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> governments signing contracts that guarantee they'll pay $X hundred million for a solution BEFORE the research has been done Did you say "hundred million" in
by bdzr 2y ago
> governments signing contracts that guarantee they'll pay $X hundred million for a solution BEFORE the research has been done
Did you say "hundred million" intentionally? Because the average cost of a drug has been estimated in the billions for over a decade now. [1] I'll take a listen to the podcast, I'm generally skeptical of the government deciding funding levels since they're likely to be worse at assessing demand than consumers.
[1] https://www.appliedclinicaltrialsonline.com/view/tufts-center-study-drug-development-cost-developing-new-drugs https://www.appliedclinicaltrialsonline.com/view/tufts-cente...
- ikesau 2y agoGreat, thanks. I'm sure you'll find it thought provoking. re: hundred million: I was trying to imply that AMCs can be large but not necessarily always in the billions - it depends on the market size and estimated economic damage of the thing we're trying to incentivize R&D for - though yes, both medical AMCs to date (pneumococcal and covax) were in the billions. Just to clarify, AMCs aren't the same thing as governments "fixing" the price of R&D with wishful thinking. It's when a government/funder uses epidemiology and economics to calculate the cost of leaving a disease untreated, and agreeing in advance to pay that much for it. That way, if set correctly, companies will invest to develop a solution without fear of being punished by the moral/political forces that make them suppress their prices once the solution is developed. It's a way to fix the incentives that have left us with a whole class of neglected tropical diseases (firms needing to recoup investments, governments needing to negotiate cheapest possible prices)