Economic Prizes: Filling the Gaps in Pharmaceutical Innovations

64 Pages Posted: 31 Jul 2006

See all articles by Bryan P. Schwartz

Bryan P. Schwartz

University of Manitoba - Faculty of Law

Marhi Kim

University of Manitoba - Faculty of Law

Date Written: June 29, 2005

Abstract

This paper identifies the importance of creating a strong innovation policy to support industrial growth and strengthen Canada's competitiveness in a globalized marketplace. This paper summarizes market failures in the pharmaceutical industry that inflate the cost of healthcare in Canada and hinder research and development for treatments of diseases that primarily affect welfare sectors. This paper proposes a system of cash prizes to reward researchers upon production of demonstrably effective and tested products (or processes) that will improve healthcare. The prize authority would pre-specify diseases for which treatments are a priority and offer to pay a cash prize in proportion to the relative social value (cost savings) of any innovation that offers a solution, without pre-specifying the technical requirements. This approach is particularly innovative as it encompasses any type of healthcare innovation, patentable or non-patentable - thereby tapping into the enormous potential of overlooked but highly valuable innovations. In the long run, such a system will help control the high cost of healthcare in Canada, assist the economies of developing countries and improve Canada's international standing as a leader in industrial innovation and foreign aid policy.

Keywords: pharmaceutical, innovation, economic, prizes, intellectual property, health, market failures

Suggested Citation

Schwartz, Bryan P. and Kim, Marhi, Economic Prizes: Filling the Gaps in Pharmaceutical Innovations (June 29, 2005). Available at SSRN: https://ssrn.com/abstract=920063 or http://dx.doi.org/10.2139/ssrn.920063

Bryan P. Schwartz

University of Manitoba - Faculty of Law ( email )

Winnipeg R3T 5V4, Manitoba
Canada

Marhi Kim (Contact Author)

University of Manitoba - Faculty of Law ( email )

Winnipeg R3T 5V4, Manitoba
Canada

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