The proportion of people who have access to medicines remains deplorably low in most poor countries. This problem, which is largely the result of inadequate healthcare infrastructure and government interventions of various kinds, is clearly one that must be addressed as a matter of priority. Nevertheless, even as this problem is tackled, there is a continuing need for new medicines for the diseases of poverty. Drug resistance is a problem for most of these diseases (in part because of poor oversight of treatment) and especially for tuberculosis, malaria and AIDS. Meanwhile, a small cluster of tropical diseases lack any medicines at all.
The comparative lack of research and development (R&D) activity in this area is not evidence of market failure, as is often claimed by activists. In fact, it would be more accurate to describe it as government failure. Taxation, price controls, a lack of respect for intellectual property and other more general institutional failures constrain both the demand for and supply of new drugs, making R&D into the diseases of poverty commercially nonviable in most cases.
In the short term, it is necessary to examine alternative ways to incentivise R&D for the diseases of poverty. This paper critically surveys the most interesting proposals so far generated by this debate, ranging from ‘push’ mechanisms such as public private partnerships, to ‘pull’ mechanisms such as advance purchase commitments.
While many of the ideas on the table have some merit, policymakers should not lose sight of the fact that the best way to improve health is to create wealth. Governments of lower-income countries will therefore need to address their institutional failings if they hope to create self-sustaining healthcare systems that effectively drive demand for new drugs. Unfortunately, many governments place needless barriers in front of this process, thereby condemning their people to a future of continued ill-health and a reliance on philanthropy from the West.