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

Rutger Daems, Edith Maes and Guy Nuyts
Additional contact information
Rutger Daems: Planet Strategy Group, Brussels, Belgium
Edith Maes: Maastricht School of Management, PO Box 1203, 6201 BE Maastricht, The Netherlands
Guy Nuyts: Janssen, Pharmaceutical Companies of Johnson & Johnson

No 2013/11, Working Papers from Maastricht School of Management

Abstract: 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.

Keywords: pharmaceutical R&D; neglected diseases; push mechanism; pull mechanism; innovation; investment risk incentive (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013-04
New Economics Papers: this item is included in nep-hea and nep-ino
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http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2013-11.pdf First version, 2013 (application/pdf)

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