Open source, charitable drug development for world's poorest
Alex Singleton wrote an interesting article for the Globalisation Institute which we reproduce here.
New drugs to counter the 'diseases of poverty' are hard to come by. As The Economist has pointed out: "About 90% of the planet's disease burden falls on the developing world. Yet only 3% of the research and development expenditure of the pharmaceutical industry is directed toward those ailments." The problem, commonly defined, is that poor people do not have an effective demand for new drugs. They are too poor to be attractive customers for Western pharmaceutical companies.
International Policy Network recently published a report, Incentivising research & development for the diseases of poverty, which makes some important points about the healthcare infrastructure of poor countries. The report's conclusion that the best way of dealing with the problem is for poor countries to become rich. In other words, they don't have an effective demand now: it's really important for them to get that effective demand.
In the shorter-term, the report discusses several ways that drugs to combat 'diseases of poverty' could be developed. One suggestion discussed is that drug companies who do work on third world drugs could gain extensions on the patent lengths of drugs aimed at the developed world. This is an unattractive proposal. Higher prices for pharmaceuticals cause less consumption. Thus, extending patent lengths on drugs in developed countries would have a negative effect on the health of those countries. In the US, where the uninsured pay the highest prices for drugs, it would be the uninsured that would suffer the most. It is perverse to try and help the world's poor by attacking health in the rest of the world.
It is difficult to see the idea working at all well in practice. The likely effect would be that companies would make considerable noise about working on drugs for developing countries in order to extract as much extra patent protection as possible. Pharmaceutical companies' profits would increase, but at the same time causing problems for consumers in the developed world. Their income would not be particularly related to the success of their third world drugs, so the normal market incentives would not exist. Moreover, there is a stack of evidence that pharmaceutical patent lengths are already overkill. Extending them further would be a remarkable thing to do, and politically difficult in America as the high cost of drugs is an important political issue.
So what should we do? Until poor countries have an effective demand, charitable development offers the best solution. Of course, Britain has a prominent charity doing non-profit development called Cancer Research UK. Now we need more such charities, but focussed on the world's poorest. The Economist has featured an interesting development: the Institute for OneWorld Health, which is a non-profit pharmaceutical company dedicated to the diseases of poverty. Charities are a better model than public sector development because there is competition between charities. They have to justify themselves to their supporters. There is distance between them and politics.
There is also a strong case for greater use of an 'open-source' approach to development, a la the Tropic Disease Initiative. A dispersed approach would enable scientists to volunteer some of their time, for charities to contribute to a range of projects, and for the inclusion of developing country scientists, which might in turn help improve the scientific base of the poorest countries.
In the IPN report, it is stressed that open source drugs ought to follow a BSD license rather than a GPL license. These are popular licenses in open source software development and use copyright law to determine what may be done with the software. In drugs, we are talking about patents, not copyright. What the report means is that pharmaceutical companies should be able to take an open-source developed drug, work on it a bit and then patent it. Given that a key purpose of open source development is to provide drugs at marginal cost, I am not sure whether this is going to be a popular idea. Moreover, such patents might have the effect of preventing open source developers from building on their own work. In software, the BSD license merely lets Apple build on BSD software and produce its Mac operating system. Apple's copyright does not prevent others from also building upon BSD software. But in drug development a BSD-style license might enable drug companies - through patents - to stop others from building upon open source drugs. That would not be a desirable outcome.
In the long run, wealth is what will eliminate diseases of poverty. But in the short-run, developing drugs for the poor is not an insurmountable problem.
New drugs to counter the 'diseases of poverty' are hard to come by. As The Economist has pointed out: "About 90% of the planet's disease burden falls on the developing world. Yet only 3% of the research and development expenditure of the pharmaceutical industry is directed toward those ailments." The problem, commonly defined, is that poor people do not have an effective demand for new drugs. They are too poor to be attractive customers for Western pharmaceutical companies.
International Policy Network recently published a report, Incentivising research & development for the diseases of poverty, which makes some important points about the healthcare infrastructure of poor countries. The report's conclusion that the best way of dealing with the problem is for poor countries to become rich. In other words, they don't have an effective demand now: it's really important for them to get that effective demand.
In the shorter-term, the report discusses several ways that drugs to combat 'diseases of poverty' could be developed. One suggestion discussed is that drug companies who do work on third world drugs could gain extensions on the patent lengths of drugs aimed at the developed world. This is an unattractive proposal. Higher prices for pharmaceuticals cause less consumption. Thus, extending patent lengths on drugs in developed countries would have a negative effect on the health of those countries. In the US, where the uninsured pay the highest prices for drugs, it would be the uninsured that would suffer the most. It is perverse to try and help the world's poor by attacking health in the rest of the world.
It is difficult to see the idea working at all well in practice. The likely effect would be that companies would make considerable noise about working on drugs for developing countries in order to extract as much extra patent protection as possible. Pharmaceutical companies' profits would increase, but at the same time causing problems for consumers in the developed world. Their income would not be particularly related to the success of their third world drugs, so the normal market incentives would not exist. Moreover, there is a stack of evidence that pharmaceutical patent lengths are already overkill. Extending them further would be a remarkable thing to do, and politically difficult in America as the high cost of drugs is an important political issue.
So what should we do? Until poor countries have an effective demand, charitable development offers the best solution. Of course, Britain has a prominent charity doing non-profit development called Cancer Research UK. Now we need more such charities, but focussed on the world's poorest. The Economist has featured an interesting development: the Institute for OneWorld Health, which is a non-profit pharmaceutical company dedicated to the diseases of poverty. Charities are a better model than public sector development because there is competition between charities. They have to justify themselves to their supporters. There is distance between them and politics.
There is also a strong case for greater use of an 'open-source' approach to development, a la the Tropic Disease Initiative. A dispersed approach would enable scientists to volunteer some of their time, for charities to contribute to a range of projects, and for the inclusion of developing country scientists, which might in turn help improve the scientific base of the poorest countries.
In the IPN report, it is stressed that open source drugs ought to follow a BSD license rather than a GPL license. These are popular licenses in open source software development and use copyright law to determine what may be done with the software. In drugs, we are talking about patents, not copyright. What the report means is that pharmaceutical companies should be able to take an open-source developed drug, work on it a bit and then patent it. Given that a key purpose of open source development is to provide drugs at marginal cost, I am not sure whether this is going to be a popular idea. Moreover, such patents might have the effect of preventing open source developers from building on their own work. In software, the BSD license merely lets Apple build on BSD software and produce its Mac operating system. Apple's copyright does not prevent others from also building upon BSD software. But in drug development a BSD-style license might enable drug companies - through patents - to stop others from building upon open source drugs. That would not be a desirable outcome.
In the long run, wealth is what will eliminate diseases of poverty. But in the short-run, developing drugs for the poor is not an insurmountable problem.
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