Reply to Lance Armsrong op-ed: When markets fail, it’s time to re-think innovation

May 13, 2008

Lance Armstrong (yes, that Lance Armstrong) has an op-ed in the Wall Street Journal this morning in which he argues that America needs more action from legislators, voters, and pharmaceutical firms if it wants to win “the war against cancer.”

I won’t go into details about why (as someone with a chronic illness) I always resent the militaristic talk about fighting, battling, and generally making-war-on our diseases, but I will take a moment to offer a quick rejoinder to Mr. Armstrong’s arguments about how to improve our existing medical industry and institutions.

In advocating for increased research funding, Lance says:

But increased funding is only part of the solution. Government must streamline the laborious process of getting breakthroughs from lab to clinic. We can cut out red tape of questionable necessity that discourages innovation in the private sector.

Meanwhile, the private sector must work to ensure that Americans fighting cancer have access to new treatments and therapies. Our regulatory system should not hinder the fight against cancer, and our profit-based health-care providers should do more to address the fact that too few people can afford the treatments they deserve.

In as far as it goes, I appreciate this last bit about recognizing the problem of affordable care. In contrast, I think the first paragraph should be amended entirely.

Government should not merely streamline existing innovation laws to make it easier for the private sector to wrap up their “inventions” in monopolistic legal protections. A philanthropy-based response (where we depend on pharma firms to willingly surrender potential profits in order to treat more people) will not provide a sustainable solution to existing healthcare inequalities. The issue becomes even more intractable once you step back and consider the global crisis in accessible medicines that the existing patent-based system has spawned.

Instead, the U.S. congress should take the current failures of the pharmaceutical industry as a signal that it’s time to re-think the way we regulate knowledge-based goods (like medicines, software, and cultural products) more generally. When markets fail, governments need to intervene to re-structure the existing legal and institutional incentive system at the foundation of that market. Currently, the legal and institutional system of medical patents and proprietary knowledge has become an impediment to the world’s ability to treat illness in a timely and effective manner. We must address this problem with swift and decisive action.

I grant that the old system of proprietary knowledge has gotten the world quite far in its efforts to reduce the incidence of many diseases. It has also produced remarkable and historic medical innovations. Nevertheless, rather than cling to the old system because it has worked pretty well up to now, political leaders must recognize that the next big step in knowledge governance and medical innovation will not happen within the existing industry structure. The pharmaceutical firms may not like it, but their interests must be reconciled with those of the rest of society.

Congressional leaders, researchers, and corporate strategists must look to alternatives like research prizes, open innovation networks, and expanded public cost-sharing programs (among others) to bring us new “victories” in our so-called “wars” against disease. A renovated system of medical knowledge production, if thoughtfully researched and well-implemented, could truly work wonders.

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