Hollis, Aidan

In Chapter 4 Aidan Hollis examines three proposals in considerable detail. The first is an Advanced Purchase Commitment by sponsors, who offer an explicit subsidy in advance for innovative products. The subsidy offer includes a fixed-dollar amount per unit as well as a commitment to purchase a specific number of units at that price. The second proposal is that sponsors pay annual rewards based on the therapeutic effectiveness of innovative drugs. The third approach is to offer a patent extension on patented products to pharmaceutical companies if they successfully developed a vaccine for a disease such as HIV/AIDS that is highly prevalent, particularly in some low-income countries. Hollis concludes that the third approach is an extremely inefficient way to reward innovation. By contrast, the second approach could correct the market failure directly by rewarding innovative drugs according to their therapeutic effectiveness, which is measurable by cost-effectiveness analysis, a topic discussed later in greater detail in Chapters 10 and 11. 

Drugs for Neglected Diseases New Incentives for Innovation Aidan Hollis... 

Aidan Hollis continues the discussion about neglected diseases and illuminates how research can foster R D for neglected diseases. He makes the important point that poor countries not only face the problem of neglected diseases, but also must usually contend with a number of other problems, including a lack of doctors, nurses, clinics, hospitals, and equipment. 

Aidan Hollis is Associate Professor of Economics at the University of Calgary and a Research Fellow of the Institute of Health Economics. His principal research interests are competition and innovation policies in pharmaceutical markets. 

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