“Every year, millions of people die from preventable and treatable diseases, especially in poor countries,” World Bank Chief Economist Joseph Stiglitz, a Nobel laureate, writes in this BusinessDay opinion piece. “In many cases, life-saving medicines can be cheaply mass-produced, but are sold at prices that block access to those who need them,” and “many die simply because there are no cures or vaccines, because so little of the world’s valuable research talent and limited resources is devoted to addressing the diseases of the poor,” he continues, arguing, “This state of affairs represents a failure of economics and law that urgently needs to be corrected.” Stiglitz continues, “The good news is that there are now opportunities for change, most promisingly through an international effort headed by the World Health Organization that would begin to fix the broken intellectual-property regime that is holding back the development and availability of cheap drugs.”

“[T]wo main problems limit the availability of medicines today” — “[o]ne is that they are very costly; or, more accurately, the price charged for them is very high, though the cost of producing them is but a fraction of that amount”; and “[s]econd, drug development is geared toward maximizing profit, not social benefit, which skews efforts directed at the creation of medicines that are essential to human welfare,” Stiglitz continues. But “[i]t doesn’t have to be this way,” because “[a] solution to both high prices and misdirected research is to replace the current model with a government-supported prize fund,” under which “innovators are rewarded for new knowledge, but they do not retain a monopoly on its use,” he writes, noting that Sen. Bernie Sanders (I-Vt.) recently introduced the Prize Fund for HIV/AIDS Act in Congress. Stiglitz concludes, “Reforming our innovation system is not just a matter of economics. It is, in many cases, a matter of life and death. It is therefore essential to de-link [research and development (R&D)] incentives from drug prices, and to promote greater sharing of scientific knowledge” (5/21).