Thinking About Bioshield Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy IGCC/AAAS.

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Presentation transcript:

Thinking About Bioshield Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy IGCC/AAAS Wye River Biosecurity Workshop August 16, 2006

The Problem The Need Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

The Problem The Need The Budget Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

The Problem The Need The Budget Beyond Analogies Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Current Ideas: 1. Boosted Demand 2. Advanced Purchase Commitments 3. Virtual Pharma Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

1. Boosted Demand Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: Sunk Costs Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

2. Advanced Purchase Commitments M. Kremer & R. Glennerster, Strong Medicine (Princeton University Press 2004) Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: How Big a Prize? Accounting Cost of R&D J. DiMasi, R. Hansen, and H. Grabowski, The Price of Innovation: New Estimates of Drug Development Costs, Journal of Health Economics 22:151 (2003) Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: How Big a Prize? Accounting Cost of R&D Liquidity Constraints Berndt E. et al., Advanced markets for a malaria vaccine: Estimating costs and effectiveness. Working Paper (National Bureau of Economic Research 2005), available at Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: How Big a Prize? Accounting Cost of R&D Liquidity Constraints Bare Bones Programs Global Alliance for TB Drug Development, Economics of TB Drug Development (2006) available at conomics%20Report%20F ull%20(final).pdf. Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

[A]ny plan that has a disparity of $3 billion to $10 billion is one that needs close attention. Thats a variation of 300 percent. So I will be happy to talk to you about it after I read it, but thats a big disparity and a big controversy… - Rep. Nancy Pelosi Edward Epstein, Tearing Down Dam a Bomb In Capitol, SF Chronicle, July B1, 3. Problem Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

3. Virtual Pharma Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Benefit: Competitive Bidding Problem: Picking Winners Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: Picking Winners History Covert N., Cutting edge: A history of Fort Detrick. available at /detrick/cutting_edge/index.cfm?chapter12 Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: Picking Winners History Empirical Evidence Moran M, Ropars AL, Guzman J, Diaz J, Garrison C. The new landscape of neglected disease drug development. London UK: Pharmaceutical R&D Policy Project: Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Problem: Picking Winners History Empirical Evidence Theory Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Some Political Advice: Return of The Dollar-a-Year Men? Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

Heck, Its Just A Business Plan… Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy

References S. Maurer, "Choosing the Right Incentive Strategy for R&D in Neglected Diseases," World Health Organization Bulletin 84:376 (2006), available at S. Scotchmer, Innovation & Incentives (MIT University Press 2004). G. Spagnolo, Procuring Innovation, in Handbook of Procurement (Spagnolo, Dimitri & Piga eds.), Cambridge, UK: Cambridge University Press (2006: in press). Stephen M. Maurer Information & Homeland Security Project UC Berkeley/Goldman School of Public Policy