It’s binding---solves innovation
Kim and Schwartz 6 – Marhi Kim, Canadian lawyer, specializing in the field of Corporate/Commercial. Schwartz Professor of International Business and Trade Law, University of Manitoba Law School.
Marhi Kim and Bryan Shwartz, 2006, “Economic Prizes: A New Model for Pharmaceutical Innovations,” Asper Review of International Business and Trade Law , https://www.canlii.org/en/commentary/doc/2006CanLIIDocs543#!fragment/zoupio-_Toc2Page1-Page10/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgCYAFMAc0ICMjHvwEAGAJQAaZNlKEIARUSFcAT2gByTVIiEwuBMtUbtu-YZABlPKQBCGgEoBRADLOAagEEAcgGFnKVIwACNoUnYJCSA
Two of the strongest proponents of using rewards or market-based mechanisms are Harvard economist Michael Kremer and Rachel Glennerster, as described in Strong Medicines: Creating Incentives for Pharmaceutical Research on Neglected Diseases (2004).125 They believe that the use of pull programs will lead to a “faster, cheaper and more efficient research process that was open to new ideas.”126 In particular, they advocate the use of an “advanced purchase commitment” program as ideal to inspire the development of vaccines for diseases such as malaria, tuberculosis, and HIV/AIDS, that cripple the developing world. The commitment is a legally binding contract to pay a fixed subsidy per vaccine purchased from the developer, provided that the vaccine meets the technical requirements pre-specified by the administrative body. Technical requirements include proving clinical safety and efficacy and delivering the vaccine in market-ready form. This program would encourage innovation on commercially unviable diseases, enable access to the vaccine at a reasonable price, and avoid the waste of financing unsuccessful research endeavors.