Aidan Hollis

Microcredit: What Can We Learn from the Past?

We compare six microcredit organizations of nineteenth-century Europe (credit cooperatives and loan funds) to identify what characteristics were related with successful attainment of the organizations goals. We find that organizations that depended on charity or government for their funding tended not to be sustainable. In contrast, those organizations which relied on depositors for their funding operated at a larger scale and lasted much longer. An examination of the characteristics of these historical institutions is useful because some of them operated over many decades, providing a perspective which is rarely seen in modern, short-lived microcredit banks and programs.

Co-Authorship and the Output of Academic Economists

This paper uses panel data on 339 economists to evaluate the relationship between co-authorship and output. It is shown that for a given individual, more co-authorship is associated with higher quality, greater length, and greater frequency of publications. However, the net relationship between co-authorship and output attributable to the individual is negative after discounting for the number of authors. The results of this paper suggest that universities and granting agencies which preferentially reward research collaboration may be undermining their goal of maximizing research output.

The Economics of Follow-on Drug Research and Development Trends in Entry Rates and the Timing of Development

Objectives: The development of so-called ‘me-too’, or ‘follow-on’, drugs by the pharmaceutical industry has been viewed by some as duplicative and wasteful, while others have argued that these drugs often provide needed therapeutic options and inject some price competition into the marketplace. This study examines data on the trends in the speed with which competitive entry has occurred in the pharmaceutical marketplace and the competitive nature of the industry’s development of these drugs. Data and methods: We examined data on the entry rates of drugs in a large number of therapeutic classes over time, as well as detailed survey information on the relative timing of the development of drugs in the classes. Classes were defined according to chemical structure or pharmacologic mode of action and similarity of clinical use. We determined average times to initial and subsequent entry in drug classes by period and examined the timing of development milestones achieved by what have turned out to be follow-on drugs in relation to the development and approval of the first drug in a class to be approved. Results: We found that the period of marketing exclusivity that the breakthrough drug in a new class enjoys has fallen dramatically over time (a median of 10.2 years in the 1970s to 1.2 years for the late 1990s). Approximately one-third of follow-on new drugs received a priority rating from the US FDA. The vast majority of the follow-on drugs for drug classes that were created in the last decade were in clinical development prior to the approval of the class breakthrough drug. Conclusions: The data suggest that entry barriers have fallen over time for new drug

Preserving Antibiotics, Rationally

With 51 tons of antibiotics consumed daily in the United States, the selective pressure in favor of antibiotic-resistant pathogens is strong. Given the critical public health threat, an economically rational solution is to impose a user fee on nonhuman antibiotic use.

The Health Impact Fund: incentives for improving access to medicines

and development. However, present market forces and intellectual property rights provide little incentive for innovation in the diseases of low-income countries, such as diarrhoeal disease, lower respiratory tract infections, perinatal infections, Burkitt’s lymphoma, and other cancers prevalent in poor countries. Sir Andrew Witty, the global chief executive offi cer of GlaxoSmithKline (GSK), pledged 5 in February, 2009, to reduce prices of GSK’s patented drugs in developing countries, invest in local healthcare infrastructure, and form a patent pool to allow sharing of GSK-owned intellectual property. Critics have questioned whether such philanthropic measures are sustainable at a time when new drug development is slowing, 6 especially in the global economic downturn. 7 We propose the creation of the Health Impact Fund (HIF) as an enduring reform that would give pharmaceutical innovators stable fi nancial incentives to develop new medicines that have large eff ects on global health, and to sell them worldwide at no more than the lowest feasible cost of production and distribution. Spending on pharmaceuticals represents 66% of health expenditure in developing countries—often leading to household impoverishment during serious illness. 8,9

A contractual approach to the gray market

Parallel imports are genuine products imported without the authorization of the trademark or copyright owner in a country. Authorized dealers have employed trademark and copyright law to exclude parallel imports using claims of infringement. Our assertion is that trademark and copyright laws are inappropriate for enforcing restrictions against parallel imports for two reasons. First, trademark exclusion of parallel imports indiscriminately eliminates intrabrand competition and should be scrutinized from an antitrust perspective. Second, trademark laws inefficiently constrain the feasible set of distribution systems. We propose a policy combining contract, tort, and antitrust law to regulate parallel imports.

The life-cycle of a microfinance institution: the Irish loan funds

Abstract Ireland’s loan funds were a long-lived, self-sustaining, large-scale microfinance organization that made millions of loans, without collateral, to the poor. During the first 100 years of their life-cycle, a period of growth ending in the 1840s, they adapted constantly and obtained improvements to their legal structure because they were complementary to the banking system and seen as effective in relieving poverty. In their 2nd century, they became ossified, in part because of competition with commercial banks. The loan funds provide an example of sustainable microfinance under harsh economic conditions and illustrate how organizations change incrementally and, when successful, alter their institutional framework.

New approaches to rewarding pharmaceutical innovation

Many observers take it as self-evident that patents are necessary for pharmaceutical drug innovation. Modern research, however, has raised questions about the effectiveness of patents in spurring innovative activity in general, and drug innovation in particular.[1][1]–[3][2] Mechanisms that may be

Funding innovation for treatment for rare diseases: adopting a cost-based yardstick approach.

BackgroundManufacturers justify the high prices for orphan drugs on the basis that the associated R&D costs must be spread over few patients. The proliferation of these drugs in the last three decades, combined with high prices commonly in excess of

Antibiotic Resistance Is a Tragedy of the Commons That Necessitates Global Cooperation.

100,000 per patient per year are placing a substantial strain on the budgets of drug plans in many countries. Do insurers spend a growing portion of their budgets on small patient populations, or leave vulnerable patients without coverage for valuable treatments? We suggest that a third option is present in the form of a cost-based regulatory mechanism.MethodsThis article explores the use of a cost-based price control mechanism for orphan drugs, adapted from the standard models applied in utilities regulation.Results and conclusionsA rate-of-return style model, employing yardsticked cost allocations and a modified two-stage rate of return calculation could be effective in setting a new standard for orphan drugs pricing. This type of cost-based pricing would limit the costs faced by insurers while continuing to provide an efficient incentive for new drug development.