Two-stage public-private partnership proposal for R&D on neglected diseases

We propose a 2-stage procurement model of public-private partnership to provide better incentives for R&D on neglected diseases. The model combines advance market commitment, subsidized clinical trials, and rewards based on therapeutical contributions of new drugs through a prize screening mechanism. The model is primarily intended to facilitate small firms’ R&D by providing cash flow, rewarding quality of new drugs, and sharing risks and costs of new drugs development, while limiting moral hazards. The model’s advantages include reduction of overpayments, better disclosure of information, provision of production licences, and direct targeting of better quality drugs.