphane & Philipson Tomas J., 2013. "Should Global Health be Tailored Toward the Rich? Altruism and Efficient R&D for Neglected Diseases," Forum for Health Economics & Policy, De Gruyter, vol. 16(1), pages 1-36, March.
  • Handle: RePEc:bpj:fhecpo:v:16:y:2013:i:1:p:36:n:8
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    References listed on IDEAS

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    1. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, pages 1635-1653.
    2. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, pages 1635-1653.
    3. Anupam B. Jena & Stéphane Mechoulan & Tomas J. Philipson, 2010. "Altruism and Innovation in Health Care," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 497-518.
    4. Brigitte Granville & Eshref Trushin, 2010. "Two-stage public-private partnership proposal for R&D on neglected diseases," Working Papers 36, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
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