'If I had a hedge fund, I would cure diabetes': endogenous mechanisms for creating public goods
Tóm tắt
We consider the problem of organizing capital to produce public goods with broad societal value. We review why market corrections via government subsidies or philanthropic initiatives are inadequate, in addition to considering the paradox of patents. Our proposed mechanism (an Ever-growing Prize and a Patent Repository) directs capital towards two innovation problems routinely overlooked: (1) problems for which the reward is insufficient even with established mechanisms (e.g. patents or academic prestige), and (2) problems for which the reward is large, but the effort risk is incalculable. The proposed hedge fund mechanism facilitates crowdsourcing, addressing the challenge of determining problems with broad societal interest; the ever-growing prize allows for an emergent rather than predetermined reward; the patent repository turns private intellectual property into a public good for target problems while circumventing the inventors’ threat of patent expiration. We guide this discussion by considering two problems: treating Cystic Fibrosis and curing Diabetes.
Tài liệu tham khảo
Anomaly J (2015) Public goods and government action. Polit Philos Econ 14(2):109–128
Arrow K (1963) Social choice and individual values. Wiley, New York
Azoulay P, Graff-Zivin F (2018) One superstar funeral at a time. Science 361(6408):1195
Bateman B (2015) Analyzing Market Failure: Adam Smith and John Maynard Keynes. Hist Polit Econ 47(1):127–144
Bator F (1958) The anatomy of market failure. Q J Econ 72(3):351–379
Benkler Y (2006) The wealth of networks: how social production transforms markets and freedom. Yale University Press
Berndt R, Hurvitz J (2005) vaccine advance-purchase agreements for low-income countries: practical issues. Health Aff 24(3):653–665
Berndt ER, Glennerster R, Kremer MR, Lee J (2007) Advance market commitments for vaccines against neglected diseases: estimating costs and effectiveness. Health Econ 16:491–511
Bock J (1964) Fiddler on the roof: (from the Broadway Musical “Fiddler on the roof”) RCA Victor
Boldrin M, Levine D (2013) The case against patents. J oEcon Perspect 27(1):3–22
Booth BL (2009) Beyond the biotech IPO: a brave new world. Nat Biotechnol 27:705–709
Brunt L, Lerner J, Nicholas T (2012) Inducement prizes and innovation. J Ind Econ 60(4):657–696
Cernuschi T, Furrer E, Schwalbe N, Jones A, Berndt E, McAdams S (2011) Advance market commitment for pneumococcal vaccines: putting theory into practice. Bul World Health Org 89(12):913–918
Chandy RK, Tellis GJ (1998) Organizing for radical product innovation: the overlooked role of willingness to cannibalize. J oMark Res 35(4):474–487
Christensen C (1997) The innovator’s dilemma: when new technology causes great firms to fail. Harvard Business Review Press
Clancy M, Moschini G (2013) Incentives for Innovation: patents prizes and research contract. Appl Econ Perspect Policy 35(2):206–241
Cookson C (2020) Gates foundation to concentrate on coronavirus. Financial Times, Berlin
Davis S, Button-Simons K, Bensellak T et al (2019) Leveraging crowdsourcing to accelerate global health solutions. Nat Biotechnol 37:848–850
Desowitz R (1991) The Malaria capers: tales of parasites and people. W.W. Norton, New York
Ellsberg D (1961) Risk, ambiguity, and the savage axioms. Q J Econ 75(4):643–669
Fernandez JM, Stein RM, Lo AW (2012) Commercializing biomedical research through securitization techniques. Nat Biotechnol 30:964–975
Fernandez JM, Lo AW, Stein RM (2013) Can financial engineering cure cancer? Am Econ Rev 103:406–411
Fleming L (2001) Recombinant uncertainty in technological search. Manag Sci 47:117–132
Ford D, Nelson B (2014) The view beyond venture capital. Nat Biotechnol 32:15–23
Gambardella A (1995) Science and innovation: the US pharmaceutical industry during the 1980s. Cambridge University Press, Cambridge
GAVI The Vaccine Alliance (2017) Advance market commitment for pneumococcal vaccines, Annual Report 1 Jan–31 December 2017
Gewin V (2017) Grand challenges. Nature 551:129–131
Glennerster R, Kremer M, Williams H (2006) Creating markets for vaccines. Innov Winter 1(1):67–79
Grabowski H (2008) Follow-on Biologics: data exclusivity and the balance between innovation and competition. Nat Rev Drug Discov 7:479–488
Hardin G (1968) The Tragedy of the Commons. Science 162(3859):1243–1248
Heller M, Eisenberg R (1998) Can patents deter innovation? The anticommons in biomedical research. Science 280(5364):698–701
Hill S, Heiser L, Cokelaer T et al (2016) (2016), Inferring causal molecular networks: empirical assessment through a community-based effort. Nat Methods 13:310–318
Hudson V (2001) Rethinking cystic fibrosis pathology: the critical role of abnormal reduced glutathione (GSH) transport caused by CFTR mutation. Free Radic Biol & Med 30(12):1440–1461
Kalil T (2006) Prizes for Technological Innovation, Discussion Paper 2006–08. The Hamilton Project, Brookings Institution, Washington DC
KEI Research Note (2008) Selected innovation prizes and Reward Programs, Washington, DC
Keynes J (1936) The general theory of employment, interest and money. Macmillan, London
Knight F (1921) Risk, uncertainty and profits. Schaffner & Marx; Houghton Mifflin Company, Boston
KPMG (2017) American Diabetes Association, Consolidated Financial Statements and Consolidated Schedules. http://main.diabetes.org/dorg/PDFs/Financial/ADA2017ConsolidatedFinancials.pdf. Accessed 31 Dec 2017
Kremer M, Williams H (2010) Incentivizing innovation: adding to the toolkit. In: Lerner J, Stern S (eds) Innovation policy and the economy, vol 10. University of Chicago Press, Chicago
Levine D (2009) Eyes on the Prize? Sci 323(5919):1296–1297
Marx K, Engels F (1848) The Communist Manifesto. London, Chicago, Ill. :Pluto Press, 1996
Maxmen A. (2018), Scientists Stunned to as Medical Non-Profit Group Abruptly Ends Research Grants, Nature News, August 2
McKinsey & Company (2019) And the winner is … Capturing the promise of philanthropic prizes. Research Report
Medema S (2007) The hesitant hand: Mill Sidgwick, and the evolution of the theory of market failures. Hist Polit Econ 39(3):331–358
Meloso D, Copic J, Bossaerts P (2009) Promoting intellectual discover: patents versus markets. Science 323(5919):1335–1339
Miller W (2014) Woo-Hoo, i found a cure. https://www.gocomics.com/nonsequitur/2014/06/24. Accessed 24 June 2014
Mueller-Langer F (2013) Neglected infectious diseases: are push and pull incentive mechanisms suitable for promoting drug development research? Health Econ Policy Law 8(2):185–208
Murray F, Stern S, Campbell G, MacCormack A (2012) Grand innovation prizes: a theoretical, normative and empirical evaluation. Res Policy 41:1779–1792
Murray F, Aghion P, Dewartripont M, Kolev J, Stern S (2016) Of mice and academics: examining the effect of openness on innovation. Am Econ J Econ Policy 8(1):212–252
National Institute of Health (2019) Estimates of funding for various research condition, and disease categories (RCDC). https://report.nih.gov/categorical_spending.aspx. Accessed 19 Apr 2019
Nelson R, Winter SG (1982) An evolutionary theory of economic change. Belkap, Cambridge
Pavitt K (1963) Research, innovation and economic growth. Nature 200(4903):206–210
Pollack A (2014) Deal by cystic fibrosis foundation raises cash and some concerns. New York Times
Reich M (2000) The Global Drug Gap. Sci 287(5460):1979–1981
Richards L (2002) A mother’s fight against CF. Modern Drug Discov 5(4):19–20
Sampat B, Williams H (2019) How do patents affect follow-on Innovation? Evidence from the Human Genome. Am Econ Rev 109(1):203–236
Samuelson P (1969) Pure theory of public expenditure and taxation. In: Margolis J, Guitton H (eds) Public economics: an analysis of public production and consumption and their relations to the private sectors. Macmillan, London
Samuelson P (1970) Economics: an introductory analysis, 8th edn. McGraw-Hill
Schwartz J (2004) Private rocket ship visits space again to win $10 million prize. New York Times
Sobel D (1996) Longitude: The true story of a lone genius who solved the greatest scientific problem of his time. Penguin Press, New Your
Sorensen I (2012) Crowdsourcing and outsourcing: the impact of online funding and distribution on the documentary film industry in the UK. Media Cult Soc 34(6):726–743
Stamp J (1933) Must science ruin economic progress. Nature 132(3333):429–432
Stephan P (2015) How economics shapes science. Harvard University Press
Tellis GJ (2013) Unrelenting innovation: how to create a culture for market dominance. John Wiley & Sons
Vanderbilt T (2019) “Reverse Innovation” could save lives. Why aren’t we embracing it? The New Yorker
Visca A, Bishop C, Hilton S, Hudson V (2008) Improvement in clinical markers in CF patients using a reduced glutathione regimen: an uncontrolled, observational study. J Cystic Fibros 7:433–436
Visca A, Bishop C, Hilton S, Hudson V (2015) Oral reduced l-glutathione improves growth in pediatric cystic fibrosis patients. J Pediatr Gastroenterol Nutr 60(6):802–810
Whiting P, Burgers L, Westwood M, Ryder S, Hoogendoom M, Armstrong N, Allen, A, Severens, H, Kleijnen J (2014) Ivacoftor for the treatment of patients with cystic fibrosis and the G551D mutation: a systematic review and cost-effectiveness analysis, Health Technol Assess, no 18.18, Southampton (UK): NIHR Journals Library
Williams H (2012) Innovation inducement prizes: connecting research to policy. J Policy Anal Manag 31(3):752–776
Williams H (2013) Intellectual property rights and innovation: evidence from the human genome. J oPolit Econ 121(1):1–27
Williams H (2018) On the shoulders of giants. Science 361(6408):1195