Download Rebecca Wolf. Prize Fund Proposals Literature Reivew.

PIJIP: International Access to Medicines
Prize Fund Proposals Literature Review
Michael Abramowicz, Perfecting Patent Prizes, 56 Vand. L. Rev. 115 (2003).
 Argues that even an imperfect prize system might improve social welfare relative
to the patent system. Suggests that a flexible system of awarding prizes is
preferable to a strict formula or algorithm. Addresses and negates concerns that
flexibility in the prize system is (1) haphazard and (2) inaccurate.
Dean Baker, The Benefits and Savings from Publicly-Funded Clinical Trials of
Prescription Drugs, Center for Economic and Policy Research (2008), available at
http://www.cepr.net/documents/publications/clinicaltrials_2008_03.pdf.
 This paper describes various benefits of a system of publicly financed prescription
drug prices. This proposal focuses on the establishment of a network of
independent companies that would be expected to replace the current clinical
testing system performed and/or financed by the pharma industry.
Dean Baker, Getting More for Less: The Not-So-Obvious Benefits of Publicly
Funded Trials for New Drugs, The Milken Institute Review 46 (2008), available at
http://www.cepr.net/documents/publications/milken_2008_07.pdf.
 This article outlines a proposal for publicly financed clinical trials that builds on a
plan offered earlier by Tracy Lewis, Jerome Reichman, and Anthony So of Duke
University in The Economists’ Voice, January 2007 (www.bepress.com/ev).
John H. Barton & Ezekiel J. Emanuel, The Patents-Based Pharmaceutical
Development Process, 294 J. Am. Med. Ass’n. 2075 (2005).
 Recommends four reforms: (1) having no requirement to test new drug products
against existing products prior to approval but requiring rigorous comparative
post-approval testing; (2) international tiered pricing and systematic safeguards to
prevent flow-back; (3) increased government funded research and buy-out for
select conditions; (4) targeted experiments using alternative approaches to address
health conditions that not received adequate attention in recent years.
Steve Calandrillo, An Economic Analysis of Intellectual Property Rights, 9 FORDHAM
IP, MEDIA & ENTERTAINMENT L.J. 301 (1998).
 Highlights the importance of bringing private incentives to develop socially useful
information when its development cost is less than its social value. Argues for the
superiority of a government run prize system over traditional patents and includes
responses to common criticisms of prize systems.
Herschel F. Clesner, Payment for Discoveries and Innovations in the Soviet Union 5
Pat. Trademark & Copy J. Res. & Ed. 52 (1962).
 Discusses the prize system in the Former Soviet Union
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Eric A.A. de Laat, Patents or Prizes: Monopolistic R & D and Asymmetric
Information, INT’L J. IND. ORG. 369 (1996).
 Compares the benefits of research prizes and patents regarding innovation
incentives. Discusses asymmetric information about costs and the market.
Provides complicated algorithm for determining whether a patent or prize is more
beneficial in a given situation – mostly based upon available of information about
costs and the market.
Joseph A. DiMasi & Henry G. Grabowski, Patents and R & D Incentives: Comments
on Hubbard and Love Trade Framework for Financing Pharmaceutical R & D,
WORLD HEALTH ORGANIZATION (June 25, 2004), available at
http://www.who.int/intellectualproperty/news/en/Submission3.pdf.
 Evaluates Love and Hubbard’s proposal (see below). Suggests that current levels
of pharmaceutical R & D can be maintained along with lower costs for medicines
if one or all of the alternative mechanisms replace the patent system. Proposals
two alternative models: (1) prizes presented for successful innovative effort; (2)
government authority procures R & D effort.
Anne Duncan, GlaxoSmithKline and Access to Essential Medicines, London Business
School (2004), available at
http://www.dea.unipi.it/db/UtentiEA/mminoja/Glaxo%20case%202.pdf.

Thomas Alured Faunce & Hitoshi Nasu, Three Proposals for Rewarding Novel
Health Technologies Benefiting People Living in Poverty: A Comparative Analysis of
Prize Funds, Health Impact Funds and a Cost-Effective/Competitive Tender Treaty, 1
Public Health Ethics 124 (2008). [ordered on ILL]
 This paper analyzes three different academic proposals for addressing the needs
of the poor in relation to new, rather than essential medicines. It focuses
primarily on: (1) R & D prize funds; (2) a health impact fund system, and (3) a
multilateral treaty on health technology cost-effectiveness evaluation and
competitive tender. The paper compares the different types of proposals,
analyzing respective strengths and weaknesses.
Henry Grabowski, Increasing R & D Incentives for Neglected Diseases – Lessons
from the Orphan Drug Act, Duke University, available at
http://www.econ.duke.edu/Papers/Other/Grabowski/Orphan_Drug.pdf.
 Investigates the feasibility of developing an orphan drug-type program oriented to
the neglected diseases of developing countries.
Nancy Gallini & Suzanne Scotchmer, Intellectual Property: When is it the Best
Incentive System? University of California, Berkeley Working Paper E01-303,
available at http://socrates.berkeley.edu/~scotch/G_and_S.pdf.
 Reviews the economic reasoning that supports patents and other IP over the
alternatives. Compares IP, procurement contracts, and prizes. Argues that when
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sponsors know the value of innovations, a system with prizes linked to the social
value of innovation is optimal.
Robert C. Guell & Marvin Fischbaum, Toward Allocative Efficiency in the
Prescription Drug Industry, 73 Milbank Q. 213 (1995).
 Set forth an analytic case for a prize system. Focus on the prescription drug
industry. Describe the inefficiency associated with the grant of a limited
monopoly. Recognize that the static efficiency from elimination of the patent
system might be outweighed by the system’s dynamic efficiency. Propose that
the government would buy prescription drug patents at a price equaling the net
present value of the profit they would have generated and distribute the patents to
U.S. drug manufacturers.
Aidan Hollis, An Efficient Reward System for Pharmaceutical Innovation,
UNIVERSITY OF CALGARY DEPARTMENT OF ECONOMICS (Jan. 17, 2005), available at
http://econ.ucalgary.ca/fac-files/ah/drugprizes.pdf.
 Proposes a novel reward system for pharmaceutical innovation, in which
innovators are rewarded based on the incremental therapeutic benefits of their
innovation. Argues that when rewards are paid directly to innovators, patents
could be compulsorily licenses to enable competitive pricing. Reduced
expenditures on patent drugs would enable governments to fund rewards.
Aidan Hollis, An Optional Reward System for Neglected Disease Drugs, UNIVERSITY
OF CALGARY DEPARTMENT OF ECONOMICS (May 18, 2005), available at
http://econ.ucalgary.ca/fac-files/ah/optionalrewards.pdf.
 Proposes offering rewards to drug innovators who give up exclusive patent rights.
Rewards are based on the incremental effects of the innovations in developing
countries.
Aidan Hollis & Thomas Pogge, The Health Impact Fund Making New Medicines
Accessible for All (Incentives for Global Health, 2008).
 Proposes the Health Impact Fund (HIF), an optional pay-for-performance scheme
for new pharmaceuticals, which includes a stream of payments based on the
assessed global health impact of the pharmaceutical.
Tim Hubbard & James Love, Pharma Scenarios for Sustainable Healthcare, World
Business Council for Sustainable Development (May 2001), cited in James Love &
Tim Hubbard, The Big Idea: Prizes to Stimulate R & D for New Medicines, 82 CHI.KENT L. REV 3 (2007).
 Suggests that policy makers should shift focus from standardized rules of
minimum levels of IP protection to agreements between countries to support
investment in R & D. This would provide a more flexible system and would
recognize the value between different approaches. In the 2002 proposal for
development of medicine, prizes would be tied to a country’s GDP.
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Tim Hubbord & James Love, A New Trade Framework for Global Healthcare R & D,
2 PLOS BIOLOGY 147 (2004), available at
http://biology.plosjournals.org/archive/15457885/2/2/pdf/10.1371_journal.pbio.0020052-L.pdf.
 Discusses business models for an effective Virtual R & D Market. Proposes
various approaches: (1) direct funding for drug development; (2) prize model – R
& D organizations compete for rewards for specific R & D output; (3) in a simple
formulation, governments would place large sums into a fund that would be
allocated every year to firms that bring new products to the market. Prizes paid in
one lump sum. New innovations to address current gaps could be further
incentivized.
Thomas Kalil, Prizes for Technological Innovation, THE BROOKINGS INSTITUTE
(2006), available at
http://www3.brookings.edu/~/media/Files/rc/papers/2006/12healthcare_kalil/200612
kalil.pdf.
 Describes Advanced Market Commitments, in which governments commit to buy
a given quantity of a product or service that meets pre-specified performance
goals. Proposes expanding the US government’s use of prizes and AMCs in five
areas: space exploration, African agriculture, vaccines for diseases of the poor,
energy and climate change, and learning technologies. Funding sources could
include the government, foundations, philanthropists, and contestants.
Amy Kapczynski et al., Addressing Global Health Inequities: An Open Licensing
Approach for University Innovations, 20 Berkeley Tech. L.J. 1031 (2005).
 Focuses more on licensing than prizes, but good overview of alternative
approaches to current patent regime. Reviews existing proposals to eliminate the
burdens patents can impose on the global poor, and demonstrate the acute need
for new approaches. Discusses a class of commons-based initiatives. University
settings are particularly equipped for alt. licensing agreements. Proposes
licensing models.
F. Scott Kieff, Property Rights and Property Rules for Commercializing Inventions, 85
MINN. L. REV. 697, 713 (2001). [counter-perspective]
 Argues against prize systems and advocates for patent systems. Provides various
rationale for this opinion and critiques proposals such as Kremer and Shavell &
van Ypersele.
Michael Kremer, Patent Buyouts: A Mechanism for Encouraging Innovation, 113 Q.
J. Econ. 1137 (1998).
 Proposes that the government offer to buy out pharmaceutical patents using a
described auction system to determine price. Patent holders could choose whether
to sell or retain patent monopolies. Warns against potential collusion in auction
system. Seeks to identify a means of objectively pricing patents so that the
government can effect buyouts.
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Benjamin Krohmal, Prominent Innovation Prizes and Reward Programs, KEI
Research Note (2007), available at
http://www.keionline.org/index.php?option=com_content&task=view&id=29 (last
visited Jan. 12, 2008).
 Describes prominent examples of innovation prizes and reward programs that
have been implemented with the primary purpose of stimulating innovation.
Jean Lanjouw, Patents, Price Controls and Access to New Drugs: How Policy Affects
Global Market Entry (2005), World Health Organization, available at
https://www.who.int/intellectualproperty/studies/Lanjouw_Price&LaunchFinal.pdf.
 Discusses how patent rights and price regulation affect whether new drugs are
marketed in a country and how quickly. Covers samples of 68 countries from a
variety of income levels. This is the first systematic analysis of the determinants
of drug launch in developing countries.
Jean Lanjouw, A Patent Policy Proposal for Global Disease, 1 Innovations 108
(2006), available at
http://www.mitpressjournals.org/doi/pdf/10.1162/itgg.2006.1.1.108.
 A novel proposal that tailors protection to fit different worldwide markets for
drugs aimed at different types of disease. Establishes a mechanism that would
only affect inventors whose patents relate to a global disease. Thus, patentees
would be required to choose to make use of their patent protection in either
developed or developing countries, not both.
Jean O. Lanjouw & Iain M. Cockburn, Do Patents Matter?: Empirical Evidence
After Gatt, NBER Working Paper (2000).
 This paper: (1) identifies and creates data sources which can be used to establish
whether there has been any shift in R & D investment and product development
towards least developed countries markets; (2) understand why responses may be
muted. It asks “what needs to go with patent laws to create sufficient incentives
for investment?”
Jean O. Lanjouw & Iain M. Cockburn, New Pills for Poor People? Empirical
Evidence After GATT, 29 World Development 265 (2001).
 Determine trends in the allocation of research to products specific to developing
country markets by using survey data from India (gathered in interviews) and
measures of R & D constructed from a variety of statistical sources.
Tracy Lewis, Jerome Reichman, & Anthony So, Treating Clinical Trials as a Public
Good: The Most Logical Reform, 11 LAW & ECONOMICS WORKSHOP (2006), available
at
http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1147&context=berkeley_la
w_econ.
 Proposes an alternative to the patent system is to remove the direct link between
the clinical trial sponsor and the drug tester. One approach would be to establish
an independent testing agency to conduct clinical trials under specified conditions
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of transparency. Rather than drug companies compensating the scientists
evaluating their own products, the scientists would now work for the testing
agency, supported by general funds collected from the pharmaceutical industry.
Tracy Lewis, Jerome Reichman, & Anthony So, The Economists’ Voice, January
2007, available at www.bepress.com/ev.
 Argues that as long as drug companies retain primary responsibility for
conducting or funding clinical trials, these trials will not be conducted in the best
interest of public health and safety. Thus, clinical trials should be conducted for a
public good; they should be funded and administered by public, rather than
private entities.
Douglas Gary Lichtman, Pricing Prozac: Why the Government Should Subsidize the
Purchase of Patented Pharmaceuticals, 11 HARV. J.L. & TECH. 123 (1997).
 Builds on Kremer’s proposal (see above). Identifies that Kremer’s proposal is
insensitive to the efficiency costs associated with taxation. Outlines an alternative
mechanism for minimizing the social cost of pharmaceutical patents.
Gerard Llobet, Hugo Hopenhayn, and Matthew Mitchell, Rewarding Sequential
Innovators: Prizes, Patents, and Buyouts, 114 J. POL. ECON. 1041 (2006).
 Discusses cumulative innovation with multiple innovators and innovations of
unknown value. Argues that a revised patent system that permits compulsory
licensing by competitors would be preferable to prizes and traditional patents.
James Love, Two Ideas Regarding Innovation and Access, Presentation for the WHO
Commission on Intellectual Property Rights, Innovation and Public Health Open
Forum (June 1, 2005), available at
http://www.who.int/intellectualproperty/events/OpenForumJamesLove.pdf.
 Presents the Medical Innovation Prize Fund Approach: Patent system intact
through product development and market approval. No market exclusivity,
generic companies can freely compete. Medical innovation prize fund provides
financial rewards to developers of new products.
James Love, Drug Development Incentives to Improve Access to Essential Medicines,
84 BULLETIN OF THE WORLD HEALTH ORGANIZATION 408 (2006).
 Discusses human rights issues related to access to medicines. Highlights that the
Medical Innovation Prize Fund and Medical R & D Treaty have the potential of
advancing the global movement to improve international access to medicines.
James Love, Measures to Enhance Access to Medical Technologies, and New Methods
of Stimulating Medical R & D, 40 U.C. DAVIS L. REV. 679 (2007).
 Discusses Medical Innovation Prize Act of 2005. Describes funding and
incentive mechanisms of the proposal under the Act. Benefit of this system is
separation of the market from the product – individuals have access to the
innovation while innovators still receive monetary compensation. Minimum
levels of funding for: (1) global health priorities; (2) diseases under US Orphan
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Drug Act; (3) neglected diseases. Act also offers a reward for new product that
improves an existing product.
James Love, Medical Innovation Prize Fund System of Remuneration. In
Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical
Technologies. James Love, WHO UNDP, 77-80 and 101-104 (2005).
 Explains the Medical Innovation Prize Act of 2005 and Medical Research &
Development Treaty. Argues that technology transfer and capacity building that
would result from a prize fund would help achieve some of the development goals
of the TRIPS Agreement.
James Love & Tim Hubbard, Paying for Public Goods, in CODE: Collaborative
Ownership and the Digital Economy 211-12 (Rishab Aiyer Ghosh ed., 2005).
 Provides proposal for “competitive intermediaries” funded by mandatory
employer/employee contributions of money for various science projects. These
are similar to venture capital funds, but would target investment in projects that
focus on scientific rather than financial returns.
James Love & Tim Hubbard, The Big Idea: Prizes to Stimulate R & D for New
Medicines, KEI RESEARCH PAPER (2007).
 Argues that it would be beneficial to reform the way that we pay for R & D on
new medicines. Rather than give drug developers the exclusive rights to sell
products, the government would award innovators money: large monetary
“prizes” tied to the actual impact of the invention on improvements in health care
outcomes that successful products actually deliver.
Ron Marchant, Managing Prize Systems: Some Thoughts on the Options, 2
KNOWLEDGE ECOLOGY STUDIES (2008), available at
http://www.kestudies.org/ojs/index.php/kes/article/viewArticle/31/48.
 Considers the constraints and objectives and how they may influence the design
of prizes. Proposes ways to use prizes, focusing on the diseases and conditions
that disproportionately impact developing countries. The proposal would combine
R&D grants with a variant of the existing framework of patent protection,
building in voluntary agreements to offer a “license of right” in order to promote
competition and access to the patented inventions.
Carl Nathan, Aligning Pharmaceutical Innovation with Medical Need, 13 Nature
Medicine 304 (2007), available at
http://72.3.224.152/downloads/inthenews/2007/Nature_Med_TB_Special/Aligning_p
harmaceutical_innovation_with_medical_need.pdf.
 Identifies that aligning three basic processes – innovation, incentive and access –
will help (1) promote production of pharmaceuticals for infectious diseases; and
(2) bring vaccines and medicines to poor populations. Proposes two reforms to
the patent system: (1) open access drug companies: drug companies collaborate
with academics and biotechnology and pharmaceutical professionals. This
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research would be funded by the government and by users; (2) a patent track that
rewards innovation based upon its impact on the global burden of disease.
Thomas Pogge, Intellectual Property Rights and Access to Essential Medicines,
available at
http://www.u.arizona.edu/~wbraynen/globalsocietyjustice/papers/pogge.pdf (do not
cite without permission).
 Highlights four drawbacks of prizes: (1) politicians, bureaucrats, and experts
dictate what topics should be researched; (2) prizes involve excessive specificity;
(3) funding under the prize system is haphazard and decided on a case-by-case
basis; (4) even when medicines for neglected diseases are cheep and widely
available, populations in developing countries do not have access to them.
Introduces a pull program that overcomes these four defects.
Steven R. Salbu, AIDS and Drug Pricing: In Search of a Policy, 71 Wash. U. L.Q.
691 (1993).
 Argues that prize systems may be incompatible with the open marketplace of
scientific competition. Even prize systems must be competitive at some level.
Concludes that policy related to the prize or patent system must enhance both
competition and innovation, while protecting both public and private interests.
Suzanne Scotchmer, On the Optimality of the Patent Renewal System, 30 RAND J.
ECON. 181 (1999).
 Discusses that renewal mechanisms are equivalent to direct revelation
mechanisms and therefore cannot be improved upon. Argues that patents should
have a uniform life, rather than varying in length.
Steven Shavell & Tanguy van Ypersele, Rewards versus Intellectual Property Rights,
44 J. L. & ECON. 525 (1998).
 Highlights that one of the largest difficulties with the reward systems concerns
government’s need for information to calculate rewards. Argues that the better
system between standard patents and mandatory prize system, and between a
mandatory prize system and an optional prize system depends on factors like
information asymmetry. Concludes that an optional reward system where the size
of rewards is based upon sales would be better than the standard patent system.
 Brief description: Propose a mathematical model that determines amount of
prize compensation. Assumed asymmetry of knowledge between inventor and
implementing agency.
Joseph E. Stiglitz, Economic Foundations of Intellectual Property Rights, 57 DUKE
L.J. 1693 (2008).
 Proposes a mixed system, which involves both patents and other elements, such as
prizes and government support of basic research.
Joseph Stiglitz, Prizes, Not Patents, 42 POST-AUTISTIC ECON. REV. 46 (2007).
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
Proposes a global prize fund paid by foreign assistance budgets of industrialized
nations that would reward new drug and vaccine developments on the basis of
their health impact. A scientific panel could establish priorities by assessing the
number of people affected and the impact on mortality, morbidity, and
productivity.
Joseph Stiglitz, Scrooge and Intellectual Property Rights, 333 J. Am. Med. Ass’n 1279
(2006)
 Proposes a medical prize fund. Argues that the medical prize fund would ensure
that we make the best possible use of whatever knowledge we acquire, rather than
hoarding it and limiting use to those who can afford it.
Adrian Towse & Hannah Kettler, Advance Price or Purchase Commitments to Create
Markets for Treatments for Diseases of Poverty: Lessons from Three Policies, 83
Bulletin of the World Health Organization (2005), available at
http://www.scielosp.org/pdf/bwho/v83n4/v83n4a14.pdf.
 Looks at advance price or purchase commitments (APPCs) and analyzes three
case studies: (1) introduction of the meningitis C vaccine in the United Kingdom;
(2) the Orphan Drug Act (ODA) in the United States; (3) newly legislated US
Project BioShield for bioterrorist interventions. Concludes that APPCs have the
potential to be a powerful tool and should be tried.
Marlynn Wei, Should Prizes Replace Patents? A Critique of the Medical Innovation
Prize Act of 2005, 13 B.U. J. SCI. & TECH. L. 25 (2005).
 Suggests that a small-scale, operational prize system that provides insight into
how companies will participate and invest in R & D will allow the government to
establish a larger prize system.
Burton A. Weisbrod, Solving the DrugDilemma, Institute for Policy Research News
Northwestern University (Winter 2004), available at
http://www.northwestern.edu/ipr/publications/newsletter/iprn0312/weisbrod.html.
 Offers a plan with two components: (1) Massive awards for those who develop
safe and effective new patented pharmaceuticals. In effect, government would
purchase drug patents; developers of successful new drugs would be rewarded for
successful R&D. (2) Use of the patents would be freely offered to any firms
wishing to produce the pills. This would ensure active competition among generic
producers and low prices, as competition forced prices down toward their low
marginal production cost.
World Business Council for Sustainable Development (WBCSD)
 WBCSD organized the first of two meetings between industry, academics, and
NGOs to discuss intellectual property rights in biotechnology and healthcare.
This meeting sparked interest in new business models for drug development,
including theuse of prize frunds, as well as other approaches to supporting “open
source” medicines.
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Brian Wright, The Economics of Investment Incentives: Patents, Prizes and Research
Contracts, 73 AM. ECON. REV. 691 (1983).
 Analyzes the choice between three alternative means of public intervention in the
research market: patents, prizes, and direct contracting for research purposes.
Barbados & Bolivia Submission to WHO IGWG – TB
 The Grand Prix is offered for 7 years. If there is no winner after 7 years, the
reward could be withdrawn, or offered with a different level of funding and/or
terms of reference. Until the Grand Prix is claimed, the $100 million would be
invested and the earnings would be used to resource two other, smaller prize
programs that would advance the work of the diagnostic device. Winner must
grant licenses to all patents, data and know-how needed for competitive supply of
the test, worldwide.
 The small technical challenges prize is focused on solving small technical
challenges. Research is done in-house or outsourced to firms or non-profit orgs.
With expertise in managing such innovation prizes.
 The biannual best contributions prize is awarded every two years. Up to 3 prizes
available if entrants considered sufficiently good. No prizes given if no
impressive entrants. In that case, money reallocated for the next round of prizes.
At least ½ of the rest of the “best contributions” prize money would be a set-aside
for research teams working in developing countries.
Barbados & Bolivia Submission to WHO IGWG - Cancer
 Developing countries de-monopolize the sector of medicines and vaccines for
cancer, and permit free entry for generic suppliers. Domestic system of rewards
for developers of new medicines and vaccines related to cancer.
Barbados & Bolivia Submission to WHO IGWG – Chagas Disease
 Explains that few academic researches have focused on Chagas Disease, and
many academic and private sector researchers do not share relevant information,
materials, or technology. Therefore this paper suggests that the WHO should set
up a prize fund for Chagas disease.
Barbados & Bolivia Submission to WHO IGWG – Priority Medicines & Vaccines
Prize Fund: Final Product Prizes
 Final Products Prizes: Prize to promote R & D in: (1) Type II Diseases; (2) Type
III Diseases; (3) New Antibiotics; (4) Emerging Public Health Threats. FPPs are
large cash rewards for the development of new medicines or vaccines. Minimum
allocation for each category. To qualify, the product must be (1) approved for
marketing by one or more leading national regulatory drug approval agencies or
by the WHO; (2) be used by patients; and (3) have a positive impact on
healthcare outcomes. Prize awards to be divided among competitors on the basis
of relative impact of the products on health outcomes.
 Upstream prizes: Competing institutions that run upstream prizes will be
evaluated periodically to determine how successful they were in investing in
products that were successful. The upstream prize managers who invest in
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products that are successful and improve outcomes will be rewarded by earning
points that will entitle them to shares in the final product prizes. Upstream prize
managers that do poorly will face reduced allocations or termination.
Barbados & Bolivia Submission to WHO IGWG – Donor Programs
 Acknowledges that the challenge is to ensure that the humanitarian programs are
as cost-effective as possible, while preserving appropriate rewards for product
developers. Offers a solution for donor-support markets – rewards linked to
competitive supply of products for HIV-AIDS, TB, Malaria, and other
humanitarian uses.
US Proposed Legislation
M. Angeles Villarreal, Orphan Drug Act: Background and Proposed Legislation in
the 107th Congress, CRS REPORT FOR CONGRESS (2001), available at
http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/RS20971.pdf.
 The Orphan Drug Act (P.L. 97-414) was signed into law on January 4, 1983. The
Act provides incentives for pharmaceutical manufacturers to develop drugs,
biotechnology products, and medical devices for the treatment of rare diseases
and conditions (orphan products). Incentives for orphan product development
include marketing exclusivity for orphan drug sponsors, tax incentives, and
research grants.
H.R. 417, 109th Cong. (2005): ‘Medical Innovation Prize Act of 2005’
 Bill proposed to provide incentives for investment in R & D for new medicines, to
enhance access to new medicines, and for other purposes. Would provide generic
producers non-voluntary authorizations to use patents related to the manufacture
and sale of all prescription drugs in the U.S. market. Bill provides for
remuneration to developers of new medicines through a medical innovation prize
fund (MIPF) with funding of .5% of US GDP.
S. 2210, 110th Cong. (2007): ‘Medical Innovation Prize Act of 2007’
 Brief description: Purpose is to provide incentives to encourage entities to invest
in R & D of new medicines through the establishment of a Medical Innovation
Prize Fund and to enhance access to such medicines by allowing any person in
compliance with Food and Drug Administration requirements to manufacture,
distribute, or sell an approved drug.
Prizes Throughout History1
1714 - Longitude Prize
1721 - French Royal Academy Prize Questions
1
See Benjamin Krohmal, Prominent Innovation Prizes and Reward Programs, 1 KEI Research Note
(2007), available at http://www.keionline.org/index.php?option=com_content&task=view&id=29.
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1775 - Alkali Prize
1795 - Napoleon's Food Preservation Prize
1820 - Montyon Prizes
1823 - Turbine Prize
1895 - Chicago Times-Herald Prize for Motors
1900 - Deutsche Prize
1903 - Deutsch-Archdeacon Prize
1908 - Scientific American Prize
1909 - English Channel Crossing Prize
1909 - Rheims Airshow Prizes
1910 - Milan Committee Prize
1910 - Hearst Prize
1913 - Daily Mail Tans-Atlantic Prize
1919 - Orteig Prize
1931 - Soviet Committee for Invention
1946 - U.S. Patent Compensation Board
1948 - Wolfskehl Prize
1958 - NASA Space Act Awards
1959 - Feynman Prizes
1959 - Kremer Prizes
1980 - Fredkin Prize
1990 - Loebner Prizes
1991 - FCC Pioneer Preferences
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1992 - Super Efficient Refrigerator Program
1994 - Rockefeller Prize
1995 - Ansari X Prize
1996 - Forsight Institute Feynman Prizes
1997 - Budweiser Challenge
1997 - Cheap Access to Space Prize
1999 - Cooperative Computing Awards
2000 - Millennium Grand Challenge in Mathematics
2000 - Goldcorp Challenge
2001 - Innocentive
2003 - DARPA Grand Challenges
2003 - Methuselah Mouse Prize
2004 - Project Bioshield
2004 - NASA Centennial Challenges
2005 - Medical Innovation Prize Act
2005 - Grainger Challenges
2006 - Archon X Prize for Genomics
2006 - Netflix Prize
2006 - Ibrahim African Leadership Prize
2007 - Virgin Earth Challenge
2007 - Pneumococcal Vaccine Advance Market Commitment
International Treaties
Medical Research & Development Treaty (Feb. 7, 2005), available at
http://www.cptech.org/workingdrafts/rndtreaty4.pdf; Letter to World Health
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Assembly Executive Board & World Health Org. Comm’n on Intellectual Property,
Innovation & Health (Feb. 24, 2005) available at
http://www.cptech.org/workingdrafts/rndsignonletter.html.
 The proposed draft R&D treaty provides new obligations and economic incentives
to invest in priority research projects, and addresses several other important topics
such as open access publishing. It includes agreements that member countries
reduce intellectual property protection in certain areas, such as to permit research
exceptions for patents, and exceptions to patentability relating to certain open
source medical databases.
 Acceptable methods of finance include: direct public funding, tax credits or other
expenditures, philanthropic spending, research funding obligations imposed on
sellers of medicines, purchases of relevant medical products, and innovation
prizes.
 James Love, Submission of CPTech to IGWG (Nov. 15, 2006), available at
http://www.who.int/phi/public_hearings/first/15Nov06JamesLoveCPTech.pd
f.
o Explains the CIPIH’s proposal: recommends that patent owners voluntary
license inventions to generic producers, or that governments issue
compulsory licenses to facilitate generic production of medicines.
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