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

Author

Listed:
  • Rutger P. Daems PhD

    (Planet Strategy Group, Brussels, Belgium)

  • Edith L. Maes DBA

    (Maastricht School of Management, PO Box 1203, 6201 BE Maastricht, The Netherlands)

  • Guy Nuyts, PhD

    (Janssen, Pharmaceutical Companies of Johnson & Johnson)

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.

Suggested Citation

  • Rutger P. Daems PhD & Edith L. Maes DBA & Guy Nuyts, PhD, 2013. "Advancing Pharmaceutical R&D on Neglected Diseases: Valuing Push and Pull Economic Incentive Mechanisms," Working Papers 2013/11, Maastricht School of Management.
    • Handle: RePEc:msm:wpaper:2013/11
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    File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2013-11.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    pharmaceutical R&D; neglected diseases; push mechanism; pull mechanism; innovation; investment risk incentive;
    All these keywords.

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