Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases

  • Michael Kremer &
  • Rachel Glennerster
Princeton University Press: 2004. 152 pp. $24.95, £15.95 0691121133 | ISBN: 0-691-12113-3
Cost of living: who will pay for new drugs to combat ‘neglected diseases’ such as sleeping sickness? Credit: P. ROBERT/CORBIS

Access to essential drugs for poor people in developing countries has made headlines several times during the past few years. Most of the media attention has centred on a few specific topics within this broad theme: the debate about access to antiretroviral drugs against AIDS; the hot economic and political topics of patents and the World Trade Organization agreements; and the lack of research and development (R&D) to create desperately needed new drugs for ‘neglected diseases’, conditions that predominantly affect poor people in developing countries.

The central theme that links these issues together is how to encourage research and development for new drugs and ensure that everyone has quick access to the medicines they need. Only a few years ago the sole paradigm, recognized not only by industry but also within most academic circles, was ‘patent + market → R&D’. But now alternative or at least complementary paradigms are being considered. Michael Kremer and Rachel Glennerster, the authors of Strong Medicine, favour the latter route. In their approach, they fall between those who still think (or at least claim) that the current system only needs minor adjustments and those who want to see complete change on a global scale.

Kremer and Glennerster's aim is to find practical ways to restart R&D for these neglected diseases. They believe that market and public bodies have failed to motivate R&D — only 1% of drugs launched onto the market during the past 25 years target such diseases. They are convinced that appropriate policies and public commitment could motivate private investment in this area. This strategy has already been followed with rare diseases, through ‘orphan drug’ legislation passed in rich countries, which grants tax incentives and guaranteed periods of exclusivity to companies that invest in R&D for drugs to treat rare conditions.

The authors comment on the various tools that have been suggested or tested to influence R&D. ‘Push’ mechanisms refer to financing research inputs such as grants to academics, or tax credits for specific R&D activities. ‘Pull’ solutions mean financing research outputs, such as a commitment to create a profitable market for the expected products. Kremer and Glennerster tend to favour pull solutions, because these are less bureaucratic and are closer to market-like solutions (which the authors prefer in general). After a short discussion of various pull solutions, the authors opt for one in which somebody creates the market by committing to purchase a certain quantity of drugs at a fixed price.

And this is where this book becomes really original. Kremer and Glennerster enter into a computation for assessing the amount of sales that would be enough to motivate private companies to embark on such a deal with a sponsor. Their conclusion is that the system could work with a guaranteed price of $15–20 per complete vaccination for the first 150–200 million individuals vaccinated, the rest of the vaccine supply being priced at a modest mark-up over production cost.

Who should pay for all this? Kremer and Glennerster believe that this kind of spending would be popular with governments of rich countries, as public money would only be invested in concrete outcomes — not in research that might lead nowhere. They also mention the World Bank and the Bill and Melinda Gates Foundation (from which they acknowledge financial support). Finally, they believe that a modest co-payment from recipient countries would be desirable.

The book does have some limitations. First, the reasoning is mainly based on vaccines and focuses mostly on the three biggest killers: AIDS, malaria and tuberculosis. These targets are worthwhile, but they are also the easiest, because vaccines generally need only a few jabs to create a long-term benefit, and because hundreds of millions of people are affected by these diseases. It may be more difficult to convince the public and private sectors to do R&D for the most neglected diseases, such as sleeping sickness or Buruli ulcer.

Another important limitation is that the solution proposed by Kremer and Glennerster is mainly a tool. They recognize that a long-term political commitment will be necessary, but they do not elaborate on how to achieve this. This will frustrate those who believe that such a long-term commitment needs to take the form of an international framework or treaty for neglected diseases. Some people within the World Health Organization and Médecins Sans Frontières remember how difficult it was to mobilize the few million dollars necessary to secure the production of a new combination vaccine against meningitis, just a few months before the 2004 epidemic in Africa. It would have been much easier if some kind of global R&D fund had been available.

Thus, some people might criticize this book for stopping mid-way. But Kremer and Glennerster's solution does imply that the private drug R&D activity could be more appropriately directed by public will and money — something that others might consider a step too far already.

This book should interest anyone involved in international public health, politics and economics. It is a valuable effort to find a practical solution to a major problem, and most readers, when they've finished the book, will probably say “Let's just try it!”