Policy Tools for Stimulating Innovation and Access to Technologies for Developing Countries
Ann MotlAugust 1, 2012
Need for innovation incentives and cost reducing measures
Developing country specific problems+
Poverty conditions+
Lack of innovation=
10/90 gap “Only 10 percent of global health R&D is
devoted to diseases that affect 90 percent of the world’s population”
Agenda Innovation mechanismsCurrent policyAlternative innovation incentives
Patents Innovation inducement prizes Advanced market commitments (AMCs)
Alternative cost lowering mechanisms Differential pricing Humanitarian licensing
Recommendations
Innovation
http://ve-forum.org/apps/pub.asp?Q=3422&T=Living%20Lab%20Handbook
Push PullFederal Grants PatentsTax Credits PrizesGovernment Agency Contracts
Advanced Market Commitments
Priority Agency Review
General PolicyTraditional US policy - mix of push and pull mechanismsoGrantsoContractsoPatentsoHuman or physical infrastructure investments
Scope:Analyze pull, not push, mechanismsFocus only on US policy solutionsProvide a survey of select pull mechanisms and cost lowering mechanisms
Alternatives
Prizes AMCs
Patents
Humanitarian
Licensing
Tiered Pricing
Incentives for InnovationCost Reducing Measures
PatentsAgreement with government- 20 year exclusionary period for providing best mode knowledgeIncentive-exclusionary time period allows inventors to recoup research costs and invest in future R&D Patents are valuable only if they can be enforced, difficult internationallyMarket exclusivity on a product of low return is not very attractive because still no large market
PrizesLong historyInducement prizes - “designed to encourage scientists and engineers to pursue scientific and technical societal goals not yet reached” Renewed interest - America COMPETES Reauthorization Act of 2010
Prize Benefits
Success-contingent rewards
Address neglected markets
Reach a wider
community of problem solvers
Identify new or
unorthodox ideas
Focus attention of
policymakers and public
Prizes ConsSecrecy and less collaboration due to competition
Open Source DividendChallenging to design and financeChallenging for sequential inventions
Multi-step prizesLow or too high reward (Soviet Union)
Advanced Market Commitments (AMCs)
Purchasers (government or private foundations) commit to purchasing a specific quantity of a product when it is developedAMC funders can then make the product available to developing countries at no or low cost
Advanced Market CommitmentsProsFunds only pay for desired outcomePossible lower costs for end usersPublic-private partnership opportunity
ConsInappropriate reward amountsSkepticism of reward appropriation
Legally binding contractsDifficulty for sequential inventors
Tiered (Differential) Pricing
Companies charge low prices in low income markets and high prices in high income markets
Aravind Eye Care System
http://www.npr.org/2011/11/29/142526263/india-eye-care-center-finds-middle-way-to-capitalism
http://in2eastafrica.net/uganda-arvs-shortage-soars-as-sh43-9b-lies-idle/
ARVs
Tiered (Differential) Pricing
ProsIncrease access to essential technologies through financially affordable measuresAdd to companies’ revenue as they are reaching new customers
ConsParallel importing possibilitiesDeveloped country consumer discontentIncome varies widely in any country
Intra-country differential pricing
Humanitarian Licensing
A humanitarian license reservation is a provision in a license where inventors protect in advance the possibility of sharing their proprietary technology with third parties for the benefit of people in needS.4040, Public Research in the Public Interest Act - mandatory humanitarian licensing Humanitarian use exemption (HUE) - “would provide an exemption for use of a particular IP product in developing countries while protecting that IP in wealthier countries”
Recommendations1. Expand use of prizes in a variety of technological
industries, especially focused on developing country specific technologies.
“We still have much to learn about the strengths and limitations of prizes, but the time to start additional experiments is now.”
Encourage agencies to create prize competitions and provide them with resources.
Promote public-private partnership prize competitions to increase resources and knowledge.
Recommendations1.Enter into at least one advanced market
commitment.AgResults Initiative from G20 Summit
http://www.ilri.org/ilrinews/index.php/archives/4142
Recommendations2. Differential pricing should be
encouraged and expanded to increase access to essential technologies for those in developing countries.a. Maintain and if necessary and add
additional safeguards to prevent parallel importing
b. Be fully transparent
Recommendations3. Federally mandated humanitarian
use exemptions should not be required for technologies, federally funded or otherwise.a. Voluntary humanitarian licensing should
be encouragedb. AUTM’s (Association of University
Technology Managers) “9 Points to Consider in Licensing University Technology”
Questions?Thank you-
Melissa Carl Bill Behn Noha El‐Ghobasy Paul Fakes ASME DC WISE coordinators Interviewees
For inquiries, please contact Ann Motl at [email protected]
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