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Course Overview: Thinking Through the Problem Stephen M. Maurer Designing Strategies for Neglected Disease Research Law Public Policy 190/290

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Owner’s Manual

“The power of instruction is seldom of much efficacy except in those happy dispositions where it is almost superfluous." - Edward Gibbon

This is nominally … A Course About a Specific Innovation Problem (Mostly Economics) But you should think of it as … A Course About R&D Incentives Ongoing Research A Course About Giving Practical Advice (A Potential Initiative) The Hard (Also Rewarding, Interesting) Part… Goals

Interdisciplinary Problems

Three views - Cartoon intuition - “How to do public policy” - A worked example.

Interdisciplinary Problems Drugs for U.S. Drugs for Developing World The Problem

Political Science – Redistribution Drugs for U.S. Drugs for Developing World Interdisciplinary Problems

Biology & Engineering Drugs for U.S. Drugs for Developing World Interdisciplinary Problems

This Course (Primarily) Drugs for U.S. Drugs for Developing World Interdisciplinary Problems

Incentives Design Drugs for U.S. Drugs for Developing World Interdisciplinary Problems

Doing Public Policy - Define Goals  Understand  Identify Bottlenecks  Design a (Hopefully) Elegant Response. Interdisciplinary Problems 2

Doing Public Policy - Define Goals  Understand  Identify Bottlenecks  Design a (Hopefully) Elegant Response. 1.Define Goals Choose an Objective Function! Interdisciplinary Problems 2

Doing Public Policy - Define Goals  Understand  Identify Bottlenecks  Design a (Hopefully) Elegant Response. 2. Understand Take Theory Seriously - “Pharma doesn’t want to prevent diseases, selling drugs is more lucrative.” - “Prizes are only paid if you get a drug.” *Making Contact Between Theory and Evidence Interdisciplinary Problems 2

Doing Public Policy - Define Goals  Understand  Identify Bottlenecks  Design a (Hopefully) Elegant Response. 3. Identify Bottlenecks - What are the Main Innovation Challenges? - The Innovation Toolbox Interdisciplinary Problems 2

Doing Public Policy - Define Goals  Understand  Identify Bottlenecks  Design a (Hopefully) Elegant Response. 4. Design a Response - “No dominant incentive mechanism” - What are the Main Innovation Challenges? - The Innovation Toolbox Interdisciplinary Problems 2

A Concrete Example: Prizes vs. PPPs Prizes How Big Should the Prize Be? $800m ± $115m PPPs Picking Winners Managing Outsourced R&D Getting the Best Ideas … And Also Patents? Access Pricing

Innovation Economics Efficient Procurement (Getting a Good Price) Usually: Efficiency: How intense do we want R&D effort to be? Here: Limited Budget: How much will it cost? Information Asymmetry/Agency Problems (Managing Outsourced R&D) Managers Don’t Know Everything Researchers May Have Diverging Goals Recurring Themes

Innovation Economics, ctd… Eliciting Information (Getting Good Ideas) Good Ideas are (Often) Widely Distributed Counterexamples A prizes for reduced DALYs? A prize for optimized drug compounds? Efficient Access Patents Prices matter! Recurring Themes

“It’s a Great Idea, But Government Will Never Listen” A Lawyer’s Faith Comment

Roadmap

LectureTopicSpeaker Week 1 Introduction AK, SM Jan Defining The Goals: Week 2Disease BurdensKirk Smith, Julia Jan R&D PrioritiesWalsh Week 3AThe Drug Discovery David Ridley Jan. 27Business Week 3B,Drug Development Jim McKerrow 4A Science; The NeglectedSolomon Nwaka Jan. 29-Disease Pipeline Roadmap

LectureTopicSpeaker Week Innovation EconomicsSM, AK 4B – 5B Feb Leading Proposals: Week 6APrice Discrimination and Keith Maskus Feb. 17Patent Pools Week 6BFinancing ProposalsSaul Walker Feb. 19 Week 7APrizesAidan Hollis Roadmap

LectureTopicSpeaker Week 7BFunding Clinical TrialsDean Baker Feb. 26 Week 8AAdvanced Market Michael Kremer Mar. 3Commitments Mar. 6Critical Evaluations Due Week 9APrivate Public Suerie Moon Mar. 10Partnerships Week 9BRegulatory ApprovalDavid Kessler Roadmap

LectureTopicSpeaker Week 10BPolitical EconomyRichard Wilder Mar James Love Week 11-12Incentive Design ChoicesSM, Brian Wright, Mar. 31-Economists RoundtableSuzanne Scotchmer Apr. 9 Week 13Delivering HealthcareJulia Walsh Apr Ndola Prata Week 14Student Papers; -- Apr Concluding Remarks Roadmap

Course Requirements

Class Participation (25%) Wiki (In Class Discussion) Lecture Reporter

Midterm Project Critique an Existing Initiative (25%) Self-assemble

Final Project White Paper (50%) Groups of 4-6 students Ideal: Self-assemble!

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