By Jason Derry --
The Milken Institute,
an independent think tank, has released a report that proposes a strategy that
may stimulate increased funding efforts for
early-stage biotech research. The
strategy essentially involves public-private partnerships.
The need to stimulate funding efforts for biomedical
research stems from decreased or stagnant public funding, and from the tendency
for companies to focus on potential big money discoveries. For example, the Institute reports that
investment in health care tends to be devoted to discovering and developing
drugs that relate to "lifestyle" and "Western" diseases,
because such drugs are the most profitable. The consequence of this practice translates into a lack of proper
funding for research relating to many deadly diseases, especially those that
heavily affect third world countries. In
addition, up to 70% of marketed drugs do not generate enough money to cover
their R&D costs. Therefore, there is
little financial incentive to fund research with a low likelihood of producing
a high profit. To address these
problems, the report makes six recommendations, including:
1. Reduce risk by pooling intellectual property;
2. Use foundation funds to enhance credit quality and
attract potential investors;
3. Use liability insurance to enhance credit quality;
4. Tap into the emerging market for IP-backed securities;
5. Use advanced purchases to underwrite medical research
and drug delivery; and
6. Use donor bonds to underwrite medical research and
drug delivery to under-funded patient groups.
Each of these recommendations is discussed in more detail in Drug Discovery & Development.
Jason Derry, Ph.D., who graduated with honors from DePaul University College of Law, is a molecular biologist and founding author of Patent Docs.
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