Advancing Pharmaceutical R&D on Neglected Diseases: Valuing Push and Pull Economic Incentive Mechanisms

This paper describes an innovation framework that fosters public-private partnership as a means to overcoming the barriers of developing medicines to combat neglected diseases. We define neglected diseases as those therapeutic areas for which a great unmet need exists but for which market demand is lacking so that innovation-driven companies cannot recoup their investments in product research, development and large-scale manufacturing. Tropical infectious diseases like malaria represent an enormous burden of illness but are poverty related because the majority of people affected by them live in poor resource settings making affordability the main issue. On the other hand, rare diseases in advanced economies like cystic fibrosis affect few people so the volume-related demand is low despite the fixed cost of R&D. In addition, problems with access to medicines against widespread diseases persist due to a lack of awareness and financial constraints within the health care system resulting in under diagnosis which in turn leads to slow adoption and drug utilization. The common thread running through this disease category is that pharmaceutical companies cannot on their own address the specific challenges posed by neglected diseases. This paper provides insight into how a number of push and pull incentive systems that foster innovation may overcome the problem, and how the related corporate strategy and public policy can be aligned.