Shiny prizes and cheap solutions

I’m no fan of the medical status quo, nor a fan of the current food system. I further believe it’s crazy to talk about health and food as two separate issues. So when I stumbled across the Kickstarter campaign a film called “Breadhead” I was excited to join in. They’re in their last week of fundraising and could use all the help they can get.

There will now follow a brief, underinformed rant on the cost of healthcare

If I understand correctly, one of the primary drivers of healthcare costs are medications and devices under patent.

I suspect it would be much more cost-effective to focus on boring prevention than late-stage heroics, but leaving that aside, we also pay a lot more for these drugs than it costs to manufacture them.

Part of the cost of producing a drug no doubt comes from the cost of the raw materials. Another fraction of the cost comes from the need to produce it to exacting standards.

However, if I understand correctly, the price of a drug is largely driven by the high costs of development, and is protected through the patent system.

We the people of the United States grant these companies (time-limited) monopoly status (allowing them to maintain artificially inflated prices) in order to incentivize innovation.

That is, the government’s coercive power is leveraged to extract wealth from the sick and cautious (or, more recently, everyone) to increase life-spans by incentivising that subsection of research which can lead to profitable drugs.

One more time: increasing life-spans by using coercion to make pharmaceuticals more profitable.

I’m all for savings lives, and I understand the importance of research, but it seems to me that there could be another way.

Patents, we are told, are the price we must pay for innovation. Some people would disagree with this statement entirely, arguing that innovation would not slow, even without patent protection. I have no idea if that’s true, but my thought is – if innovation is so important (and I believe it is) why not pay for it up front?

It’s all been done before

In 1714 the British parliament put up a £20,000 prize (truly a king’s ransom) to whoever could find a practical way of determining longitude at sea. At the time,  many believed that the solution to the problem would be astronomical, but the parliament did not fund an observatory, they put up the prize money and let innovators raise their own development funds. In the end the problem was solved by clockmaker John Harrison.

In 1919 New York hotel owner Raymond Orteig put up “a prize of $25,000 to the first aviator of any Allied Country crossing the Atlantic in one flight, from Paris to New York or New York to Paris”.  Together, competitors vying for the prize spent many multiples of the prize value on research and development before Charles Lindbergh won the prize in 1927.

Turns out, prize money is a fantastic way to fund innovation – and especially unconventional solutions.

Of course, this is nothing new. Ever since reading Dava Sobel’s Longitude in the 90’s, I’ve been a fan of prize-driven innovation. However, until very recently, there weren’t many competitions which took what I always thought was the next logical step. The Ansari X-prize and especially the Progressive Automotive X-prize captured my imagination, but it always seemed to me that the X-Prize Foundation was going about things in the wrong way.

If the winners in these competitions were compensated with a big cash prize, why should the technology remain patent-protected?

When I heard that the X-Prize Foundation was making a pivot towards open-source it got me really excited. And gave me a little faith that perhaps humanity isn’t doomed (at least not until the sun starts fusing helium).

But just in case they 1) lose their way again, and 2) read obscure, meandering blogs, here’s

My Grand Vision to Fund Worthwhile Health Research

Some entity, perhaps the X-Prize Foundation, perhaps a group of states (read: parasitic war-making entities who claim a monopoly on coercive force), could offer a series of tiered prizes with the eventual goal of increasing quality-adjusted life years.

The first tier would have a lower requirements, a smaller purse, and could be awarded to a much larger number of competitors. This would increase the likelihood of at least some compensation for larger R&D efforts, and perhaps could be seen as a end in its own right for smaller teams.

In order to qualify for this stage competitors would submit the data from a small controlled trial of their intervention. Interventions which looked promising would be selected for larger trials, and from among those whose results were reproducible, a certain number would be awarded prize money and be eligible for the next stage of competition – a larger trial. Of course, at each stage of competition, prize money would increase.

Each winner, at any tier, would have a choice to either accept or decline the prize money. In order to accept a payout the team would have to make their intervention open source. If the intervention happened to be a pharmaceutical (though I think this would be unlikely in the early years) and prize money was accepted, it could be manufactured by any facility around the globe, greatly lowering the cost and extending its reach.

But the real beauty of the approach would be the availability of funding for interventions which were promising but could never be harnessed for profit – perhaps a new use for household vinegar, a habit which could improve circadian rhythms in shift workers, or a cheap new test which could catch dysfunctions early.

The perverse way we fund “health care” innovation today ensures expensive new pills and hospital gizmos engineered to string along the superficially diagnosed, mostly dead, or chronically flaccid, but allots far too few resources for the maintenance of robust health.

I want to see that change.

For years, ever since I first read Longitude, I kept these ideas to myself, fostering the delusional hope that one day I might be the visionary who ushered in a new era of open innovation.

But these ideas are far too important to be held hostage in my daydreams. To the enlightened web mogul or government official who somehow stumbles across this post: you’re welcome.

Now get to work.

Leave a Reply